Apple to create $1B 'advanced manufacturing fund' in US
Apple CEO Tim Cook on Wednesday said the company has created a $1 billion manufacturing fund that will help stimulate job growth in the United States.
Cook announced the "advanced manufacturing fund" during an interview with CNBC's Jim Cramer, saying capital backing the initiative will come from the company's U.S. investment pool. In the last quarter, Apple spent $50 billion on manufacturing in the U.S.
"We're really proud to do it," Cook said. "By doing that we can be the ripple in the pond, because if we can create many manufacturing jobs, those manufacturing jobs create more jobs around them."
The move comes amidst political pressure to repatriate jobs lost to overseas firms, especially those outsourced to China. Of note, President Donald Trump's administration has made job creation a major platform goal, often calling on tech firms -- specifically Apple -- to produce their devices in the U.S. rather than farm out production to cheaper labor markets.
Cook failed to provide details about the fund, saying only that the billion dollars will come from the company's U.S. outlay. He went on to remind Cramer that Apple has to borrow money to fund domestic operations, as most the company's $256 billion cash hoard lies overseas.
The fund goes beyond Apple's $1 billion investment in SoftBank's Vision Fund, a $100 billion resource created to accelerate the development of technology around the world. Some $50 billion of the Vision Fund will be directed toward U.S. endeavors.
Apple is expected to announce its fund's first investment in May.
During today's interview, Cook outlined Apple's impact on U.S. job creation. So far, the company has created some two million jobs in America, 1.5 million of which are attributable to the App Store. The company also has 25,000 employees working on research and development in California, as well as 5,000 people in Austin, Tex., working in R&D and other sectors. Cook also counts retail workers and employees at production partners like Corning and 3M in the two million job figure.
Cook announced the "advanced manufacturing fund" during an interview with CNBC's Jim Cramer, saying capital backing the initiative will come from the company's U.S. investment pool. In the last quarter, Apple spent $50 billion on manufacturing in the U.S.
"We're really proud to do it," Cook said. "By doing that we can be the ripple in the pond, because if we can create many manufacturing jobs, those manufacturing jobs create more jobs around them."
The move comes amidst political pressure to repatriate jobs lost to overseas firms, especially those outsourced to China. Of note, President Donald Trump's administration has made job creation a major platform goal, often calling on tech firms -- specifically Apple -- to produce their devices in the U.S. rather than farm out production to cheaper labor markets.
Cook failed to provide details about the fund, saying only that the billion dollars will come from the company's U.S. outlay. He went on to remind Cramer that Apple has to borrow money to fund domestic operations, as most the company's $256 billion cash hoard lies overseas.
The fund goes beyond Apple's $1 billion investment in SoftBank's Vision Fund, a $100 billion resource created to accelerate the development of technology around the world. Some $50 billion of the Vision Fund will be directed toward U.S. endeavors.
Apple is expected to announce its fund's first investment in May.
During today's interview, Cook outlined Apple's impact on U.S. job creation. So far, the company has created some two million jobs in America, 1.5 million of which are attributable to the App Store. The company also has 25,000 employees working on research and development in California, as well as 5,000 people in Austin, Tex., working in R&D and other sectors. Cook also counts retail workers and employees at production partners like Corning and 3M in the two million job figure.
Comments
what people,who don't really understand economics think, is that dividends aren't useful to the economy. That's wrong. Many people hold a stock, not just the rich. All of those people benefit. I'd bet that most of Apple's stock will go to people who own funds with Apple, and small investors. Even hedge funds pay out from dividends.
while I'm not in favor of stock buybacks, I'm sure some of that will happen as well. And that's the company's business.
its a mistake to think that a company's primary purpose it to benefit others. The business of a company is to make a profit for their shareholders. And these shareholders invest in the company, which gives it the money to do what it needs to, for a number of reasons. Don't like that, then don't invest!
but there is only so much money that a company can use. Cook mentions that Apple produces more cash than they need to run the company. The general effect is to give a lot of that money back to investors. That's actually a good thing.
but, of course, if a company has a good amount of money, and is in an industry where a large amount of R&D is done, and a large amount of manufacturing is done, then it will spend at least, some of this money towards that. As Cook reiterated in his interview with Cramer tonight, Apple spent $50 billion for parts and materials here in the USA last year for USA sourced components. Anyone who doesn't think that's a lot should go back under the rock they live under.
they also have been trying to manufacturer Mac Pro models here for years, 2013, to be exact, long before Trump came on the scene. I've no doubt they would be happy to do more, if conditions are right, and perhaps, with all his faults, and that's most of his thinking and policies, Trump may get this one thing right.
and just remember that we're just about the only country that taxes profits made out of the country when a company wants to bring them back. That just hurts us.
It would be like clubbing baby seals.
So does the Apple money go towards advancing technological challenges to advanced manufacturing, which don't exist, or something else? It's never been a manufacturing problem. Not a technology problem. Not an investment dollars problem. Not an automation problem. It's somewhat of an an educational and vocational problem, but that's only part of it. But more than anything it's a capitalism problem and global socio-political climate problem.
Apple and Tim Cook probably understand the realities of the problem more clearly than anyone. Their ability to lead by example and execute on an optimistic strategy is far more valuable than any 1B cash grant. Looking forward to hearing what Apple actually does with this, what message it conveys, and to see whether it will have any real substance or is simply defensive chaff to decoy incoming fire. At least Tim made it clear that 1B is a drop in the bucket towards figuring this thing out. The challenge of achieving full employment in the face of technological and societal change is a hard problem that's existed since the Roman Empire, at least, so the odds are not stacked in our favor.
China, for example, buys countless components, machinery, manufacturing, and assembly in that country. Then they have 40 stores right now, many which are stunning, and more on the way. Then you have advertising and other areas of cost. You then need to consider making sure all other expenses and potential lulls in sale cycles can be covered over the long-term which means having cash and other holdings "sit there and doing nothing" is as incorrect as saying that you and I shouldn't having a savings account.
The reason I want a one-time repatriation to be allowed is so that excessive holdings can be brought back to the US to 1) benefit myself as a shareholder of many global companies, and 2) help stimulate more growth in the US (but only if that money is needed in the US). It's hard to find an argument for the latter with Apple. The only one that seems to come to mind is Apple buying an excessively expensive American company with only cash, but there's very few viable opportunities that I've ever seen mentioned.
If people really wanted corporations to stimulate the economy more they would push for much higher corporate taxes so that companies would want to invest more into their infrastructure and personal to reduce the tax burden over hoarding it.