Apple to create $1B 'advanced manufacturing fund' in US

Posted:
in General Discussion edited May 2017
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.
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Comments

  • Reply 1 of 22
    SpamSandwichSpamSandwich Posts: 33,407member
    And just wait until the "repatriation" thing happens. Hundreds of billions in overseas money will flow back into the US (not just Apple, mind you).
    edited May 2017
  • Reply 2 of 22
    gatorguygatorguy Posts: 24,087member
    And just wait until the "repatriation" thing happens. Hundreds of billions in overseas money will flow back into the US (not just Apple, mind you).
    And be distributed to shareholders and company execs and other 1%'ers. The rich will simply become richer. IMO It will not be used to invest in plant, equipment and job-creation opportunities, and will not benefit the average American. 
    edited May 2017 jax44tokyojimumdriftmeyerfrankie
  • Reply 3 of 22
    1st1st Posts: 443member
    just in time before all the gurus (the chaps went to china teach them know hows under the "gun") hang up their hats.  Better be quick... 
  • Reply 4 of 22
    melgrossmelgross Posts: 33,508member
    gatorguy said:
    And just wait until the "repatriation" thing happens. Hundreds of billions in overseas money will flow back into the US (not just Apple, mind you).
    And be distributed to shareholders and company execs and other 1%'ers. The rich will simply become richer. IMO It will not be used to invest in plant, equipment and job-creation opportunities, and will not benefit the average American. 
    Well,  it's some of this, and some of that. First of all, it isn't the government's business to tell companies how to spend their profits. It's up to management, and yes, investors.

    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.
    edited May 2017 loquiturmacseekeranantksundarammwhitetokyojimuRayz2016randominternetperson
  • Reply 5 of 22
    stukestuke Posts: 122member
    And this is what I see as a great CEO move!
    Soliwatto_cobra
  • Reply 6 of 22
    gatorguygatorguy Posts: 24,087member
    melgross said:
    gatorguy said:
    And just wait until the "repatriation" thing happens. Hundreds of billions in overseas money will flow back into the US (not just Apple, mind you).
    And be distributed to shareholders and company execs and other 1%'ers. The rich will simply become richer. IMO It will not be used to invest in plant, equipment and job-creation opportunities, and will not benefit the average American. 
    Well,  it's some of this, and some of that. First of all, it isn't the government's business to tell companies how to spend their profits. It's up to management, and yes, investors. 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.
    AFAIK Apple doesn't get a single cent from your purchase of their stock. It's simply moving existing stock around rather than Apple raising money thru stock issuance. That ship sailed long ago. Not posting that for your benefit of course, just noting it for those who may not think about it.
    Solimdriftmeyerjony0
  • Reply 7 of 22
    tmaytmay Posts: 6,238member
    gatorguy said:
    And just wait until the "repatriation" thing happens. Hundreds of billions in overseas money will flow back into the US (not just Apple, mind you).
    And be distributed to shareholders and company execs and other 1%'ers. The rich will simply become richer. IMO It will not be used to invest in plant, equipment and job-creation opportunities, and will not benefit the average American. 
    First off, Apple isn't going to repatriate all of the funds; they are, in fact, a global company. More to the point, do you really want a hyper competitive, hyper efficient, producer loosed on the now laissez-faire American market with even $100 B in cash? Just the chance of a major disruption in a market that Apple is not yet involved in would be a blow to the existing industries. That likely applies to more than a few other tech companies.
    It would be like clubbing baby seals.

    edited May 2017
  • Reply 8 of 22
    ArgustArgust Posts: 3member
    Hmm.... Something doesn't seem to add up. The article states: "In the last quarter, Apple spent $50 billion on manufacturing in the U.S." Is this a typo? Sincet in the last quarter Apple only had $52.9 Billion of total revenue. To spend $50 billion in the US alone would be quite a feat.
  • Reply 9 of 22
    anantksundaramanantksundaram Posts: 20,397member
    gatorguy said:
    And just wait until the "repatriation" thing happens. Hundreds of billions in overseas money will flow back into the US (not just Apple, mind you).
    And be distributed to shareholders and company execs and other 1%'ers. The rich will simply become richer. IMO It will not be used to invest in plant, equipment and job-creation opportunities, and will not benefit the average American. 
    Class aspersions aside, that is still better than leaving it abroad, having it sit there and doing nothing, no?
    edited May 2017
  • Reply 10 of 22
    leavingthebiggleavingthebigg Posts: 1,291member
    When Apple is allowed to bring its money to the USA, look for the greedy analysts to salivate about Apple giving money to shareholders. If Apple doesn't give any money or doesn't give what analysts consider enough money, there will be lawsuits pursued to force Apple to give away the money. This has happened before.
  • Reply 11 of 22
    anantksundaramanantksundaram Posts: 20,397member
    gatorguy said:
    melgross said:
    gatorguy said:
    And just wait until the "repatriation" thing happens. Hundreds of billions in overseas money will flow back into the US (not just Apple, mind you).
    And be distributed to shareholders and company execs and other 1%'ers. The rich will simply become richer. IMO It will not be used to invest in plant, equipment and job-creation opportunities, and will not benefit the average American. 
    Well,  it's some of this, and some of that. First of all, it isn't the government's business to tell companies how to spend their profits. It's up to management, and yes, investors. 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.
    AFAIK Apple doesn't get a single cent from your purchase of their stock. It's simply moving existing stock around rather than Apple raising money thru stock issuance. That ship sailed long ago. Not posting that for your benefit of course, just noting it for those who may not think about it.
    What does Apple not getting a single cent from my purchase of their stock have to do with anything? I think you really should go back to the basics and understand the value and importance of high -- but not too high -- stock prices for a company. 
    edited May 2017
  • Reply 12 of 22
    anantksundaramanantksundaram Posts: 20,397member
    When Apple is allowed to bring its money to the USA, look for the greedy analysts to salivate about Apple giving money to shareholders. If Apple doesn't give any money or doesn't give what analysts consider enough money, there will be lawsuits pursued to force Apple to give away the money. This has happened before.
    This is nonsense. Name one instance where a lawsuit has forced a company to do this. 
    randominternetperson
  • Reply 13 of 22
    dewmedewme Posts: 5,259member
    This is good PR for Apple, I guess, but it's really hard to follow how Apple intends to put this "investment" to good use outside of garnering favorable tweetage from the White House. It's not like any major American industries or companies are being held back or hampered in any way by a lack of advanced manufacturing capabilities, technologies, processes, or line workers. Automation of US manufacturing has raised productivity to all time highs, albeit with lower numerical demands for workers, especially for lower skill, repetitive, and physically stressful positions. Oh, and location dependencies aren't as much of a factor anymore. Design anywhere, build anywhere, sell everywhere. Companies like GM have already invested multiple billions in advanced manufacturing for decades, case in point the NUMMI plant in Tim's backyard. But then they abandoned the NUMMI plant and Tesla picked it up for pennies on the dollar. Why? It wasn't that GM couldn't figure out the technology or advanced production processes. No, they hit a major financial crunch and dumped the capabilities the plant offered for short term financial relief. Why didn't the lessons learned at NUMMI proliferate throughout the entire GM manufacturing infrastructure? 

    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.
  • Reply 14 of 22
    SoliSoli Posts: 10,035member
    gatorguy said:
    And just wait until the "repatriation" thing happens. Hundreds of billions in overseas money will flow back into the US (not just Apple, mind you).
    And be distributed to shareholders and company execs and other 1%'ers. The rich will simply become richer. IMO It will not be used to invest in plant, equipment and job-creation opportunities, and will not benefit the average American. 
    Class aspersions aside, that is still better than leaving it abroad, having it sit there and doing nothing, no?
    I'm all for a repatriation, but I can't square your comment about Apple earning money in another country equating to "having it sit there and doing nothing." If having a surplus of cash is bad then by your statement a repatriation would be an awful move for Apple considering how much they current hold in the US alone. And it's not like those earnings don't get used for innumerable expenditures in those countries.

    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.
    edited May 2017 gatorguyfrankie
  • Reply 15 of 22
    wizard69wizard69 Posts: 13,377member
    gatorguy said:
    And just wait until the "repatriation" thing happens. Hundreds of billions in overseas money will flow back into the US (not just Apple, mind you).
    And be distributed to shareholders and company execs and other 1%'ers. The rich will simply become richer. IMO It will not be used to invest in plant, equipment and job-creation opportunities, and will not benefit the average American. 
    This actually happened the last time congress offered companies a "tax holiday".   Not for every company mind you but many did just this.   It certainly was good for shareholders.   Distribution to share holders doesn't really bother me much as share holders make up a good portion of America.   In the end though the last go around had a lot of money coming back into the USA and not doing much at all.
  • Reply 16 of 22
    Argust said:
    Hmm.... Something doesn't seem to add up. The article states: "In the last quarter, Apple spent $50 billion on manufacturing in the U.S." Is this a typo? Sincet in the last quarter Apple only had $52.9 Billion of total revenue. To spend $50 billion in the US alone would be quite a feat.
    I was about to write the same thing. I can't be bothered looking at their financial statements but that number seems too big. Either it's a typo or they are including some strange things in "manufacturing"
  • Reply 17 of 22
    SoliSoli Posts: 10,035member
    Argust said:
    Hmm.... Something doesn't seem to add up. The article states: "In the last quarter, Apple spent $50 billion on manufacturing in the U.S." Is this a typo? Sincet in the last quarter Apple only had $52.9 Billion of total revenue. To spend $50 billion in the US alone would be quite a feat.
    I was about to write the same thing. I can't be bothered looking at their financial statements but that number seems too big. Either it's a typo or they are including some strange things in "manufacturing"
    It has to be wrong because that would mean Apple operated at a major loss for the quarter, but they did $11 billion in profit.
  • Reply 18 of 22
    anantksundaramanantksundaram Posts: 20,397member
    Soli said:
    gatorguy said:
    And just wait until the "repatriation" thing happens. Hundreds of billions in overseas money will flow back into the US (not just Apple, mind you).
    And be distributed to shareholders and company execs and other 1%'ers. The rich will simply become richer. IMO It will not be used to invest in plant, equipment and job-creation opportunities, and will not benefit the average American. 
    Class aspersions aside, that is still better than leaving it abroad, having it sit there and doing nothing, no?
    I'm all for a repatriation, but I can't square your comment about Apple earning money in another country equating to "having it sit there and doing nothing." If having a surplus of cash is bad then by your statement a repatriation would be an awful move for Apple considering how much they current hold in the US alone. And it's not like those earnings don't get used for innumerable expenditures in those countries.

    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.
    I don't follow your comment, and I really don't know what you mean by 'excessive' cash. I am talking about the surplus cash. Obviously Apple would be silly to bring it all back, and it won't, so the issue of resources needed for funding local operations is moot. 
    edited May 2017
  • Reply 19 of 22
    techprod1gytechprod1gy Posts: 838member
    This is where Apple really shines under Tim Cook. This will create much needed activity to drive a solution to building some manufacturing capacity (advanced manufacturing) in the US. I still think Apple is off on some of the product advancements and how they cycle certain products but the push for renewables, human rights and efforts like this just make me a happy camper.
    palomine
  • Reply 20 of 22
    jkichlinejkichline Posts: 1,369member
    gatorguy said:
    And just wait until the "repatriation" thing happens. Hundreds of billions in overseas money will flow back into the US (not just Apple, mind you).
    And be distributed to shareholders and company execs and other 1%'ers. The rich will simply become richer. IMO It will not be used to invest in plant, equipment and job-creation opportunities, and will not benefit the average American. 
    It depends on how the U.S. government handles this.  They could offer a repatriation of money with lower tax or zero tax IF those monies are used specifically to fund manufacturing and jobs creation.  Dunno... seems like a recent thing to do.
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