Apple assembly partner Foxconn plans US expansion

AppleInsider · December 7, 2016 2:02PM

Apple's primary assembly partner, Foxconn, will soon invest in expanding its U.S. operations, the latter company said on Wednesday, apparently following in the steps of a similar SoftBank announcement.

"While the scope of the potential investment has not been determined, we will announce the details of any plans following the completion of direct discussions between our leadership and the relevant U.S. officials," Foxconn explained in a statement to Bloomberg. "Those plans would be made based on mutually-agreed terms."

Although Foxconn didn't provide specifics, a document held up by SoftBank CEO Masayoshi Son after meeting with U.S. President-Elect Donald Trump allegedly included the words "Foxconn," "$7 billion," and "50,000 new jobs." SoftBank is investing $50 billion in the U.S. and aiming to create 50,000 jobs.

It's unclear if Trump was involved in negotiating a Foxconn deal, but during his presidential campaign he openly criticized Apple and claimed he would make the company move production back to the U.S. Foxconn is based out of Taiwan and runs most of its factories in China. Only one Apple product -- the Mac Pro -- is assembled in the U.S., and that computer has gone three years without an upgrade.

Establishing serious production in the U.S. would be a difficult prospect for Foxconn. Aside from the fact that most parts suppliers are overseas, complicating logistics, operating in the U.S. is substantially more expensive because of higher safety, labor, and environmental standards. The decline of American manufacturing would also mean having to train many workers. The company could potentially get around some of these problems if it leans heavily on robots.

irevolt · December 7, 2016 2:23PM

In Apple’s seeking for ways for employment equality (US workers to match China), tax breaks, repatriating off-shore banked monies, they have convinced Foxconn to invest 7 billion dollars in the US for building manufacturing facilities. I’ll bet that the Trump family will be the land developers in this deal and they will build living quarters for Americans that mirrors the Foxconn buildings in China complete with nets to catch the workers driven to suicide by working conditions.

daveinpublic · December 7, 2016 2:45PM

irevolt said:

In Apple’s seeking for ways for employment equality (US workers to match China), tax breaks, repatriating off-shore banked monies, they have convinced Foxconn to invest 7 billion dollars in the US for building manufacturing facilities. I’ll bet that the Trump family will be the land developers in this deal and they will build living quarters for Americans that mirrors the Foxconn buildings in China complete with nets to catch the workers driven to suicide by working conditions.

But in actuality, not a bad thing for many American families.

blastdoor · December 7, 2016 2:55PM

It looks like we are heading towards a new mercantilism. In 5 years will Apple be making iPhones in Brazil, India, China, the US, Russia, and France?

This is definitely going to be less efficient, meaning the losers are going to lose more than the winners gain. But I guess it could increase total well-being if the losers are rich guys and the winners are poor guys. Somehow that's never how it works out, though.... somehow, rich guys win no matter what.

My guess is that we will just see the big companies divide the world up into little monopolistic fiefdoms. Their costs might go up, but their price-gouging power will go up even more.

scogre · December 7, 2016 3:07PM

I agree that this might change the way companies operate in the world, but I would love a chance to purchase a US "Patriot" edition of the iPhone. I would even pay more to support an American assembled iPhone.

Apple has been trying to come back to the IS with manufacturing anyway. I think it is a good idea that we support having our stuff built in countries where the laws are setup to protect people and workers. Just because something is cheaper, doesn't make it better.

schlack · December 7, 2016 3:26PM

daveinpublic said:

irevolt said:

In Apple’s seeking for ways for employment equality (US workers to match China), tax breaks, repatriating off-shore banked monies, they have convinced Foxconn to invest 7 billion dollars in the US for building manufacturing facilities. I’ll bet that the Trump family will be the land developers in this deal and they will build living quarters for Americans that mirrors the Foxconn buildings in China complete with nets to catch the workers driven to suicide by working conditions.

But in actuality, not a bad thing for many American families.

I read that suicide rate at Foxconn are lower than the rate in the USA population for that age group at large, so yeah, Foxconn really went above and beyond. Put a million workers in their 20's together at any company and see how many suicides you get. We had several at my university of 30,000 students every year. Seems like they just got bad press and pressure to do something about it because...Apple.

quadra 610 · December 7, 2016 3:46PM

Uh huh.

WAIT until this all pans out, and see HOW exactly it will pan out.

The SoftBank news, for instance, is almost comedy. It's a private equity fund that provides loans to startups in the US, with around 60% coming from the Saudi royals. Same as if Citi or anyone else were to provide SBA loans for $50 billion.

It's even worse than that, actually. The investment money was there before, well before Trump claimed credit for it.

jbdragon · December 7, 2016 3:54PM

irevolt said:

In Apple’s seeking for ways for employment equality (US workers to match China), tax breaks, repatriating off-shore banked monies, they have convinced Foxconn to invest 7 billion dollars in the US for building manufacturing facilities. I’ll bet that the Trump family will be the land developers in this deal and they will build living quarters for Americans that mirrors the Foxconn buildings in China complete with nets to catch the workers driven to suicide by working conditions.

Well the U.S. Suicide rate is higher then that of a Foxconn Employee in China!!! I think it's something like 4 times higher then a Foxconn Employee, though it's 10 times higher in China then a Foxconn Employee in China. So not sure what your point here is. Keep the jobs out and people on welfare?

fallenjt · December 7, 2016 4:28PM

daveinpublic said:

irevolt said:

In Apple’s seeking for ways for employment equality (US workers to match China), tax breaks, repatriating off-shore banked monies, they have convinced Foxconn to invest 7 billion dollars in the US for building manufacturing facilities. I’ll bet that the Trump family will be the land developers in this deal and they will build living quarters for Americans that mirrors the Foxconn buildings in China complete with nets to catch the workers driven to suicide by working conditions.

But in actuality, not a bad thing for many American families.

Can Foxconn afford US minimum wage of $15 to beat McDonald?

eliangonzal · December 7, 2016 4:33PM

Well, this is how the con always works: you see dividends at the start, feel good about your choice, and then the checks stop coming. And then your phone calls stop getting answered.

It would behoove any citizen to learn the details of any big, wide-eyed promises (see Carrier deal, details of). But then again, with so much devotion to fake news....

thrang · December 7, 2016 4:43PM

Great news if true.

anantksundaram · December 7, 2016 4:45PM

I think that Foxconn and Apple should place a serious long-term bet on the US and India.

In the US, build a company township to house workers. Train people. Import people, if needed, under legally crafted visa programs (as the software industry did). Set it up in the South, where you don't have to deal with backward-thinking unions and lousy winter weather. Start to build a components supply chain in Mexico and the stable economies of Central America and the Caribbean (including, possibly post-Castro Cuba).

Similarly, in India -- which does not lack for human capital, but the big problem is hard infrastructure -- do many of the same things, including partnering or co-investing in helping build out ports, roads, and energy. A lot can be done for not too much money. The Modi government, which is easily one of the most non-corrupt in India's history, is wide open for business.

The opportunities, done right, could be immense.

boltsfan17 · December 7, 2016 4:50PM

anantksundaram said:

I think that Foxconn and Apple should place a serious long-term bet on the US and India.

In the US, build a company township to house workers. Train people. Import people, if needed, under legally crafted visa programs (as the software industry did). Set it up in the South, where you don't have to deal with backward-thinking unions and lousy winter weather. Start to build a components supply chain in Mexico and the stable economies of Central America and the Caribbean (including, possibly post-Castro Cuba).

Similarly, in India -- which does not lack for human capital, but the big problem is hard infrastructure -- do many of the same things, including partnering or co-investing in helping build out ports, roads, and energy. A lot can be done for not too much money. The Modi government, which is easily one of the most non-corrupt in India's history, is wide open for business.

The opportunities, done right, could be immense.

I like your ideas but we should be training American workers here in the U.S., not importing workers under the H1B visa program.

anantksundaram · December 7, 2016 4:54PM

boltsfan17 said:

anantksundaram said:

I think that Foxconn and Apple should place a serious long-term bet on the US and India.

In the US, build a company township to house workers. Train people. Import people, if needed, under legally crafted visa programs (as the software industry did). Set it up in the South, where you don't have to deal with backward-thinking unions and lousy winter weather. Start to build a components supply chain in Mexico and the stable economies of Central America and the Caribbean (including, possibly post-Castro Cuba).

Similarly, in India -- which does not lack for human capital, but the big problem is hard infrastructure -- do many of the same things, including partnering or co-investing in helping build out ports, roads, and energy. A lot can be done for not too much money. The Modi government, which is easily one of the most non-corrupt in India's history, is wide open for business.

The opportunities, done right, could be immense.

I like your ideas but we should be training American workers here in the U.S., not importing workers under the H1B visa program.

Of course we should. We don't have them in the sheer numbers that are needed, unfortunately. We're talking in the many hundreds of thousands, perhaps even millions. Foxconn alone has ~1.5M employees. Think of what is additionally required for the components supply chain.

boltsfan17 · December 7, 2016 5:14PM

anantksundaram said:

boltsfan17 said:

anantksundaram said:

I think that Foxconn and Apple should place a serious long-term bet on the US and India.

In the US, build a company township to house workers. Train people. Import people, if needed, under legally crafted visa programs (as the software industry did). Set it up in the South, where you don't have to deal with backward-thinking unions and lousy winter weather. Start to build a components supply chain in Mexico and the stable economies of Central America and the Caribbean (including, possibly post-Castro Cuba).

Similarly, in India -- which does not lack for human capital, but the big problem is hard infrastructure -- do many of the same things, including partnering or co-investing in helping build out ports, roads, and energy. A lot can be done for not too much money. The Modi government, which is easily one of the most non-corrupt in India's history, is wide open for business.

The opportunities, done right, could be immense.

I like your ideas but we should be training American workers here in the U.S., not importing workers under the H1B visa program.

Of course we should. We don't have them in the sheer numbers that are needed, unfortunately. We're talking in the many hundreds of thousands, perhaps even millions. Foxconn alone has ~1.5M employees. Think of what is additionally required for the components supply chain.

True. Short term, we would have to use foreign workers. Long term, train more American's for these jobs. Supply chains could be built in places such as Panama or Costa Rica since both those countries have good ports.

SpamSandwich · December 7, 2016 5:21PM

The prospect of having to pay a 30+% tariff for outside the US manufactured products really is having an effect. Who knew? /s

mac_128 · December 7, 2016 7:18PM

boltsfan17 said:

anantksundaram said:

boltsfan17 said:

anantksundaram said:

I think that Foxconn and Apple should place a serious long-term bet on the US and India.

In the US, build a company township to house workers. Train people. Import people, if needed, under legally crafted visa programs (as the software industry did). Set it up in the South, where you don't have to deal with backward-thinking unions and lousy winter weather. Start to build a components supply chain in Mexico and the stable economies of Central America and the Caribbean (including, possibly post-Castro Cuba).

Similarly, in India -- which does not lack for human capital, but the big problem is hard infrastructure -- do many of the same things, including partnering or co-investing in helping build out ports, roads, and energy. A lot can be done for not too much money. The Modi government, which is easily one of the most non-corrupt in India's history, is wide open for business.

The opportunities, done right, could be immense.

I like your ideas but we should be training American workers here in the U.S., not importing workers under the H1B visa program.

Of course we should. We don't have them in the sheer numbers that are needed, unfortunately. We're talking in the many hundreds of thousands, perhaps even millions. Foxconn alone has ~1.5M employees. Think of what is additionally required for the components supply chain.

True. Short term, we would have to use foreign workers. Long term, train more American's for these jobs. Supply chains could be built in places such as Panama or Costa Rica since both those countries have good ports.

I'm sure this is exactly what all those out of work coal miners and steel worked had in mind when they voted for Trump. Hey it will pay minimum wage, not the $20-30 plus an hour they were getting, but it's a job right? If they save long and hard, they might be able to get their boats back. Of course they won't be able to buy the products hey make because Apple will have to charge a lot more to keep their margins to offset the higher labor costs.

apple jockey · December 7, 2016 7:31PM

President Elect Trump deserves much credit in stirring the commerce pot. There is no other reason that big opportunities and big changes seem to be happening on the national and international scene. If he is able to continue the momentum he has created, profound changes for the better may lie ahead. Kudos to Mr. Trump. Now, sir, protect our civil and human rights, stand for freedom and tolerance, come on board the ' climate science train', fix your conflicts of interest and we may have ourselves a winner.

On on another note, 75 years ago today, many brave Americans showed us all what really matters. America strong and free! All of us must work together to form a more perfect union! Whatever freedom loving country we may live in. We are all planetary citizens.

Thanks so much, too all of our brave Soldiers, Sailors, Airmen and Marines from all eras of American History. America is Great and we all must always work together with the goal of improving it further.

Very best to all who who work towards a 'free world' for all! ☮️

retrogusto · December 7, 2016 7:37PM

As robots increasingly replace workers (which is already happening and seems inevitable), the cost difference between locations for assembly is bound to decrease. Many of the components come from elsewhere, but for devices that will be sold in the US, it eventually may not make that much of a difference if everything is shipped to the US as components, partially assembled devices or completely assembled devices.

netrox · December 7, 2016 8:08PM

How can Trump make agreements if he is still not a president? He has no authority to impose tariffs or any other policies until he becomes a president.

apple jockey · December 7, 2016 8:14PM

Because the smart politician, business person,average Joe/Jane steer towards where the ball is headed. The 'mover and shaker' class can see and anticipate large changes ahead. Therefore people, nations and business adjust appropriately.

Apple assembly partner Foxconn plans US expansion

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