Tags
Apple Computer, China, domestic content, Donald Trump, Following Up, India, manufacturing, Obama, offshoring, Steve Jobs, Trade
The evidence just keeps coming in that folks like presumptive Republican presidential candidate Donald Trump are right to insist that better U.S. trade and other public policies can bring lots of offshored manufacturing production and jobs back to the United States, and keep lots of domestic industry in place. And this same evidence keeps demonstrating that their critics are either actively misleading the public or peddling their own ignorance,
As noted last month, General Electric CEO Jeffrey Immelt has made clear his intention to respond to what he views as rising protectionism in the United States and around the world by localizing production – i.e., increasingly building GE products where they’re consumed, and resorting less and less to supplying its markets from outside those markets.
In blunter terms, Immelt has declared that this giant multinational will essentially act as various governments want the company to act. Contrary to the claims of trade policy cheerleaders, GE will not tell these governments to go take a hike because in a globalized world, businesses like his can pick and choose production sites as they please. In the process, of course, Immelt confirmed Trump’s claim that the United States has more than enough leverage to attract more production and jobs to its shores.
Now an even bigger company (at least by the measure of market capitalization) reportedly is also asking “How high?” when countries say “Jump!” – Apple Computer. According to Bloomberg, “India is seeking a commitment from Apple Inc. to bring manufacturing facilities to the country before the government will approve the iPhone maker’s request to open its own retail stores, according to a senior government official with direct knowledge of the matter.”
The story goes on to explain that it isn’t just Apple that faces such conditions: “India requires companies to procure at least 30 percent of their components locally if they want to sell through their own retail stores, with some exceptions. Apple makes most of its products in China and doesn’t currently meet that criteria.”
Nor has the company registered any objections so far – declining the Bloomberg correspondent’s request for a comment. And it’s not likely to, either. Again, to quote the article: “Apple has little market share in India now, as consumers opt for less expensive devices from rivals such as Samsung Electronics Co. and Micromax Informatics Ltd. The country is projected to have a billion smartphones sold over the next five years. A network of prominent stores could help not just burnish the brand, but also push the benefits of services from iTunes to Siri to potential customers.”
The likelihood that Apple will dance to India’s tune is interesting not only because the company has become a 21st century icon, but because reportedly it received a similar quasi-request from President Obama in 2010, and got an unmistakable brushoff. Why can’t Apple make more of its products domestically, the president is said to have asked the late Steve Jobs, Apple’s co-founder and chairman. As this New York Times story described the exchange, “Mr. Jobs’s reply was unambiguous. ‘Those jobs aren’t coming back,’ he said, according to another dinner guest.
Apparently fearing a public backlash, Apple seems to have reached out to the Times reporters to make sure they didn’t simply write that the firm manufactures in places China to capitalize on cheap labor. Instead, executives told him, “the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that ‘Made in the U.S.A.’ is no longer a viable option for most Apple products.”
That’s a reasonable point. But it looks as though such industrial infrastructure barriers won’t be preventing Apple from moving a substantial amount of manufacturing and jobs to India – even though no one who knows the subject believes that India’s relevant capabilities are anywhere near as advanced or as extensive as America’s. The main difference between the two countries? One is led by a government that’s not reluctant to play hard ball with international businesses, and one that – as Trump charges – has been.
RealityChek 