Apple has created a $1 billion fund to foster high-tech manufacturing in the U.S.In a chat with CNBC’s Jim Cramer earlier this month, Apple’s CEO Tim Cook made the big announcement, and expressed the company’s aim to mobilize the fund for boosting domestic employment in advanced manufacturing, while expecting that to ripple into more job creation in the nation.This should spell good news for U.S. employment, especially as traditionally lower-cost nations have taken many tech-manufacturing jobs.
Looking to galvanize innovation on domestic soil, Apple’s Advanced Manufacturing Fund already has its first recipient. Last week, the firm announced its $200 million investment, out of the billion-dollar fund, in U.S.-based glass manufacturer, Corning Inc. Corning has been supplying glass for iPhones and iPadsover a decade now, and the latest investment from Apple is expected to bolster the American manufacturer’s research & development, high-tech glass processing and capital equipment requirements.
Even before the billion dollar-fund announcement, Applehas been gearing up toadd jobs in its home country.In2013, Apple started producing Mac Prosfrom Austin, Texas using domestically-made componentsas part of its “Made-in-USA” drivefollowing years of disapprovalfrom labor advocates regarding the working conditions in its contractors’ factories in China.The same year, the firm announced its plans to operate a new facility in Mesa, Arizona, which was estimated to create more than 2,000 jobs in manufacturing, engineering and construction.
But the announcement of a new fund – specially set aside for advancing manufacturing in the U.S. – takes Apple’s commitment towards domestic innovation and employment to another level.
Is Apple’s Fund theOxygen for U.S. Electronics Industry?
Apple’s initiative couldn’t have come at a better time for U.S. tech manufacturing. The number of employees in computers and electronic product manufacturing in the nation is at all-time lows, and the annual labor productivity index for the sector has fallen more than -9% as of 2016 from its 2011 peak (as indicated by U.S. Bureau of Labor Statistics data).
The above statistics shed led on an area of opportunity for the sector -building and upgrading U.S. facilitiesand/or training more Americans for the new era of high-tech manufacturing. Both of which Apple’s ‘domestic-drive’ should help contribute to.
Bottom Line for Investors
Last year, Apple spent over $50 billion with more than 9,000 domestic suppliers and manufacturers (according totheir latest press release). And now, the iPhone maker’s$1billion fund only fuels more possibilities for domestic job creation and productivity, particularly in advanced manufacturing.
Investors may be curious to know about the effects of Apple’s “billion-dollar” decision on not just domestic manufacturing output, but also on the their supply chain costs and product prices, following its focus on employment in the U.S. relative to other nations. At the moment, it might be too soon to assess the full impact, but it helps to stay up-to-date on the unfolding of developments of any company or sector to make confident investment decisions.
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