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Manufacture This

The blog of the Alliance for American Manufacturing

Will $1 billion mean much?

Apple has announced a new pot of money to fund domestically based advanced manufacturers. CEO Tim Cook told CNBC’s Jim Cramer on Wednesday that Apple would be seeding this fund with $1 billion – which is a lot of money, even for Apple, which has amassed more wealth than many nations, and keeps it offshore because it doesn’t want to pay taxes on it.

But I digress! Anyway, Cook didn’t reveal who first was gonna get that sweet, sweet moolah, though he did say that Apple was already in talks with a specific company about an investment. Details are scant.

Still, we can say it’s a good thing that Apple is looking to grow the advanced-manufacturing footprint in the United States. In his CNBC interview, Cook pointed to Corning and 3M, manufacturers who make stuff in America (and thereby, employ Americans) for Apple, as examples of the kinds of businesses the fund hopes to incubate.   

It’s gonna take an awful lot to get Apple to move production of, say, its iPhone to the United States. China has set up economic zones – like this one in particular – that make it incredibly cheap for Apple to manufacture there.

And that ecosystem of collocated manufacturers that tend to spring up around a major production operation? It’s gonna keep China’s manufacturers humming for years and years. Check out what this guy did, walking around the city of Shenzhen. He made a functioning iPhone out of parts purchased in street markets:

Apple’s $1 billion for an advanced manufacturing fund isn’t gonna do much for American manufacturing until, quite simply, pulls up stakes and brings production back to the States. Don’t hold your breath.