Donald Trump Tells Tim Cook He'll Offer Apple 'Very Large Tax Cut' to Make Products in America

[TechZeke]

I've said this before and I'll say it again: It's going to be hilarious when Apple eventually does move manufacturing back home and hires hardly any people to work in the factory. Why? Because they have a new version of Liam—their loveable recycling disassembly robot—which can completely assemble an iPhone from scratch. It's incredibly short sighted to see something like Liam and not believe that the next logical step is to make a version that can construct any Apple device. But then again this is Donald Trump we're talking about.

To get the iPhone to be made in America without becoming astronomically expensive means robots and not thousands of jobs. If anything the government should be providing incentives to these companies to grow their development efforts. Apple has created tons of jobs through the creation of the App Store. However instead they want to increase surveillance and put back doors into our software, making American operating systems and therefore hardware extremely unappealing to the rest of the world.

Through recent work with robots, AI neural networks and automation such as self-driving cars, I fully expect more and more jobs to be replaced and not created during the Trump administration. Are they going to pass laws stifling this innovation? Trump has already talked about cutting funding for renewable energy initiatives, which makes no sense as cheaper renewable energy will benefit our economy most and actually make America great again. Many third world countries recently signed an accord pledging to become 100% energy efficient. We run the risk of falling behind the worlds poorest countries in the long run with these type of policies.

I wish we could get some moderate libertarians to run the country.

Doesn't matter. Apple's investment will be here, not overseas. If foreign cars companies can manufacture automobiles here, Apple can manufacture a damn smartphone here. Robots still require numerous engineers and technicians to work. Maybe Apple should put their billions in investing in schools and technical colleges to build up a world class workforce of engineers and technicians instead getting talent from overseas as well.

Also, California is an example where too much emissions standards can ending causing more damage than good. Prime example: CNG bus engines. Transit agencies are forced to not use diesel, so many have turned to CNG. Problem: The high standards cause many of the competing bus engines to fall out of the market. Now cummins pretty much has a monopoly, and they compromise the reliability of the engines to meet standard. Ask any California transit agency maintenance team- the engines last a mere 50,000 miles before they need complete overhaul. Many agencies have had to waste taxpayer money on rebuilding engines in brand new buses. Electric buses are gaining traction, but they cost 2x as much as a standard bus.

Meanwhile, the newest diesel locomotives for commuter rail(under testing a SoCal commuter rail agency Metrolink) have reduced emissions by 85%.

I'm all for helping the environment, but many alternative energies are not viable yet in large scales. We should also be investing in improving current technologies as well in the meantime.

 

[Mildredop]

Manufacturing will be mostly done by robots within 5 years anyways.

Not when labour in China is so cheap. Designing, building and maintaining robots is pricey.

But with the Chinese continuing to multiply faster than imaginable, labour there will continue to be cheap.

 

[citizenzen]

Lower taxes for everyone huh?...... ok. But who is going to pay for the tax cuts?

Party pooper. Who cares? America will change it's name to Amazica. It'll be fabulous.

 

[manhattanboy]

I've said this before and I'll say it again: It's going to be hilarious when Apple eventually does move manufacturing back home and hires hardly any people to work in the factory. Why? Because they have a new version of Liam—their loveable recycling disassembly robot—which can completely assemble an iPhone from scratch. It's incredibly short sighted to see something like Liam and not believe that the next logical step is to make a version that can construct any Apple device. But then again this is Donald Trump we're talking about.

To get the iPhone to be made in America without becoming astronomically expensive means robots and not thousands of jobs. If anything the government should be providing incentives to these companies to grow their development efforts. Apple has created tons of jobs through the creation of the App Store. However instead they want to increase surveillance and put back doors into our software, making American operating systems and therefore hardware extremely unappealing to the rest of the world.

Through recent work with robots, AI neural networks and automation such as self-driving cars, I fully expect more and more jobs to be replaced and not created during the Trump administration. Are they going to pass laws stifling this innovation?

Thanks for your post. Nice to see someone understands what is coming.

On automation, I believe Apple actively don't pursue an automated production line for the iPhone. Wasn't the original iPhone supposed to have a plastic screen and Steve Jobs changed his mind at the last minute? If they had then had to go and reprogram and test all the robots on the production line to work with the new material it would have set the launch back many months, but humans are nearly instantaneously adaptable...

The newer robots are much more adaptable then you think and capable of finger-like dexterity. At least half of all jobs will be eliminated through automation, probably within the next 20 years; its happening in EVERY field.

 

[macsmurf]

Trump will say whatever he believes the person he's talking to at that moment wants to hear, making coverage of his conversations completely irrelevant. You guys are in for a rough four years. Let's hope the damage will be localized primarily to the US.

 

[sik08amg]

All I can say is that this is good for MR.

 

[manhattanboy]

Not when labour in China is so cheap. Designing, building and maintaining robots is pricey.

But with the Chinese continuing to multiply faster than imaginable, labour there will continue to be cheap.

This is why the major tech companies have invested R&D into Asia. They want the cheap expertise there to design the robots to inevitably cut out America all together.

 

[rdrr]

Except 2 things. The Chinese are starting to want higher wages. They want to be able to afford what they make and realize that they need more money to do that. Not going to happen overnight but their wages are ticking up.

And all we need is another spike in oil prices + increasing wages to make China uncompetitive. When oil is $140/bbl again it's a lot cheaper to pay workers a little more and not have to ship your stuff across the Pacific and then across the country.

While I work in the "Service sector", we need manufacturing jobs here in America. The 2 are intertwined and we need to get people back to making stuff again. Once people make stuff they have extra money and can buy stuff, thus perpetuating the cycle.

Hopefully as a businessman first (and politician second) Trump understands this. Sure can't be any worse than the last 8 years.

The problem is that people will not be making "stuff", it is going to be automated. Manufacturing jobs as you know them are gone. Just like toll booth collectors are gone. Technology is changing the world at a faster rate than we can imagine, and trying to go back to the "good old days" is folly. Most of the world is moving forward, why should we move backwards?

 

[Mildredop]

Production involves all kinds of jobs. I'm confident that this could be a big push to invest in production automation which could spin off a whole new industry in which the US could be a leader.

But automation would then defeat the "more US jobs" wouldn't it?

 

[Fzang]

On automation, I believe Apple actively don't pursue an automated production line for the iPhone. Wasn't the original iPhone supposed to have a plastic screen and Steve Jobs changed his mind at the last minute? If they had then had to go and reprogram and test all the robots on the production line to work with the new material it would have set the launch back many months, but humans are nearly instantaneously adaptable..

Of course nobody would spend time or money to pursue automation when outsourcing is easier and cheaper.

 

[dewski]

Oh yeah? http://www.theverge.com/2016/5/25/11772222/foxconn-automation-robots-apple-samsung-smartphones

accidental post

 

[Tonewheel]

source?

Source?? Do your own homework. (Psst...it's true)
http://www.nytimes.com/2011/10/05/u...erican-workers-in-place-of-migrant-labor.html
[doublepost=1479920286][/doublepost]

Except 2 things. The Chinese are starting to want higher wages. They want to be able to afford what they make and realize that they need more money to do that. Not going to happen overnight but their wages are ticking up.

And all we need is another spike in oil prices + increasing wages to make China uncompetitive. When oil is $140/bbl again it's a lot cheaper to pay workers a little more and not have to ship your stuff across the Pacific and then across the country.

While I work in the "Service sector", we need manufacturing jobs here in America. The 2 are intertwined and we need to get people back to making stuff again. Once people make stuff they have extra money and can buy stuff, thus perpetuating the cycle.

And yes we could live without China. It would take time as we'd have to increase manufacturing and figure out how to do without some of their precious metas but I think it could be done.

Hopefully as a businessman first (and politician second) Trump understands this. Sure can't be any worse than the last 8 years.

Don't kid yourself. It's shaping up to be far worse.

 

[chfilm]

The consequences of automation and digitalization are the real issues at hand here. Trump and his backwards facing class of globalization critiques are not gonna turn back the wheel of time, only gonna cause a lot of chaos in the meantime, instead of solving the issues that are truly pressing.

 

[slimothy]

It won't be as cheap as making them overseas, but bringing jobs here will be great. Just hope it doesn't impact the pricing of the products in any major way.

 

[usarioclave]

Trump is going trade us manufacturing investment for free repatriation of funds. That's a win win for everyone.

 

[rdrr]

Thanks for your post. Nice to see someone understands what is coming.


The newer robots are much more adaptable then you think and capable of finger-like dexterity. At least half of all jobs will be eliminated through automation, probably within the next 20 years; its happening in EVERY field.

I am with you that automation will eliminate nearly half the jobs jobs (manufacturing and service). However 20 years is way too long, it will be closer to 7 - 10 years.

 

[Sefstah]

Actually, there are many, many downsides to it...which is a big part of the reason it was outsourced in the first place. But hey, why make it complicated when it is much easier to just say "I'll bring jobs back, vote for me!"

Many, many downsides to bringing jobs and manufacturing back to US? Yet you failed to mention one. Give the guy a chance already!

 

[BootsWalking]

The tax subsidy is a tax cut (to all businesses). 15% vs 35% will let companies reinvest and hire new employees. Apple has created over 2 million US jobs since 2007 (according to a MacRumors article from 2 days ago). Do you know how many small business this is equal to? And that's just Apple ...

There are 28M small businesses in America. And Apple's 2M American jobs number is wildly overstated. It attributes hundreds of thousands of jobs to app developers LOL. Apple directly employs only 80K employees and probably less than 100K more indirectly its third-party domestic suppliers.

 

[skellener]

What are they going to make? Many products have questionable futures under Cook and the pipeline is mostly empty now. "Apple - we used to make stuff"

 

[gnasher729]

The tax subsidy is a tax cut (to all businesses). 15% vs 35% will let companies reinvest and hire new employees. Apple has created over 2 million US jobs since 2007 (according to a MacRumors article from 2 days ago). Do you know how many small business this is equal to? And that's just Apple ...

Actually, if you reinvest your profits then they are not profits anymore, so you pay no tax at all.

Today, if you have $100 profit as a company, you have the choice between putting $65 into your bank account, or investing $100 into the company, making it more valuable. With 15% tax rate, you have the choice between putting $85 into your bank account, or investing $100 into the company.

 

[DCIFRTHS]

I understand that it's an incentive for the greater good of bringing jobs back to the U.S., but why does it always end up being the big corporations that get tax cuts?

This is the trickle down theory that has never worked for the average American. The tax cuts that reduces the government's income have to me made up for somewhere else. That means either raising taxes, or cutting spending.

Of course, all the spending cuts will be from environmental. entitlement programs and other essential services. The tax increases will be on the majority of Americans - those living in the "middle class".
Additionally, if an import tax is implemented, who does that affect most? Again. Middle income Americans. Let's face it, if you're poor, you can't afford discretionary items, and if you are rich, you can afford a tariff.

Just look at the people he is picking to run his administration: Men that have been harsh on Social Security, and good to businesses - basically, people that don't represent the struggling American worker. Very good chance the AT&T deal will go through with the people Trump has lined up... It's amazing that this president elect now actually acknowledges that humans have effected climate change. Oh my! He actually admits something that has been staring us in the face for how many years now?

Depending on how this is handled, an Apple iPhone factory in the US will likely not do much more than help to get Trump reelected (as people will say "Look. he forced Apple to make a factory in the States") We will have to wait and see how this plays out.

BTW, still waiting for him to denounce the Hitler salutes (maybe he already did, and I missed it?). He certainly had enough to say about the Hamilton play, and his defense of his "let's send gays to rehabilitaion" VP elect.

The only part of this post directed to @joeblow7777 was the part about the factory.

 

[iReality85]

There's plenty of people with vocational (i.e. blue collar) skills here in the US. More than enough to even fill the hundreds of thousands of jobs companies like Foxconn and others employ to make the iPhone.

It ultimately comes to down to a question of public servitude. IMO, yes, Apple should have an obligation to employ as much US blue collar labor in the manufacturing of its products for all of the incentives and perks that it- as a company- enjoys being based in the US, lobbying, and taking advantage of US tax laws.

And despite selling less iPhones, it's being reported that Apple just broke the record for profit margins in the smartphone market last quarter (91%). So there is plenty of 'room' to employ US blue collar labor if they're breaking the bank with so much profit.

 

[Sefstah]

Just theorizing. Assume total cost will be higher even with incentives and potentially stronger dollar would lead to a devalued product when exporting. Not saying I know all this to be true. I just don't think it's as simple as more US production = better for US economy.

If you only see the negative in everything, thats all you will ever get.

 

[jimi78]

Don't fall for it Tim, 2 seconds after you open the factory Trump will send the FBI to put data stealing HW in all your phones. Also who will work there after Trump throws all immigrants in jail?

This is a top fortune 500 company so immigration status would not be a factor. Successful companies are not in the business of hiring somebody that could cause them to deviate from US regulations.

 

[gnasher729]

He's way ahead of schedule. It's because he actually cares. It has been decades since the US had a president that cared about the people.

And they won't get one next year.

When you see that the future US president's wife uses a TV appearance to flog off $10,000 bracelets, what makes you think he cares about "the people"? He thinks he is an another reality TV show.