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Advice to Apple’s new boss: bring jobs back

Posted by Alan Wirzbicki  August 29, 2011 02:40 PM

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Apple is recognized as one of the most successful and innovative companies in history. Steve Jobs made Apple wildly successful with innovative products that command a premium price in the marketplace. His name on hundreds of patents, Jobs has been compared to Thomas Edison and Henry Ford.

Now that Jobs is stepping down, everyone is asking how his successor Tim Cook, can top that act. Here’s how: bring jobs back. We're not talking about Steve Jobs. Cook can bring the jobs making Apple products to the United States. He is the best man to do it — after all, Cook was instrumental in establishing and managing Apple’s manufacturing supply chain.

Apple is in a unique position to manufacture in the US. In a sector driven by price, Apple does not compete on price — it competes on quality. Apple products cost more and command a premium price because they’re better. Sound familiar? This has traditionally been the hallmark of American goods. Buyers pay more for products made in the US, because they are superior.

Look on Apple’s label and you’ll see “Designed by Apple in California, Assembled in China.” Foxconn, the giant contract manufacturer that makes iPhones and iPads in China for Apple, made headlines for its notorious working conditions when a number of its workers committed suicide. (The company addressed the problem by installing steel mesh over windows, hanging nets below open stairwells, and forcing employees to sign a legally binding document promising they won’t kill themselves.)

But Apple can well afford American labor. The trade journal Circuits Assembly reports Foxconn is paid roughly $6 for every iPod and iPhone unit — and that includes parts. In the final analysis, labor is a small part (probably less than 10 percent) of Apple’s cost of manufacturing, far less than capital equipment and components.

Apple has always been a leader in the consumer electronics industry. Steve Jobs opened new markets and created demand with models that did not even exist before. Tim Cook can lead the way again with a business model that will open new markets, boost demand — and spark broader economic recovery.

Lack of demand is the major problem facing the economy today. Apple will boost demand by bringing jobs back to the US and paying employees enough to buy the products they make (hat tip to Henry Ford). It will be creating a market as well as products. Right now, you can be sure the workers at Foxconn’s suicide factories, earning $150 a month and living in dormitories ten to a room, have neither the money nor the time to buy and use Apple products.

From its creation by a couple of inventors in a garage, to its legacy of innovative products and passionately loyal customers, Apple has been a uniquely American success story. By bringing jobs back, Tim Cook can write the next chapter in the story and make Apple truly as American as, well, apple pie.

Michele Nash-Hoff is the founder and president of ElectroFab, a sales agency representing US high-tech manufacturers. She is the author of “Can American Manufacturing be Saved? Why We Should and How We Can.” Curtis Ellis is executive director of the American Jobs Alliance, an independent, nonpartisan not-for-profit organization.

Tony Avelar/Bloomberg: Apple's new chief operating officer, Tim Cook.

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ABOUT THE ANGLE Online commentary and news analysis from the Boston Globe. The Angle is produced by Rob Anderson and Alan Wirzbicki. You can follow Rob on Twitter at @rcand.

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