Apple Could Help the USA and Help Itself

The CEO of Apple, Tim Cook, is failing Apple and is distracted by political issues. Cook challenged stockholders to get out of Apple stock if they disagree with the company's stance on sustainability and climate change. Cook, himself gay, is a crusader for gay rights. Cook is a preacher for political causes, and if the stockholders don 't like it, too bad. It may seem that Cook is a rebel, but his political stance is pretty normal for the elites of Silicon Valley. What isn't normal is to use his position as a soapbox for dogmatic politics. Cook's preaching may go over well in California, but probably not in other states and countries. It creates needless damage to the Apple brand. The top-level Apple computer is the Mac Pro. It took Apple six years, from 2013 to 2019, to bring out a new model. Six years is a century in the computer business. That six years is a sign of poor management and a lack of interest in customer needs. The previous model of the Mac Pro was one of the few Apple products manufactured in the United States. Now Apple is moving manufacturing of the new Mac Pro to China. Apple is asking for a guarantee from the U.S. government that Mac Pro–related items won't be subjected to future tariffs. This is arrogant. Apple obviously believes that the U.S. government should customize its foreign relations to suit Apple. In any case, President Trump has stated that Apple won't get a waiver on tariffs.

Apple's products can be manufactured in the U.S., but it is more convenient to push the manufacturing off to a contractor in China rather than tackle the difficult task of manufacturing in the U.S. Computers and electronic devices are largely manufactured by automation. Much of the cost is in the chips and display, which are purchased from specialty manufacturers. In the short run, it will be challenging to manufacture in the U.S., but in the long run, it will pay dividends, resulting from the synergy between design and manufacturing. Apple, currently making large profits, is lazy and taking the easy way out. Already, Asian manufacturers like Huawei and Samsung are gaining a technology advantage in mobile phones, the core of Apple's business. Apple is telling us how wonderful it is because it claims to be running on renewable energy and it recycles aluminum. These things are beside the point. Instead of wasting its money and taxpayer solar subsidies on solar-powered server farms, Apple should be investing in the future, including manufacturing in the U.S. Complacency is the name of the game in Cupertino, the location of Apple's headquarters. Massive manufacturing in China promotes the continuing transfer of technology to China. If this keeps up, Apple may next move its engineering design to China and then finally sell the entire company to China, though Apple has the financial resources to move its manufacturing and thus make a significant contribution to the American high tech industry. America's tax and financial incentives need to be changed so companies will take a long-term outlook and contribute to the prosperity of the U.S., not China. A starting point might be to create an index measuring how much a company contributes to enhancing the economy and technological base of the United States. This might be complex and controversial, but it could provide a corporate citizenship score to give companies a target more relevant to the common welfare than their carbon emissions. Engraved on the bottom of my MacBook Pro, it says: "Designed by Apple in California. Assembled in China." This is a subtle lie. It is manufactured in China, not merely assembled. The manufacturing operation is highly complex and critical to quality. When a device like an iPhone or Mac computer is tooled for manufacturing, many problems are encountered that have to be communicated to the design team. Recent major Apple screw-ups include the butterfly keyboard, the iPhone antenna, and the wireless iPhone charger. Having different languages, different continents, and different time zones does not help. The scale of difficulty is illustrated by the fact that Apple buys 50 business class seats a day from San Francisco to Shanghai. Targets for Chinese corporate and state intelligence abound. Putting the manufacturing in China under control of a foreign company, Foxconn, is a sure recipe for disaster in the long run. The engineers and management in China are learning a lot about Apple's products and Apple's secrets. Apple is fostering a future Chinese Apple. Long-term thinking apparently died with Steve Jobs, the innovative founder who made Apple what it became. Turn this scenario around. If Apple starts manufacturing in the U.S., American engineers and management will start learning a lot about Chinese manufacturing techniques. We do have something to learn. Apple would be creating a new manufacturing powerhouse in the U.S. At first it will be difficult, but in the end, there will be big dividends. Maybe Apple should try being red, white, and blue instead of green. Who isn't tired of big American companies acting as if they are citizens of the world, so special that they can ignore trivia like nationality and patriotism? A company with a heavy presence in China inevitably becomes an advocate for Chinese interests. Companies that have extensive ties to China, a geopolitical competitor, are treading into dangerous territory. We had a close call in the 2016 election. If Hillary Clinton had been elected, the country would have been doomed to at least another four years of stagnation and stupidity. The geniuses and billionaires of Silicon Valley voted overwhelmingly for Hillary. Santa Clara County, the heart of Silicon Valley, voted 73% for Hillary. Cook donated $236,000 to Hillary's campaign. Clinton received $1.8 million from Apple's workforce. Trump got $6,786. The scale of this disparity shows that Apple workers who favored Trump were afraid to donate, knowing that their donations would be a matter of public record. Apple's 2018 Environmental Responsibility Report has this pretentious headline: "To ask less of the planet, we ask more of ourselves." One of Apple's priorities is to "[c]onserve precious resources so we all can thrive." Our resources, precious or otherwise, are not in short supply and are not going to run out in the foreseeable future. That is the fallacy of the sustainability movement. The last word on resource depletion was given by Julian Simon in the book The Ultimate Resource 2. The ultimate resource is the technological expertise that Apple is busy sending to China. Apple makes a big deal about recycling aluminum. But aluminum is the third most common element in the Earth's crust. It will never be in short supply. It takes energy to produce aluminum and energy to recycle aluminum. The free market and Alcoa will take care of producing and recycling aluminum. Apple should attend to its knitting, not aluminum. According to Forbes, Cook has concentrated on building a harmonious culture at Apple and getting rid of people with disagreeable personalities. Steve Jobs was the model of a person with a disagreeable personality. The corporate raider, Carl Icahn, characterizes most CEOs as highly likable but not too bright. Icahn is biased, but his characterization is based on broad experience. Cook may or may not fit this stereotype, but he surely is not a Steve Jobs. Norman Rogers writes often about technology, climate change, and renewable energy. He has websites: https://climateviews.com and https://NevadaSolarScam.com. He is the author of the book: Dumb Energy: A Critique of Wind and Solar Energy.