Yesterday in an interview with CNBC's Jim Cramer, Apple (AAPL) CEO Tim Cook said the tech giant would be devoting $1 billion to promote "advanced manufacturing" jobs in the United States.
"We're announcing it today. So you're the first person I'm telling," Cook told "Mad Money" host Jim Cramer on Wednesday. "Well, not the first person because we've talked to a company that we're going to invest in already," he said, adding that Apple will announce the first investment later in May. -CNBC
Tim Cook announces a $1 billion investment in "advanced manufacturing" jobs in the U.S. https://t.co/zKZKNObjYw pic.twitter.com/h5BL1o7fec
— ZeroPointNow (@ZeroPointNow) May 4, 2017
Cook did not elaborate on what kind of "advanced manufacturing" jobs would be brought to the U.S., however Apple unveiled a webpage focused on job creation in conjunction with the CNBC announcement. This is not the first we've heard of Apple considering manufacturing in the U.S.; rumors were swirling late last year in The Nikkei, owner of the Financial Times,that in July of 2016, Apple had asked it's Taiwanese manufacturer Foxconn to estimate the cost of relocating iPhone assembly back to America in the event that Donald Trump won the US election - a move which could lead to nearly 700,000 jobs.
And while yesterday's $1b announcement doesn't necessarily mean iPhone manufacturing will to move the US, it does add Apple to a long list of U.S. companies focused on jobs in the United States. In the weeks after the November 8th election, companies including Ford, Carrier, General Motors, and Wal Mart made commitments to increasing or keeping jobs in the United States, in an effort to avoid a 35% tariff Trump had threatened on imports.
Thank you to General Motors and Walmart for starting the big jobs push back into the U.S.!
— Donald J. Trump (@realDonaldTrump) January 17, 2017
Repatriation
Possibly related to Apple's decision to invest $1 billion in advanced U.S. manufacturing jobs is increasing talk of a deal between the U.S. government and corporations to repatriate income currently held overseas - a move which would currently cost Apple nearly 40% on more than $230 billion in cash outside the United States. In January, both Donald Trump and Tim Cook were talking about a repatriation "holiday," with Trump proposing a one-time 10% tax rate on cash brought into the United States, and Apple's Cook saying such a move would be "very good for the country, and good for Apple."
For Apple, the largest company in the world which employs over 80,000 employees in the United States alone, repatriation would mean savings of around $50 billion in taxes. For other tech giants such as Microsoft, it would amount to roughly $28 billion on it's $124 billion cash hoard. Other industry titans would save massive amounts on their tax bill as well; Oracle would stand to avoid $9.5 billion in taxes, and Citigroup ($C), Amgen ($AMGN), Qualcomm ($QCOM), Gilead Sciences ($GILD) and many others would benefit to the tune of $5 to $10 billion in tax savings. Overall, Fortune 500 companies stand to reap over $500 billion in tax savings from Trump's 10% "repatriation holiday."
The notion of repatriation is not a new idea. Former President Barack Obama proposed a similar tax deal, and when his predecessor George W. Bush announced a one-time repatriation rate of 5.25%, corporations brought back over $300 billion into the United States - though it failed to translate to job growth per a 2011 Senate investigation of the Jobs Creation Act. In stark contrast, however, U.S. companies appear to be committing to job growth before any announced 'repatriation holiday,' which may bode well if in fact one is announced.
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