Manufacturing jobs (any jobs, really) are a hot-button topic these days, and our President has made no secret of his desire for big companies, and Apple in particular, to make more products here. In a Wednesday interview with Jim Cramer on CNBC’s Mad Money, Apple CEO Tim Cook announced that Apple is creating an advanced manufacturing fund, and seeding it with $1 billion to start.
CBNC.com has the video and a complete transcript of the wide-ranging conversation, and it’s worth a watch. These are the points that most piqued our interest—OK, and one that just made us laugh.
On creating jobs
Cramer asked Cook straight up, “You’re a huge company. What are you doing to create jobs?”
Cook responded that Apple had created 2 million jobs in the U.S., a stat he’d also mentioned in Tuesday’s Q2 earnings call. But this time he broke it down, and naturally those workers aren’t all wearing Apple logos on their shirts. Still, a lot of them are: Cook spoke of 25,000 employees doing R&D; 6,000 at Apple’s facility in Austin, Texas; plus all the employees at Apple’s retail stores. That’s nowhere near 2 million, but Cook also counts U.S. suppliers who make components here, like Corning glass and 3M adhesives used in iPhones and iPads.
Cook also gave Apple credit for its huge developer community. “And this developer community is almost 1.5 million people now,” he said. “These are folks from really small businesses, a party of one, to larger companies. And they’re writing apps that change the world. And we’re giving them the platform. And we’ve created an incredible store that allows them to sell their product in 155 countries in the world. It’s a really unbelievable empowering experience as a new business.”
Apple already invests in the developer community in different ways, from its new developer center in India to smaller gestures like offering WWDC scholarships and letting newbie developers tinker with Xcode before paying for the Developer Program. Cook also told Cramer that Apple would be putting more money behind teaching people to code, with announcements to come this summer. (Bet on WWDC.)
But Cook went on: “In the other category, manufacturing, we asked ourselves, ‘How can we get more people to do advanced manufacturing in the United States?’ And I’m proud to tell you that we’re creating an advanced manufacturing fund. We’re initially putting $1 billion in the fund.”
The fund will invest in small American companies manufacturing products here. Cook said Apple would announce the first investment from the fund this month. Apple could focus on companies that make components, but we selfishly hope the fund’s investments leads to more advanced accessories for our favorite Apple gadgets, like smart bands for the Apple Watch, new kinds of HomeKit devices, or wireless charging accessories.
When Cramer pointed out the $1 billion in seed money is a small slice of Apple’s $256 billion cash reserve, Cook pointed out that to get $1 billion in cash in the U.S., Apple would have to borrow some of it. “It’s $1 billion of our U.S. money, which we have to borrow to get. That’s another whole topic,” he said.
The other topic, of course, being taxes. Most of Apple’s cash reserves are held overseas, and Trump has spoken about a deal to let American companies in a similar position bring some of that cash home while getting a break on the taxes.
Cramer continued, “You know, President Trump’s saying, ‘We’ve got to give him repatriation. Who knows what he’ll do with all that money over there. We’ve got to give them the tax break.’ I mean, would you work closely with the President to get some of these things done so that you can do more job creation?”
Cook’s response was affirmative, of course. “Well, I think that repatriation, I actually think comprehensive tax reform is so important to this economy. If you think about it, what many, many companies now sell globally. If you sell globally, you earn money globally. If you earn money globally, you don’t—you can’t bring it back into the United States unless you pay 35 percent plus your state tax. And you look at this and you go, ‘This is kind of bizarre.’ You want people to use this money in the United States to invest more.”
“We are in a good position, but an unusual one,” he continued. “Our good position is we can borrow. And so to invest in the United States, we have to borrow. This doesn’t make sense on a broad basis, and so I think the administration you saw that they’re really getting this, and want to bring this back. And I hope that that comes to pass.”
Hinting at new products?
Apple doesn’t talk about products in the pipeline, but that doesn’t stop every interviewer from asking anyway. Cramer asked about everything. Tim demurred every time.
“Car?” Cramer tried.
“I can’t say,” Cook replied. “I can’t say that.”
When Cramer asked about Health, Cook mentioned losing 30 pounds with the help of his Apple Watch, then Cramer quickly moved on to artificial intelligence. Cook: “I don’t want to get into details, but there’s a lot more there.”
Cook himself then brought up augmented reality, but only to give his vague stock answer, “This is something we’re really excited about.”
Cramer even played the Dad Card, pleading with Cook for the release date of the next iPhone, “Because I want to get my daughter a new phone. I just need to know when.” (Nice try, Cramer—does any parent really want to get their kid a new phone? Or did he mean he wants his own new phone and give his old one to the kid?)
Cook told him to get an iPhone 7 or 7 Plus.