Don’t Believe Apple’s U.S. Job Tally

It's really an often-tried attempt to change a damaging image

   

In a claim that sounds like it came straight from the presidential campaign trail, Apple (NASDAQ:AAPL) says it has  “created or supported” 514,000 American jobs. Much like most politicians’ claims, this one is inflated. But that’s not the worst of it.

The company-commissioned report released last week by Analysis Group was a cynical attempt at rebranding Cupertino, Calif.-based Apple as being as “American as apple pie” rather than an adroit exploiter of the global economy. The effort fails on many counts.

For one thing, the report is vague, speaking of 304,000 “current jobs” and 210,000 “iOS app economy jobs” without explaining too much. Technology analyst Rob Enderle tells InvestorPlace that although Apple’s late co-founder Steve Jobs preferred having employees close to home, his successor Tim Cook likely would increase hiring overseas and that his U.S. workforce would be “diminished” as a percentage of the overall total in the coming years.

Sadly, Apple’s botched efforts at image-changing are hardly without precedent. In 2000, BP (NYSE:BP) famously launched its “Beyond Petroleum” public relations campaign, which was soon ridiculed when it became apparent that the oil giant’s investment in alternative energy was minuscule. At the time of the Gulf oil spill, BP was mocked anew by critics who noted sarcastically that the company was still very much in the oil business.

In 2010, clothing retailer Gap (NYSE:GPS) tried to shift its image by unveiling a new logo that was so badly received that some thought it was a public relations stunt. Gap quickly ditched the effort. Comcast‘s (NASDAQ:CMCSA) attempt to rename its poorly thought of Internet services as Xfinity were also nearly universally derided. It takes far more than such superficial changes to really alter a company’s nature.

Whether Apple’s effort regarding its American job creation will prove to be as epic a failure remains to be seen. It’s off to an auspicious start judging from the self-congratulatory tone of the statement on its website, which noted its jobs figure “includes workers in Texas who manufacture processors for iOS products, Corning (NYSE:GLW) employees in Kentucky and New York who create the majority of the glass for iPhone.”

At least Apple has followed up with an announcement on Friday that it’s expanding its presence in Texas and planning to add 3,600 jobs there over the next 10 years.

Samsung Electronics employs about 2,400 people at its plant in Austin that makes the Apple-designed A5 microprocessor — the brain that powers Apple’s iPad and iPhone, according to the Greater Austin Chamber of Commerce. The Korea-based company recently announced a $3.6 billion upgrade to the plant. But Enderle notes that Apple has been “shifting away” work from Samsung due to the legal feud between the two companies over patents. Chips made at that plant are also used in Samsung’s rival products such as the Galaxy Tablet, which undercuts the argument that Apple saved those jobs.

The Corning plant in Harrodsburg, Kent, makes the Gorilla Glass expected to be used in the iPhone 5 (and may be in other Apple products, but the company is pretty secretive about that). It employs about 350, and another 50-100 workers in New York also do work for Apple, said Tim Tuttle, the United Steel Workers Union chair responsible for labor agreements in the glass industry, in an interview. Rivals of the iPhone and iPad are marketing their association with the product because of its durability, Enderle said.

One thing is for sure: Regardless of how much of their day is devoted to Apple, workers at its U.S. suppliers are treated far better than their counterparts in Asia. Salaries at Samsung’s Austin plant range from $53,594 to $100,843, according to PayScale. Skilled workers at Corning can earn $30 to $32 an hour, Tuttle said. But even after recent raises of about 25%, junior-level workers at Foxconn, a big Asian supplier for Apple, earn about $290 a month.

Speaking of Foxconn, that company also has several offices in the U.S. Wonder if those jobs were part of Apple’s job-creation total. Samsung, Foxconn, Analysis Group and Apple couldn’t be reached for comment.

–Jonathan Berr is an Apple iPhone, iPad and MacBook user. However, he doesn’t hold Apple shares.


Article printed from InvestorPlace Media, http://investorplace.com/2012/03/dont-believe-apples-u-s-job-tally/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.