Apple Inc. (NASDAQ:AAPL) may not be bringing iPhone 8 manufacturing to the U.S., but the company did recently pledge to invest $1 billion to promote the creation of American manufacturing jobs.
This morning, AAPL announced the first beneficiary of its Advanced Manufacturing Fund: Corning Incorporated (NYSE:GLW) — maker of the Gorilla Glass found on iPhones and iPads — will receive a $200 million Apple investment.
Corning Is the First Advanced Manufacturing Fund Recipient
AAPL sent out a press release this morning touting its $200 million investment supporting Corning’s “revolutionary glass production methods.”
Corning has been a supplier for the iPhone during its entire decade-long run, providing the Gorilla Glass that protects the display. AAPL spiked out Corning’s 65 year-old Harrodsburg facility as being the focus of the Apple investment in Corning’s capital equipment, R&D and state-of-the-art glass processing.
Apple had this to say about why it chose the Gorilla Glass maker for its first Advanced Manufacturing Fund investment:
“This partnership started 10 years ago with the very first iPhone, and today every customer that buys an iPhone or iPad anywhere in the world touches glass that was developed in America. We’re extremely proud of our collaboration over the years and we are investing further with Corning who has such a rich legacy of innovative manufacturing practices.”
Corning’s CEO was also quoted in the press release:
“This investment will ensure our plant in Harrodsburg remains a global center of excellence for glass technology.”
Apple also points out that Corning uses sufficient renewable energy to cover all of its U.S. Apple manufacturing needs — another plus for AAPL, given its commitment to environmental sustainability.
Why AAPL Created the Advanced Manufacturing Fund
Under the Trump administration, bringing jobs back to America has been a high-profile priority, especially when it comes to manufacturing jobs.
Apple was in the spotlight as a prime example of a U.S. company that has outsourced virtually all manufacturing jobs related to its most successful product — the iPhone — to overseas companies, primarily China’s Hon Hai Precision Industry Co., Ltd (OTCMKTS:HNHPF), better known as Foxconn.
The pressure on AAPL to move those jobs to America has been in intense, but the reality of the situation is nowhere near as simple as shifting production the way automakers can. Apple lacks U.S. factories and a trained workforce, and much of its supply chain is located in China.
Unable to make a Made-in-the-USA iPhone happen, AAPL instead created the $1 billion Advanced Manufacturing Fund. Investments made through this fund are intended to bolster U.S. manufacturing jobs through its American suppliers. It’s not direct employment, but sends a strong message that Apple is committed to American jobs.
Apple’s U.S. Jobs Message
In case the point of the Advanced Manufacturing Fund wasn’t clear, Apple used today’s press release to summarize its U.S. jobs clout.
Apple says its partnership with Corning has “created and sustained nearly 1,000 US jobs across Corning’s R&D, manufacturing and commercial functions, including over 400 in Harrodsburg.” In addition, the company says it now supports 2 million jobs in the U.S., including 450,000 with the 9,000 American suppliers and manufacturers AAPL spent over $50 billion with last year.
Point made. The iPhone may not be manufactured on American soil, but Apple still generates a huge number of U.S. jobs, a number that will grow thanks to its Advanced Manufacturing Fund. Corning was a canny choice for the first Apple investment. The glass manufacturer has been a partner since the first iPhone, it’s likely to be a big part of the 10th anniversary iPhone 8 (which is expected to have a glass back), it’s a well-known American company, and it also has green cred when it comes to producing Apple’s components.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.