Apple Gets White House Nod with $1B Backyard Investment

Apple CEO Tim Cook having a conversation with IBM chair, president and CEO Ginni Rommetty

The White House has acknowledged Apple’s pledge to start a $1 billion fund to invest in U.S. advanced manufacturing capabilities, indicating that tech CEOs and the president are at least appearing to come together on some key policy issues.

The implication for other companies is that it may be time to consider investing more in U.S. jobs. As in other instances, however, Apple’s promise may not have been entirely new, while many other CEOs have indicated they’ll need to see more progress on tax reform before turning on the investment taps.

While Apple CEO Tim Cook didn’t specify how many jobs the investment would create, the announcement supports the president’s job-creation narrative after relations with Silicon Valley were stretched by its opposition to his immigration ban.

“The president’s policies have created an environment and provided the confidence in the economy needed to foster such investments as Apple is making,” the White House said in a statement.

“The president’s policies have created an environment and provided the confidence in the economy needed to foster such investments as Apple is making.”

Cook’s announcement, made during an interview on Wednesday with CNBC, came right out of the CEO playbook for dealing with Trump: try to find some common ground with the president and make a public commitment to advance those mutual interests, no matter how vague the actual commitment.

The investment, while providing a good publicity opportunity, didn’t appear to represent a major change in Apple’s strategy. Cook, for instance, mentioned that the company had already created 2 million jobs in America, including at a laptop manufacturing facility in Texas that opened in 2013.

Still, $1 billion is not to be scoffed at and it’s debatable whether Apple could have gotten more bang for its buck by spending the money offshore.

The world’s biggest listed company by market value is set to benefit perhaps more than any other from potential changes to the U.S. tax code pushed by Trump that could allow it to repatriate billions of dollars held overseas.

Cook said Apple would borrow to fund the new investments because most of its $257 billion cash balance is currently held offshore. Apple is already talking to one potential funding recipient, with more details to come later in the month, he said.

American companies are currently facing a shortage of skilled engineers and Cook said he hoped Apple’s new investment would create more jobs. He also said the company intended to train more people to code “so they can pursue their passion”, without being more specific.

‘We can be the ripple in the pond,” he said. “Because if we can create many manufacturing jobs, those manufacturing jobs create more jobs around them because you have a service industry that builds up around them.”

Earlier this week, Infosys CEO Vishal Sikka announced that the Indian outsourcing giant would hire another 10,000 Americans over the next two years. The move, which would boost the company’s entire workforce by 5% in a country with comparatively higher wages, came just two weeks after Trump announced a potential clampdown on skilled immigration laws. IBM also has pledged to hire thousands more U.S. workers in the wake of Trump’s election.

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Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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