Wednesday August 21, 2019
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Apple Expands Its Campus to Austin, East and West U.S.

The infusion of thousands of new and highly paid residents can ripple through an economy

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Apple, Campus, China
A customer is entering the Apple store in Fairfax, Virginia. VOA

Apple will build a $1 billion campus in Austin, Texas, break ground on smaller locations in Seattle, San Diego and Culver City, California, and over the next three years expand in Pittsburgh, New York and Colorado.

The tech giant said Thursday that the new campus in Austin, less than a mile from existing Apple facilities, will open with 5,000 positions in engineering, research and development, operations, finance, sales, and customer support. The site, according to Apple, will have the capacity to eventually accommodate 15,000 employees.

The three other new locations will have more than 1,000 employees each.

Early this year, Apple said that it would make more than $30 billion in capital expenditures in the U.S. over the next five years. That, the company said in January, would create more than 20,000 new jobs at existing and new campuses that Apple planned to build.

Apple, Campus, Tim cook
Apple CEO Tim Cook speaks during an event to announce new products, Oct. 30, 2018, in the Brooklyn borough of New York. VOA 

Where U.S. companies open new facilities or plants has always had the potential for public and political backlash.

That potential has intensified under the Trump administration, which has pushed companies to keep more of their operations inside the country’s borders.

While CEO Tim Cook has steered mostly clear President Donald Trump’s ire, Apple did receive some push back three months ago from the White House.

Apple sent a letter to the U.S. trade representative warning that the burgeoning trade war with China and rising tariffs could force higher prices for U.S. consumers.

Trump in a tweet told Apple to start making its products in the U.S., and not China.

Apple uses a lot of facilities overseas to produce components and its products, including China.

Apple, Tim Cook, Campus
A guest looks at the Touch Bar on a MacBook computer shown in a demo room following the announcement of new products at Apple headquarters, in Cupertino, California. VOA

Top tech executives from Google, Microsoft, IBM, Oracle and Qualcomm gathered at the White House earlier this month to discuss strained ties between the administration and the industry, and trade tensions with China. Cook was not among them, nor was Amazon’s Jeff Bezos.

There are already 6,000 Apple employees in Austin, its largest operation outside of company headquarters in Cupertino, California, where 37,000 people are employed.

“Apple has been a vital part of the Austin community for a quarter century, and we are thrilled that they are deepening their investment in our people and the city we love,” said Austin Mayor Steve Adler in a prepared statement Thursday.

Apple said nearly a year ago that it would begin canvassing the U.S. for another campus.

Cities offered incentives to lure the company, but Cook avoided a high-profile competition that pitted them against one another as Amazon did over the last year and a half.

Apple, Tim Cook, Campus
iPhone 8 was also launched with a special edition red colour, Pixabay

Amazon, too, expands

Amazon announced in November after a 14-month search it had selected Long Island City, Queens, and Arlington, Virginia, as the joint winners. Each site will employ around 25,000 people.

Cities are eager to bring in more tech employers because companies like Apple and Amazon ladle out six-figure salaries to engineers and other skilled workers.

Also Read: China Bans iPhone Sales Due to Patent Dispute

The infusion of thousands of new and highly paid residents can ripple through an economy, with those employees filling restaurants, theaters, buying property and paying taxes.

Annual pay will vary at the new locations, but Apple workers in Cupertino have an average annual salary of about $125,000, according to a report the company submitted to the city. (VOA)

Next Story

World Leaders Prepare for G7 Summit Even As Fears Over Global Economy Increases

The economic fears are rooted in the trade war between the United States and China

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G7 Summit
Security concerns will also be high on the agenda. North Korea has resumed its ballistic missile tests. Pixabay

The G-7 host, Emmanuel Macron,  has made fighting inequality the theme for the annual meeting of the seven industrialized nations, which opens Saturday in the French seaside resort of Biarritz with the leaders of the United States, France, Britain, Germany, Italy, Japan and Canada in attendance.

The French president has invited leaders from several other countries, including six African nations, to take part in the annual discussion of major global challenges. But analysts say any grand ambitions for the summit will likely be stymied by pressing economic concerns.

Most worrisome are recent indicators from both sides of the Atlantic of slowing economic growth and a possible global recession.

Earlier this month, government bond yields in both the United States and Germany were briefly higher for two-year than 10-year bonds, a sign that investors see significant risks ahead, says economist Jasper Lawler of the London Capital Group.

“Particularly in the U.S., it’s actually been a very reliable signal to point towards a recession.”

Adding the investors’ fears, the usual fiscal tools to tackle a recession might not be available.

“We don’t have that usual fallback from central banks of cutting interest rates because they already have, and they are already at rock bottom levels,” says Lawler.

G7 Summit
Summit host France is determined to not let economics overshadow its own agenda. Pixabay

The economic fears are rooted in the trade war between the United States and China, which has resulted in both countries imposing tariffs on hundreds of billions of dollars’ worth of imports. Europe is suffering additional headwinds, says economist Lawler.

“The trade war, but also just the auto sector, the transition from using diesel cars to electronic vehicles. It’s a period of uncertainty that’s unduly affecting Europe.”

Summit host France is determined to not let economics overshadow its own agenda — and top of the list is climate change, says John Kirton of the G-7 Research Group at the University of Toronto.

“It’s driven by the scary science which is unfolding every day, but more importantly by the historic heat waves that have afflicted Europe, including France.”

U.S. President Donald Trump left last year’s G-7 summit in Canada early, before the leaders had discussed climate change, and later disavowed the final communiqué. This year France is determined to keep the United States on board, says Kirton.

“President Macron I think has structured his agenda to allow Donald Trump to be at his best. Gender equality — the president has been very good at that, it’s at the top of the French list. Education — yes, and also health. It’s the president of the United States that’s been pushing the G-7 to try to get it to deal with the opioid crisis.”

G7 Summit
U.S. President Donald Trump left last year’s G-7 summit in Canada early, before the leaders had discussed climate change, and later disavowed the final communiqué. Pixabay

Security concerns will also be high on the agenda. North Korea has resumed its ballistic missile tests.

Meanwhile the standoff between Iran and the West has escalated over the seizure of a British-flagged oil tanker in the Persian Gulf, which followed the detention of an Iranian vessel in Gibraltar.

Burgeoning anti-government protests in Russia and Hong Kong also pose questions for the G-7, says Kirton.

Also Read: Purchase Rights for Huawei Extended By US

“Have we seen the tide [change], where authoritarian leaders in various degrees are no longer in control? It may not be the way of the future. In fact, if that’s the case, then how can the G-7 activate its distinctive foundational issue: to promote democracy?” Kirton asked.

Meanwhile British Prime Minister Boris Johnson will meet Trump at the G-7 for the first time in his new role. Both leaders are hoping for a rapid trade deal amid signs of a steep economic downturn in Britain as it edges closer to crashing out of the European Union with no deal at the end of October. (VOA)