WCA March 2013

over the past decade or two. “It’s global competition,” the trade group’s president, Gene Burner, told the Sun , with the Internet making it easier for “the little guys” to sell to South Korea and for South Korea to sell to those companies’ customers. “Whether you’re big or whether you’re small, it’s still global.” Its image in need of burnishing, Apple says it will be bringing at least some production back to the US from Asia “The Mac is coming back to America, but it’s unclear whether Apple’s decision to manufacture one line of computers at home is a serious shift in corporate strategy or a much-needed PR adjustment.” In fact, Politico seemed quite clear about its own views on 6 th December news that Apple Inc would again manufacture computers in the United States. The Washington-centred political journalism site summarised the “growing rap sheet” on the consumer electronics giant whose chief executive, Timothy D Cook, said that, beginning in 2013, the company “will do one of [its] existing Mac lines” in the United States: The Justice Department says Apple tried to fix e-book prices; the company depends on cheap Chinese labour to turn big profits; and Apple, like many global firms, is holding billions in cash overseas. Apple has even taken a hit in the stock market: a few months ago, it peaked at over $700 per share but opened [6 th December] under $550 per share – a drop of more than 20 per cent. (“‘Made in USA’ Polishes Apple’s Image,” 6 th December). Apple, the biggest company in the world by market value, moved most of its manufacturing to Asia in the late 1990s. Ever since, the action has prompted resentment as an injustice to American workers and taxpayers. In an October debate on the campaign trail, President Barack Obama and his rival Mitt Romney clashed over the question of why the iPhone and iPad are not made in America. Mr Obama has repeatedly raised the point-of-production issue with Apple. At one meeting, according to Politico , he pressed Steve Jobs, the since-deceased Apple co-founder and visionary chief executive, on the subject of what it would take for Apple to resume production in the US. Mr Jobs said that the work would not be coming back. ❖ Now, Mr Jobs’s successor has said that Apple will spend $100 million to engage contract manufacturers in the US this year. The company provided no details, including which line of its Mac computer will be made in the US and what that might mean for American workers. Jared Bernstein, a former economic adviser to the White House and now a senior fellow at the Center on Budget and Policy Priorities, offered a recommendation: “Let’s not pop the champagne corks just yet.”

That is the steady growth of a small business – Marlin Steel Wire Products – which only six years ago was facing closure. The company is located in a state and city which both have suffered devastating losses. Nearly half of Maryland’s manufacturing jobs vanished over the past three decades; in Baltimore, the drop was 80 per cent. Yet, as reported by Jamie Smith Hopkins in the Baltimore Sun , Marlin Steel Wire Products has bucked the tide, with conspicuous success. The firm has 35 employees, up from 20 five years ago. Its revenues of $4.4 million in 2011 were up 33 per cent from 2008, enough to place it at No 4,112 on the Inc Magazine list of the 5,000 fastest-growing privately owned companies in the United States. The owner, Drew Greenblatt, was hoping for revenue of $5.5 to $6 million for 2012; and, in Ms Hopkins’s view, this was not an implausible expectation. (“Fast-Growing Local Manufacturer? Yes, It Is Possible,” 30 th November). When Mr Greenblatt bought the company, in 1998, it employed 18 people and made wire baskets for bagel shops, then proliferating across the country. Having moved it from Brooklyn, New York, to Baltimore, he was overtaken by events. Chinese factories started selling bagel baskets for less than Marlin could purchase its steel, let alone manufacture its product. Mr Greenblatt told the Sun: “We were haemorrhaging cash.” Then Marlin Steel Wire Products changed course. About four years into its Baltimore phase, a Boeing engineer approached the company with a request for a basket that would hold an airplane part. It would command a much higher price than bagel baskets fetched. According to Mr Greenblatt, the solution to his problems came to him in a mantra-like flash: “quality engineered quick.” Ms Hopkins brought the Marlin story up to date. Taking a company with measuring tools no more high-tech than tape measures – “where plus-or-minus one bagel was a perfectly acceptable variation in basket size” – Mr Greenblatt now sells to customers needing accuracy down to one-4,000 th inch. These days, reported the Sun , the company employs mechanical engineers and skilled craftsmen, and has more than $3.5 million in robotics. ❖ The upward course of Marlin Steel Wire has produced better-paying jobs for its people. When the company was purchased 14 years ago, its workers earned minimum wage with no health benefits. Now, with five per cent of the corporate labour budget going to worker education, annual pay on the factory floor – excluding the degreed engineers – ranges from $30,000 to $80,000. And everyone is eligible for health insurance. In addition to a highly skilled workforce and cutting-edge automation, Drew Greenblatt credits Marlin Steel’s good fortune to a drive to sell far beyond US borders. The company has customers in 36 countries, including China, and its owner claims to relish competition. In 2011 he testified in Congress in support of the US-Korea Free Trade Agreement that would do away with tariffs that add to his costs of selling to his South Korean customers. ❖ Ms Hopkins noted that free-trade deals are always contentious, as are some of the Maryland-specific changes suggested by Mr Greenblatt. But his attitude resonates with the Manufacturers’ Alliance of Maryland, which lobbies for the sector and has seen a blurring of the distinction between small and big manufacturers

Technology

❖ Whether or not Apple Inc manages to convince a dubious American public of its purity of intention in returning “home”, the company can report success on another front.

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Wire & Cable ASIA – March/April 2013