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A U.S. Apple factory may be robot city

December 7, 2012 04:06 PM ET

Atkinson said Apple will build a leading facility partly because it's Apple, but also because of the relative high cost of U.S. labor. "You've got to use automation more than you might in China," he said.

"One of the potentially significant things about the Apple announcement is it could send a message to American companies -- you can do this -- you can make this work here," Atkinson said.

Michael Palmer, an IDC analyst who researches electronics manufacturing, said that by having a manufacturing plant in the U.S., Apple will save on shipping costs and shorten the time a product is in inventory.

Palmer also pointed out that labor costs in electronics manufacturing are already relatively low, about 8% of the total manufacturing cost. "It's all about having volume," he said.

In the mid-1990s, Apple did make products in the U.S., and Jim Daly, manufacturing expert, helped to set up one of their plants.

Apple originally built a factory that was highly automated, but it wasn't flexible and couldn't adapt quickly to changing needs. At the time, Daly was working for a contract manufacturer that was hired by Apple, which quickly set up a factory to build two models of the Mac. That plant relied more on labor and less on automation to get its flexibility, he said.

Today, Daly is vice president of manufacturing and operations of Rethink Robotics, which makes robots for manufacturing. These robots are designed to be flexible enough to adapt to fast-changing manufacturing requirements.

But Rethink Robotics also has a story to tell about U.S. manufacturing. Over his career, Daly has set up manufacturing operations in the U.S. and in Asia, and "what we found is there are some really competitive companies here."

Rethink doesn't manufacture or assemble its robots, but works closely with suppliers in the design process and then orchestrates the integration and assembly, Daly said.

"All the plastics, all the metal, the tubing, the gearboxes, the circuit boards are all manufactured in the U.S.," he said. "U.S. supplier quality and efficiency, quite frankly, can be much higher" than in lower-cost overseas regions of the globe, said, Daly said. "Low cost labor hides a lot of sins."

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