Apple confirms: Mac Pro being built in Austin
Dec 19, 2013
Austin American Statesman
It’s official — Apple Inc. is manufacturing its next-generation desktop computer in Austin. Apple CEO Tim Cook took to Twitter on Wednesday and confirmed what was already widely assumed — that the company’s new Mac Pro computers would be built at the Flextronics Americas factory in Northwest Austin.
“We have begun manufacturing the Mac Pro in Austin,” Cook tweeted. “It’s the most powerful Mac ever. Orders start tomorrow.”
And Gov. Rick Perry tweeted back: “Congrats & proud you chose TX!”
While not unexpected, Cook’s announcement further solidified Central Texas’ status as one of Apple’s primary hubs outside Silicon Valley. The heart of the company remains in Cupertino, Calif. But by locating Mac Pro production in Austin, Apple has established a direct or near-direct role in almost 5,000 current Central Texas jobs — and could expand that to as many as 8,700 over the next decade.
“You look at all that and it’s pretty nice as an off-Broadway venue as compared to Silicon Valley. You might get some first-run plays,” said Roger Kay, technology analyst and president of Endpoint Technologies Associates Inc.
According to reports published in June, Apple employs about 16,000 people at its headquarters in Cupertino, Calif., and expects to add another 7,400 workers there by 2016. It has about 80,000 employees worldwide, according to its annual report.
An Apple spokesman declined additional comment on the announcement.
Dell Inc. remains the top private employer in the Austin area, with about 14,000 employees in Central Texas and more than 100,000 worldwide. IBM Corp. employs about 6,000 people at its Austin offices.
“It’s not Round Rock and the (14,000) people there,” Kay said of Apple’s workforce in Austin, “but it puts them in the same magnitude as Dell” and the area’s other top technology companies.
Most of the local Apple-related jobs will reside at the company’s new Americas Operations Center — a $282 million campus with seven new buildings and at least 1 million square feet of office space in Northwest Austin. Workers there will oversee much of the company’s marketing, customer support, sales and logistics operations for the Americas region.
Apple already employs 4,000 workers in Central Texas, and it could expand that to as many as 7,000 employees over the next decade.
In addition to the direct Apple employees, Flextronics’ production of the Mac Pro could generate another 1,700 jobs if all goes to plan, according to a presentation the Singapore-based company filed with Travis County officials in October.
In an application to designate its Austin factories as a foreign trade zone, Flextronics said it would hire 879 people for a “next-generation desktop computer” project. If the project hit peak targets, the company said, it could hire as many as 815 more workers here.
Flextronics noted it already employed about 2,500 people at its various Austin facilities and, according to building permits, has spent well north of $50 million to renovate and upgrade its Northwest Austin factory, in part for the new Mac Pro production lines.
“What’s exciting about this (Mac Pro) opportunity is, it’s going to allow individuals that don’t have a four-year college degree to earn a good wage,” said Dave Porter, senior vice president for economic development at the Greater Austin Chamber of Commerce.
According to its applications for tax incentives, Apple said the average wage for its new jobs will be $54,000 a year for the first year of the expansion, and up to $73,500 by year 10.
“I haven’t been told specifically the average wage” for the Mac Pro production jobs, Porter said, “but I know it’s fairly significant for manufacturing jobs in this area.”
According to data from the U.S. Bureau of Labor Statistics, production jobs in the Austin metro area pay an average of $15.85 an hour.
From Austin’s perspective, Flextronics’ expansion will help shore up the supply of jobs that traditionally support a middle-class lifestyle. Central Texas has seen a boom in high-wage jobs and, largely as a natural result of its population growth, a lot of low-wage services jobs as well.
The jobs in between are generally harder to attract and build, although Austin and Texas have avoided the deep hollowing out of the middle tier that has plagued many parts of the country.
From Apple’s perspective, siting its production in close proximity to the hub of its Americas operations could help generate some efficiencies. While U.S. manufacturing probably will not return to its past glory days, a minor renaissance has occurred as the benefits of keeping design, production and other activities in close proximity has outweighed some of the labor cost benefits of manufacturing in developing countries.
“With a company like Flextronics here in town with such a big presence, that was a bonus,” Porter said. “To have it fairly close to their campus is another bonus.”