In an exclusive interview
with CNBC’s resident stockmonger Jim Cramer, Apple CEO Tim Cook made a proud
announcement: His company will begin to invest $1 billion to create new jobs in
the United States, as opposed to on the other side of the world, where its
iPhones, iPads and laptops are made. Cook will be lauded for this, and yes,
jobs are good. But don’t think for a moment this isn’t about saving Apple a
buck in the long run.
“I’m proud to tell you that
we’re creating an advanced manufacturing fund,” Cook told Cramer from Apple’s
Cupertino, California headquarters. “We’re initially putting $1 billion in the
fund.” This ostensible decision of the heart very clearly became something more
strategic, as Cramer noted that while a billion is a big number, it’s
relatively tiny given Apple’s liquid war chest, which now tops $250
billion in cash. Cook’s reply:”It’s $1 billion of our U.S. money, which we have
to borrow to get, that’s another whole topic.”
Why would a company with $250
billion in cash need to borrow 1/250th of that in order to launch its vaunted
U.S. jobs program? According to Cook, it’s because the company is a victim of
its own success:
If you earn money globally, you
can’t bring it back into the United States unless you pay 35 percent plus your
state tax. And you look at this and you go, ‘This is kind of bizarre.’ You want
people to use this money in the United States to invest more. We are in a good
position, but an unusual one. Our good position is we can borrow. And so to
invest in the United States, we have to borrow. This doesn’t make sense on a
broad basis, and so I think the administration, you saw that they’re really
getting this and want to bring this back and I hope that that comes to pass.”
And there it is. “We have to
borrow” is of course, untrue. The company could repatriate its vast offshore
holdings — which it’s accumulated
deliberately, through years of byzantine
tax-dodging schemes — but would then have to pay taxes to the IRS, which
might bump Apple down from The richest corporation in the history of
capitalism to merely One of the richest corporations in the history
of capitalism. It’s why Cook has contorted himself in recent months,
showing a willingness to collaborate directly with Trump insofar as the
president could
cut Apple a sweet tax repatriation deal (splashy headlines about
domestic job creation will help, too). Asked if Cook’s relationship with the
White House is one of “give and take,” despite the fact that Trump’s
administration has a clear disdain for a large swath of Apple’s employees, the
privacy of people who use his phones, and even
Cook’s identity as a gay man, his reply is pretty straightforward:
“You
know, again, I think with each administration in every country in the world,
there are things you disagree and things you agree, and you look to find common
ground and try to influence the things you don’t.”
In other words: Cook’s
Apple will hold its nose and play nice as long as it takes in order to bring
home its billions.
No comments:
Post a Comment