Apple's plan to build a new campus in Austin Texas, expected to create up to 3,600 jobs, and credit Apple $21 million over 10 years from the Texas Enterprise Fund and $8.6 million in incentives from the City Council and another $6.4 million from Travis County, is in turmoil.
Apple had been given approval for part of the deal, but it was still awaiting approval of additional incentives from Travis County officials who have between $5.4 million and $6.4 million in real estate related incentives on offer. These deliberations are still on-going, and Apple is reported to be getting frustrated by the delays.
The Statesman reports that Greater Austin Chamber of Commerce senior VP for economic development Dave Porter said that Apple's plans are up in the air. Porter said: "This deal is not done. It remains in peril. And Apple is frustrated."
Porter said: "We were disappointed (the deal) wasn't finalised this past Tuesday, but we were hopeful this next Tuesday that Apple and the county can complete the negotiation process and have that behind us. We remain hopeful that will take place and there will be a positive vote on Tuesday."
Attorney and former Travis County judge Bill Aleshire is less positive. He accused Apple of "rigging" the contract. According to The Statesman, Aleshire said Apple "had it rigged so they could not comply with the contract yet end up with county staff basically renegotiating the terms that they would have to comply with. I just thought that was a major flaw. It showed up in several ways in several places."
The $304 million, 1 million square feet, campus is set to become the company's main Americas Operations Centre. The new 3,600 new jobs will mostly be administrative, help-desk positions. If the deal goes through, Apple will begin construction of new facilities in 2012 with hiring beginning by 2016. The company already employees 3,100 employed at its current North Austin facility.
City Council Member Bill Spelman said the investment will be worth the new jobs, because the city is "six months away from the worst unemployment figure" since officials began tracking it.
News that Apple plans to expand its operations in the US should please those who have criticised the company for building products in China rather than in the US. A report from the CRESC suggested that Apple should lower profit targets and manufacturer in US.
Even US President Barack Obama had pressured Apple over provision of US jobs: when asked why Apple isn't manufacturing the iPhone in the US, Apple's late-CEO Steve Jobs told last February: "Those jobs aren't coming back."
According to a New York Times article, there are a number of reasons why Apple manufacturers abroad. Not only are workers cheaper, but overseas factories offer more flexibility, diligence and industrial skills. The article from last February refers to an example where last minute changes to the iPhone required workers to be woken up in the middle of the night, such a situation would never happen in the US.
Apple recently unveiled a webpage that showcases statistics suggesting the company supports more American workers than has been reported. The company claims it is responsible for a total of 514,000 jobs across all 50 states. Only 47,000 of those workers are employed directly by Apple. Another 257,000 work at companies that provide manufacturing, sales, delivery, and other support to the company. The remaining 210,000 jobs exist in the so-called "app economy" - the host of third-party software developers who create programs for the iPhone and iPad.