Will tariffs bring back manufacturing to America? Here's a deeper look at impact, challenges we face
OAKLAND, Calif. (KGO) -- We know tariffs will rattle your world. Let's take it one garment at a time.
Let's take a jacket made in Vietnam. President Donald Trump has proposed imposing a 46% tariff on that country.
"If that jacket were $100, it would be at least $46 more," explained Lance Hastings of the California Manufacturers and Technology Association.
Note the emphasis on the term, "at least," because there is always a retail markup.
Now let's take a look at those items that we just can't live without, like the iPhone. What if all the parts were made and assembled in America?
Everyone is betting the price would be untenable for some consumers.
"I think 90% is a reasonable number, almost double," predicted Stephen Levy of the Center for Continuing Study of the California Economy.
Let's take the Apple Watch, the display is made in South Korea and Japan. The processor and sensors in the U.S., Taiwan and Europe. The Lithium-Ion battery in China.
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Cheaper labor costs are what keeps prices within reach, but that's not what worries many tech and manufacturing companies here in America.
China which makes 70% of what goes into an iPhone, uses highly-skilled labor.
"Our big limiter here is the workforce. We just haven't been training people for these roles," said Adam Balogh who runs Laney College's Machine Technology Center.
But that's not the message the White House is sending. A reporter asked if President Trump really believes the kind of labor can be transferred to the U.S.
"Absolutely, he believes we have the labor, we have the workforce, we have the resources to do it," insisted White House Press Secretary, Karoline Leavitt.
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But in a recent interview, Apple's CEO stated that America's workforce lacks certain critical skills.
Tim Cook said, "In the U.S. you could have a meeting of tooling engineers and I'm not sure we could fill a room. In China, you could fill multiple football fields."
What does a tooling engineer do?
"So that is a specialized type of machinist who would actually take raw materials and make the jigs, fixtures according to the engineer's design," explained Balogh.
Let's simplify that. He showed us a 5 Axis laser cutting machine which has a tooling device to specifically help rotate the raw material used to design an object, in this case, this Baby Yoda.
"So all those little wrinkles are put in there just with very small cuts with a very small tool following this complex path and this is only possible because we can orient the part at many different angles," added Balogh.
A somewhat similar process applies to the iPhone.
"At every stage of this, there's tooling that needs to be designed," he said.
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How did America lose its grip on manufacturing?
Since the 1970s and 80s, American companies have been outsourcing manufacturing to other countries.
And don't deny it, for the most part, we have all benefited from it.
"And it did take close to 50 years for those jobs to offshore and it would take decades to offshore at the scale that we need to keep up with the American consumer habits," Hastings reminded us.
"We don't have the institutions to train the people in trade at the numbers we need," warned Levy.
If America wants to hit the reset button, community colleges will be essential in reviving U.S. manufacturing.
Laney College in Oakland is one of a handful of colleges with a Machine Technology Department.
My students are starting, entry level at $30 an hour.
Let's pause there, that's a little more than $62,000 a year. That's the starting salary for an Oakland teacher who graduated with a 4-year college degree.
"And you can top out at right around $60, $65 an hour, it depends a lot on which sub-segment of the industry you're in," he told us.
"We would need to increase our capacity but we would also need to build more training facilities and we would need to get people, not just at the community college level, once they've gone through high school, we need to introduce students in middle school and high school to manufacturing, to robotics at a very, very early stage," said Balogh.
