this week, made in america, manufacturing returns to the united states, but will americans actually benefit? electronics ceo mike mcnamara as we sit down for a wide-ranging conversation about factories, automation and the chinese. later, self-made billionaire robert pera, ceo of ubiquiti networks. this week on "press here." good morning, i'm scott mcgrew, you will recall in san francisco, apple recently announced a new mcintosh.

>> it is a stunning product. this is the future of the pro desk top. >> apple also announced the unusual looking black cylinder cal computer will be built in america by americans. it may surprise to you to hear american manufacturing has been growing for years now. flextronics, the second largest manufacturer has three facilities in silicon valley, as well as texas, minnesota, tennessee. both carolinas and kentucky and georgia. as ceo mike mcnamara is in charge of all of those factories and as well as 45 in china, 15 in india and 5 in poland. i could go on and on. flextronics has more employees than the united states has marines. which is fairly impressive. joined by john schwartz of usa

today and lina roul. list off for me what you make. what's in my house that you actually make? >> in your house, probably chargers. there's hp printers we make right here in your office, thinks like zeer ox copier. >> xbox. >> any electronics products, whether in the consumer tree, the medical industry, telecom, date datacom, a wide variety. i mentioned the new mac, will you be making the new mac? someone in america is going to be making the new mac, is it you? >> that's what mr. cook says that someone will be making it. we don't talk about our customers and customer's operating strategies so i'll just have -- >> you're not the first ceo to smile own not say anything. >> that's a question for mr. cook. >> when we'll have him on and ask him that very question. >> i'm curious, sorry, john, i'm

curious what does manufacturing in the u.s. from the tech companies, google, apple, what does that have -- what effect does that have on amazon and these other producers here? are we going to see everyone try to manufacturer one of their gadget here? >> i think economics have to be right to manufacturer in the united states. people manufacturer in the united states in the united states for different reasons. some may want to protect the i.d. and get to it quickly or very it's a short product life cycle. there's a lot of different reasons someone would manufacture here. amazon on average is more a distributor and distributor of many products. >> do you make the kindle? >> again, i don't -- >> boy, you're easy. i'm going to play poker with you. >> there are some customers that

like their operating strategy to be known but we have about 1,000 customers across these different industries and i'd say on average, 90% of them don't want to talk about their operating strategies and want the customers to focus on products and focus on the technical inspects. >> i know john was joking, but are the economics changing on a macro level, that we could hope for more american manufacturing, something bigger, more than the criteria you mentioned? >> i think it's a broad cross section of things. i don't think it's one thing. i don't think it can be one thing. running and designing a supply chain that has to meet your customer's needs is complicated. there's freight and product life cycles and where the end demand is and how rapidly you have to respond to the demand and how da carefully you have to associate the ip, where your supply base is located and what the cost of labor is. there's so many different

attributes you have to contemplate. what you're seeing when people talk about made in usa and what you're seeing is a change in that cumulative dynamic. the states are getting more aggressive at providing incentives and labor costs in emerging markets are going up. product life cycles, all of the things i mentioned. if you put them all together, you get a little tilt towards made in the usa. >> he teased us, how many u.s. marines are there? >> about 200,000. >> about 200,000. >> my question is an offshoot of what scott was asking about. what change in terms of american manufacturing jobs and one of the things to ask you about, google, they unveiled the q and one of the big selling points -- >> it was a cell phone. >> it is the home entertainment -- >> that's right. >> they talked you about how it was made in the u.s. now i see this apple ad saying

designed in california though it doesn't say made in u.s. maybe that changes with the mac proadd. is there pressure with the tech companies to have more manufacturing jobs here an are they pressuring one another? >> i think they all would like to have more jobs here. i think there's more of a nationalist movement there's been in the past and governments everywhere in the world are fighting for those jobs because very often the economies are down and manufacturing generates a lot of jobs. it's not just united states trying to find ways to bring jobs back. and you know as relates to the comment about google or whoever it is, what you're seeing is a lot of innovation in silicon valley. some of these products want to keep close to home. they want the design -- the whole notion to consumption cycles to be tighter. >> that's interesting because design is so -- mentioned it might be built in texas so --

>> mike, you said more than once, protecting your ip, keeping it onsthor. i assume we're not going to name the country that we're worried about. if i say i want you to manufacture this device for me and you choose to do it in that country, are you saying that my ip would be somehow in danger? i want to stay within the flextronics building? >> it's something people think about. what i think what's more driving is the innovation of the consumption cycle. because of the companies you just mentioned like the google q an example. it was a super innovative product and they want to get to market quickly and kind of fast way to do that as you have your design engineers locate as close to possible as manufacturing engineers which is close to possible as your market. i think it's more. there's a real trend toward more disruptive technologies and innovation. you see that in silicon valley when you see companies like -- >> become more innovative and

specific and complicated and that puts more pressure on having manufacturing or distribution nearby you would think. >> exactly. i think probably what we're seeing, silicon valley is becoming the consumer electronics capital of the world and it is built on disruptive product technologies. >> what does manufacturing in the u.s. mean for startups coming out? from startups, from the small companies maker bok bought printing to expand more wearables. what's your perspective? >> i think they are great examples. if you think of the wearables industry, the amount of electronics that may be going into clothing or shoes is going to be -- we think it's going to go through the roof over time. >> i didn't know that term. when you say wearables, you're talking about things you wear? >> like the nike fuel band.

>> continue. i always feel if i'm confused there's someone else confused as well. >> whether it's the nike fuel band, giving you information about steps and calories or just the amount of energy consumption you're doing, you're going to em bed electronics into clothes and you see it in nike shoes. a lot of changes it's going to create is significant. in the past shoes might have been built in some factory in asia, and people stitching tonight canvas and leather maybe overtime you'll see more automation that occurs and more electronics in the product. it will change how things are manufactured. >> the ceo of flextronics, we'll come back and continue the interview. "press here" will be back in just a moment.

welcome back, we're talking with mike mcnamara, ceo, the second largest electronics manufacturing in the world i assume the largest is boxcom. >> correct. >> you have 45 companies in china and you are similar to x foxcon. why don't you get negative press? what is it you're doing that fox con isn't? where's the difference there? >> there's a huge difference in terms of their company strategy and our company strategy. our company strategy is to be a worldwide supply chains company. >> i'm sure there's is too. >> i think they are more interested again, i don't want to talk -- >> you don't run fox con but as you understand, you are two similar companies doing similar starts -- you both make computery things and do it in china. fox con has a lot of trouble with the press and a lot of

trouble with manufacturers and you don't. >> yeah, again, i view us as a worldwide company. once you get outside of china, we're the strongest and largest and we create supply chains for every company in the world wherever they build or wherever they are located. foxcon has most work centered in china. that's one major difference. we spend a lot of time working with our corporate social and environmental responsibility programs. last week we were picked by ford as winning the corporate and social responsibility award for all of ford motor company suppliers, it's a huge pat on the back for the work we've been doing. we've been doing this work for ten years. we want our people to work in factories they can be proud of. we want them to be motivated and we think motivated had the employees build great products. i think that focus is a huge priority for us and something that really sets us apart. >> as manufacturing returns to

the u.s., how much of it will be ought mated? we keep hearing about robotics. is that going to play for of a role? >> more and more of a role but you can't flip a switch. when it comes to ougautomation, spend more time every year. you have to have the robots get smaller and quicker and better software, lower costs and design automation into your products. whether you design it for low cost labor or automation, those are two types you have to go through. there's got to be an evolution into better robotics and at the same time -- >> you said smaller, faster, better cheaper. that's what we do here. if you want to make a prediction, all four will happen. >> i would absolutely agree. what you're going to see is more and more automation over time and that will create the opportunity to have things more regionally manufactured. >> by robots? >> by automation, whether it's a

robot or -- >> tomato, tomato mike. the essential question is good news, we're going to build it in america. bad news, nobody is actually building it, it's robots. >> still bringing jobs, right. >> which makes total sense. >> think about, speaking of foxcon, the robotics, you have to design them and build them and write software for them and install them and maintain them. there's a lot of work to be done. >> that's year away, slow progress. i wanted to bring it up. don't want to cause you grief, a little bit with the robots. >> think of it as a journey. we're hiring rapidly for automation so it's -- >> in real future, i mean, is being in charge of the robots. not a bad job to have. there's a bloomberg report that talked about trusted partners

with the nsa, that the nsa would ask for schematics, have you approached by the nsa? >> no, never. these aren't our products, our customer's products. if they ever approached us we would tell them -- >> you make a lot of communications equipment. >> we do. >> but never approached by the nsa? >> not to my knowledge. if it is it's a super secret program i didn't know about. >> we have time for one more question. >> i'm curious about -- you mentioned the go to market strategy, that's a reason why some companies are manufacturing here in the u.s. how much time would that save for them to get into retailers and such? >> each product is a little bit different but it depends how complicated the product is. sometimes a design cycle may take six months. if you're flying back and forth to bring it up, it takes a lot of time. other times it might be a smoother more predictable

process. it's all different depending on the products but it definitely helps. there's one other things that's important, what this concept that we talked about, flextronics -- so quickly because not successful within a couple of days, everybody knows it. what that does is creates demand uncertainty where very different than in the past. you need the right inventory and location. if something goes wrong with that product or right with the product, you want to have the right inventory and right location. that lends itself to a more regional manufacturing approach which is helpful for a made in the usa program. >> mike mcnam ar ra, thanks for being with us. self-made billionaire, robert pera, when "press here" continues.

welcome back to "press here." i have a little bit of a hard time wrapping my head around the next guest's life story. robert pera worked as an engineer at apple and quick to start his own company. the new company was so successful, pera became one of the youngest billionaires in the united states. he did it making some of the very same equipment made by cisco and other companies much bigger than us. robert pera owns the memphis grizzlies and by several press accounts lives in a two bedroom apartment. do you really live in a two bedroom apartment? >> yes, that's the truth. >> and you're valuation has wildly moved all over the place. there's been lots of speculation. you are or have been a

billionaire. >> yeah, i try not to pay attention to the short term movements of stock. >> you and me and mike mcnamara playing poker, you bring the stakes. max drives an old honda. it's not about the money. >> i don't do it to come off as a guy not cool and doesn't have kids -- >> ever accuse you of this. >> more of a convenience thing. i'm at a point where i try to the make the most use of my time. i want to live ten minutes from the office and i spend most time in the office working. >> good on you. explain the question i introduced. you work as an engineer at apple and go out and build something, communications equipment. it wouldn't be inconceivable that apple could have built or cisco but you do. how did they miss what it is you

do so well? >> i started much at a simple start. i started making very module design myself, very small market and evolved the company, changed it from a hard wear manufacturer and it took a lot of different steps to get to that point. the end result and vision you see now it took a long time to get there. >> long time overnight success. >> when your company, you went public around the same time as all of these other consumer companies. you've got groupon and facebook and zinga that got a lot of hype. noticeably you weren't involved in that hype. your company was not. was that a good thing or bad thing for you? >> well, i try boot strap my company, $30,000 between credit card and saves.

at the time of ipo, only had 92 employees, which is very unusual for a company on pace to do $100 million in that income. i didn't do any pr or ir, i didn't really know what i had. i just was an engineer, hands on engineer, built a team on hand on engineering and no marketing and no sales. we didn't do a lot of relationships and sold in really obscure emerging markets is what we do is bring connectivity to unconnected people of the world. those markets are under the radar. i didn't -- the company itself didn't do any pr and even though we ship millions of device, we're so far under the radar that we were kind of a hidden company. >> i'll ask you an nba question first -- >> a tech reporter but loves sports. >> ask away. >> we tape on thursday. tonight's game between the spurs and heat. the share will be aired on sunday. whose going to win tonight so we can see whether you're right or wrong on sunday?

>> i have to go with the heat just simply because the series has been so exhausting mentally and physically and the heat have the youth. >> now for my awkward transition into something totally unrelated. you have no sales and marketing people. can you explain the model? somebody from your company explained it to me before. but you have no sales and marketing and still have a lot of stuff competing -- >> i'd break it down into three key pieces that makes our business model work. it's a unique business model that people don't understand. the first is we're an r and d power house. we have 170 employees and engineers, what i do, i recruit and build engineering teams and define great product opportunities. second thing we disrupt on economics. we don't come in the markets at 20%, 30% less cost. we go at markets one tenth of the cost people to become operators with as little as $50,

$60 in the pocket. they become big operators with tens and thousands of subscribers. the third thing we do, we have this great idea of a community. we have an online forum where all customers interact and self-support each other and interact with r and d engineers. those three things together are powerful and it gives this ee advantage lix and scaleable effects of business. >> quick follow-up. any of your competitors or companies in the same space adapting or adopting some of your strategy? kind of like a me too. >> i haven't really seen it yet. you have western companies which get the r and d right and understand the markets and starting to do community based sales. mainly on the software side not the hardware side like we do. but they don't have the cost disruption of the then you have the asian companies that do have the economics to cost disrupt markets but don't understand the customers and don't really

understand r and d and software and cohesive hardware software and great user experiences. >> wall street busted you about how you were able to create distributors that were able to sell a lot. that you book the sale with the distributor not when it goes to the final customer. got that right? >> yeah, so, all of our distribution channel is being grass roots and almost like a third party logistics system in a sense. we have great command. all of our products pulled and so our distributors start usually from like a garage or apartment like i did and they've grown with the company. a lot of guys -- >> we're talking about people in small -- >> africa -- no one is selling them out of the back of their cars. >> they don't have the level of sophistication like big distributors like amazon or best buy does. it's very difficult for us to recognize sell through. but we've changed our operations and improved it dramatically.

we've created inventory buffer warehouses and we've tightened up credit policies. what we have now is although we do recognize revenue by sell-in, we have something now, i believe that correlates very tightly with actual demand. >> robert, i asked this question of mike, have you ever been approached by the nsa, bloomberg says that national security agency demands schematics of communications equipment. >> nope. >> fair enough. >> that's exactly what mike said as well. >> can i ask about basketball. why basketball? what's the fascination. >> first of all, basketball has been my favorite sport growing up. i played it and been a nba fanatic. i had courtside season tickets for a few seasons. there's a personal interest. but another thing is the nba, i believe the nba is an international sport of the future. it's so well tightly engrained

in youth culture and fashion and when i travel the world with on business, i've seen basketball courts popping up in china and india and south america. i believe nba is a fantastic investment. >> david stern wants to expand over seas, the commissioner. where do you think first team would be? i heard london, china. realistically do you think that's something within five years? >> i think -- i think western europe might be possible. they have to figure out the traveling and the logistics. so that the players -- there's not a huge time difference making road games. i don't know, when you have those strat os fear supersonic jets made -- >> all over the world in 50 years. >> i have to leave it here. your prediction the heat will win thursday night and this will

run sunday and we'll find out if you're right. >> thanks for having me. >> "press here" will be back in just a second.

my thanks to my guests. thank you for making us part of your sunday morning.

welcome to "comunidad del valle ", the director of the mexican museum. this is your comunidad del valle." >> it's the 21st century solution, thousands of dollars to bay area non-profits. my colleague with brendy brown with the opportunity fund, a recipient of one of these grants. welcome to the show. >> thank you. >>