Jobs axe set to fall on Cork plant after iMac triumph

Unlike other giants of the computer industry which have established facilities here recently, Apple Computers, has a longer history in Ireland, dating back to 1980. Despite having roots in Ireland for almost two decades, the company has always been subject to the volatility of the international computer market.

Next week, workers will find out that while the volatility has abated, other considerations - like labour costs - have become crucial.

Like Fruit of the Loom, which has been moving part of its operations to Morocco, Apple seems to have decided that the computer which saved the Cork plant, the iMac, can be produced elsewhere at a lower cost. Apple is planning to introduce five new coloured versions of the iMac and expects orders to increase rapidly in the next few years. As a result it needs larger volumes of the computer produced either in Europe or at some low-cost location elsewhere, according to sources.

It is no exaggeration to say that some jobs in Cork look like becoming a victim of the iMac's success, as the company seeks to get the maximum benefit from rising sales by upping production and reducing costs. The indications are that up to 500 jobs could go, of which around 400 are temporary staff.

Apple originally chose to establish its European manufacturing facility in Cork because of the low rate of corporation tax, the skilled English-speaking workforce and a factory ready for occupation. At that time labour cost comparisons did not seem a major priority.

The location of the plant in Hollyhill was welcomed by the Government of the time, as it was then a serious unemployment blackspot.

Internationally Apple was highly successful in the early 1980s and it soon became one of the largest employers in the city.

However, in the mid 1980s the company lost significant market share to new arrivals, which produced clones of the IBM personal computer. The founder and chief executive of the company, Mr Steve Jobs, was ousted during this period, although he was to return several years later.

A series of poor financial figures put all parts of Apple's operations under pressure and Cork was no exception. The idea of shifting production from high labour cost locations in Europe to low cost states soon emerged.

In 1992 the company indicated that it was thinking about relocating the printed circuit board (PCB) unit at Cork to the Far East. The 400 jobs in the division were saved when the company decided against the move on the basis that production savings would be eroded by the cost of getting the product back to the European market.

In return for retaining the jobs workers and their union representatives agreed with the company to make concessions in areas like transport subsidies and medical schemes.

However, the problems for the printed circuit board operation were not over. In 1997 there was more talk about the PCB facility being shut down, but it turned out that two PCB facilities in Sacramento and Singapore were to go instead. It was another short-lived reprieve.

At almost the same time last year the company announced that its Claris subsidiary in Dublin was closing with the loss of 125 jobs, once again as part of a "global restructuring". It was during this closure that Mr Jobs was labelled "Steve No-Jobs" by some workers.

In June of last year the PCB unit was under threat again with rumours that it was to be moved to Singapore. The Tanaiste, Ms Harney travelled to Apple's headquarters to meet management. In July some 150 full-time jobs went and 400 temporary jobs were lost when the PCB unit was closed.

Apple's senior vice president for world operations, Mr Tim Cook, said at the time that the closure was to be regretted, but he added that the iMac could provide future growth at the plant. This will not now happen and once again staff are facing an uncertain few days.

Also facing uncertainty are the local companies who work with Apple, either supplying parts or carrying out contracting work on the premises. Last year it was estimated that Apple spends about £120 million in the Irish economy, which translates as an additional 2,500 jobs.

Of course as IDA Ireland pointed out last night - not all is lost. The hugely successful G3 Power Mac will continue to be produced in Cork and other products will come on line. Apple has invested a lot of money in the Cork plant and many sources said this is one reason why it will remain a substantial employer in Cork for the long term.