Apple cuts Ireland jobs, looks to Asia

Apple will cut 450 of its 1,000 jobs at its plant in Cork, Ireland, after a decision to subcontract production of iMac computers to South Korea's LG Electronics.

Production at the company's plants in Elk Grove, California, and Singapore will be affected as well. In Apple's Elk Grove plant, between 25 and 50 permanent employees and an estimated 300 temporary workers will have their positions eliminated, according to the Sacramento Bee.

The Sunday Business Post of Ireland reported that iMac production would move to an electronics complex planned by LG.

Apple today confirmed that LG's plant would produce iMacs in Wales, while 550 of the current 1,000 staff at the Cork plant would continue to produce the high-end Power Macintosh G3 computers. The move would follow Apple's outsourcing last year of all printed circuit board manufacturing--the electronic guts of a computer--to other companies in a move to improve inventory control.

"I regret the company has indicated that its decision to relocate the production of the iMac was irreversible," said Mary Harney, Ireland's deputy prime minister. "It is a severe blow to the workers and to the Cork community."

In Singapore, NatSteel Electronics, the world's sixth-largest contract manufacturer of electronics products, said its ECS division will distribute Apple's products in Malaysia and Thailand, as well as within its own borders.

Apple will use ECS as a springboard to enter the Malaysian and Thai markets, said Darke M. Sani, Apple's South Asia managing director. "We think there's a lot of room for us to grow in those countries," he said, "and ECS will help us to grow in those markets."

ECS has a network of more than 2,500 dealers in Southeast Asia. NatSteel Electronics makes motherboards for the iMac, and supplies similar products to other Apple computers, executives said. Those orders would be significant for the Singapore company, which relies on Apple for a fifth of its sales.

Asia Pacific and Japan are two markets where Apple could benefit from a boost in presence. Together, the two areas constitute 18 percent of the company's unit sales, compared to 55 percent for the Americas and 27 percent for Europe.

The Asia-Pacific region, in particular, could constitute a ripe opportunity. In the company's first fiscal quarter of 1999, Apple boosted sales 68 percent over the prior quarter and 33 percent on a yearly basis, in spite of a market that shrank the last three months of 1998, according to International Data Corporation.

Apple reached the No. 7 spot on the U.S. list on the popularity of the iMac. Apple reached 4.5 percent market share in the fourth quarter, compared with 3.4 percent in the same period a year ago, and shipments increased 58 percent, far outstripping overall industry growth rates. The last time Apple was in the list of top five computer makers was the third quarter of 1996, according to IDC.

Bloomberg contributed to this report.