DAIL DEBATE

Take Number: ZZ

Next Take Number: AAA

Forum

DÁIL ÉIREANN

Sitting Time

Sitting Date

22:00 (10 o'clock)

9 June 1998

Text:

^ ADJOURNMENT DEBATE. ^

^ Apple Computers, Cork. ^

Mr. Kelleher: I thank Deputy Allen for allowing me the opportunity to speak on this matter and I concur with his comments. We all understand the complexities and competitiveness involved in globalisation and the shifting of business towards cheaper labour markets in the Far East.Section to follow:

Section AAA follows.

Question Numbers:

Take Number: AAA

Next Take Number: BBB

Forum

DÁIL ÉIREANN

Sitting Time

Sitting Date

22:10

9 June 1998

Text:

(Mr. Kelleher)There is great concern in Cork at present. Not only are the temporary workers in Apple concerned as a result of the speculation and rumours, but the fact that no clear statement has been made to date is increasing that concern. If the 500 jobs in Apple Computer are lost, other companies who have contracts with the plant will also suffer and that will have a great impact on Cork City.

I am aware that the Tánaiste has met with representatives of Apple Computer. However, she must use everything in the remit of the Government, her office and IDA Ireland to impress on the people who are due to make these decisions the importance of Apple Computer in the industrial, economic and social life of Cork. We owe a great deal both to the company for providing a huge amount of employment in Cork over many years and to the workforce which has served the company well. It would be most regrettable if the loss of these 500 jobs were announced without every resource available to Government and the various job creation agencies being used to retain them.

The pressures on companies to make profits has resulted in the removal of labour intensive industries to cheaper labour locations in the Far East. However, this development could have a devastating effect not only on the immediate Cork area but in the general economy. That must be recognised, acknowledged and tackled in the future. I wish the Tánaiste and IDA Ireland the best of luck in their efforts to ensure that this speculation is ended.

Ms Harney: I thank Deputy Allen for raising this matter. I also thank Deputy Kelleher for his contribution. My party colleague, Senator Quill, the Minister for Education and Science, Deputy Martin, Deputy Flynn and the Minister of State, Deputy Dan Wallace, have also been in contact with me about this matter over recent days. I share their concern about any threat to the jobs in Cork.

Apple Computer was established in Cork in 1980 to manufacture PCs. This is a highly integrated manufacturing operation which includes purchasing, printed circuit board - PCB - assembly, product assembly and test, localisation and distribution as well as software quality assurance, research and development. Apple has been experiencing problems in the marketplace as a result of competitors providing cheaper comparable products. To meet this challenge it has undertaken major rationalisation by selling plants in the US to SCI, plants in Singapore to NatSteel and closing Appledom in Europe. It made Cork the centre for PCB and relocated the Appledom activity to Hollyhill, Cork.

Apple announced profits of US$47 million for the first quarter of 1998 and revenues of US$1.6 billion. It continues to rationalise its product line and plans to have four major product lines, a reduction from 15. The Powermac G3 is the first of these lines and it has been successfully launched. It helped to make the first quarter profitable. Apple Corporation is also expected to return profits for the second quarter of 1998. It has streamlined its products and structure and it is at present deciding the structure and strategy for this area.

Some months ago Apple announced the total wind-down of its software subsidiary, Claris, with the loss of 100 jobs in Dublin and the intention to transfer some of those activities to Apple in Cork. Throughout the speculation about the future of the Hollyhill operation, successive Governments and IDA Ireland have worked with the company to ensure the survival of the Cork plant. A cloud has hung over the Apple Corporation in Cork since 1992. Like my predecessors, I have taken a keen interest in the operation since I came to office 11 months ago.

Apple is currently reviewing its worldwide operations with a view to taking further action to secure the future of the company. In the context of this review and the public speculation over the last few days, this morning I met senior executives from Apple, Cork. No final decision has been taken, although it is clear that the PCB operation in Cork is one of the areas being examined as part of the worldwide review. In this regard, I am aware that Apple has outsourced this aspect in other locations. Clearly, the main concern has to be for the workers at Hollyhill and their families. The company assured me today that one of its priorities will be to keep its employees fully informed of developments as they arise. The company has informed me that no final decision has been taken. The outcome of the review will become known at about the end of this month. I will continue to work closely with local management and IDA Ireland to ensure the best result for Cork. The aim is to maximise the number of jobs at Cork and to ensure that the jobs there are part of a successful worldwide Apple operation.

I will travel to the United States within the next two weeks to meet the senior vice-president in California who is in charge of the strategy and review for Apple. The workers and management in Apple, Cork can be assured that I will do all I can to maintain as much as possible of the Apple operation at Hollyhill. The Government and the industrial development agencies are committed to doing everything possible to secure maximum employment in the Cork region. This commitment is evident in the fact that more than 4,500 jobs have been announced in the region since this Government came into office.