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Economy

Inside Cork, Apple's Controversial European Headquarters

From Apple's headquarters in Cork
From Apple's headquarters in Cork
Alexandre Counis

CORK — On a December morning, as my plane pierces the ceiling of clouds and begins its descent toward the airport of Cork, my eyes are drawn to the flocks of sheep spread across the green fields below. It's hard to imagine but this seemingly rural backdrop in southern Ireland houses the European headquarters of Apple, one the most important American companies in the world.

Cork has made headlines in recent months. Last year, the European Commission ordered Apple to pay 13 billion euros in back taxes to Ireland based on their operations in Cork. Apple employs 6,000 people in the city, and created an estimated 2,500 related jobs. The Commission accused Ireland of illegally helping Apple with tax breaks and denounced Dublin's tax incentives policy.

Why did the Silicon Valley giant choose this city of 130,000, which is routinely hammered by rain, chilly temperatures — even in the summer — and a two-and-a-half hour drive from Dublin.

Brussels thinks the answer is obvious — tax evasion or so-called "fiscal optimization." But there's more to this city from where 3 million people emigrated to the New World in the 19th century. Work in Cork is flexible and the workforce is qualified. There are several nearby universities for Apple to tap into for new recruits. Cork, from where Apple manages all its operations outside of the U.S., therefore offers considerable advantages.

The Holly Hill campus rests on old fields, about 10 minutes by car from the city center. The first thing you notice once you've passed the security gate is the parking lot, which is massive like American shopping malls. At the other end of it, you find the entrance to an ultra-modern building that once used to hold a factory. Behind it, a vast construction site separates the campus from houses.

Apple employs a lot of young people — their average age is about 30 — from 96 different nationalities. *Brian, who joined the company in 2004, is head of logistics. He and his 90-member team are in charge of supplying retailers and Apple stores outside of the U.S. Before Apple releases a new product, he's only told about one aspect — the weight and size of the packaging. His job is to optimize the transport of boxes from factories to the stores where they'll be sold.

"Why do we do it all from Cork? First of all, because most of our transporters are pan-European," Brian explains. "So we have one person that negotiates for the whole of Europe... Also, we want to provide the same service for all clients across Europe."

"Being all together in the same place enables us to make economies of scale and to exchange information on different markets, where tastes often vary greatly," says Lilian, who leads a team of 110 people focused on retail operations.

The city of Cork, twinned with San Francisco since 1984, is Apple's biggest site after Cupertino, the California headquarters. Founder Steve Jobs picked it himself when he decided to expand the company internationally. When Apple established itself in Cork in October 1980, the company was only a start-up created four years earlier, and was just about to enter the stock market. This was its first computer production line outside of the U.S. There were 60 employees in 1980, 170 a year later.

Manufacturing for export was a tax-free activity in Ireland at the time, which explains why the company paid no tax, or almost no tax, until 1991. Then the law changed and Ireland granted Apple the infamous tax ruling the European Commission disapproves of.

The site expanded at first, then shrunk. Jobs, leading the company at a time the company was going through a rough patch, didn't hesitate to cut the local workforce from 2,000 to 600 people in 1998. It was Tim Cook, the current CEO, who was in charge of restructuring production. Mac computers gradually stopped being manufactured in Ireland and the operation was relocated to China. But in the 2000s, Apple bounced back, first with the iPod and later with the iPhone. It was a revival not just for the company, but also for this city.

The legacy of Steve Jobs can still be felt in how everything is centralized. Rather than letting each country decide for itself how to sell Apple products, he wanted to gather all teams in one place so institute the same procedures and make the same demands.

Cork is a way for the American company to be as close as possible to its European customers. Not far from the 1,000 AppleCare employees working from the old printed circuit factory are the 150 people whose job it is to test iPhone, iPad and iMac software, and to adapt them in some 30 languages.

"There are 650,000 words in macOS. But words are on average 30% longer in German than in Englishm and 40-45 % longer in Greek or Hungarian. So we have to reduce the messages in size," explains Dave, an employee who heads the team. Can an emoji be perceived as offensive in a certain market? It's up to Dave and his colleagues to remove it before the product goes on sale.

In an adjoining room, about 20 people test prototypes, especially new iMacs, under Neil's supervision. The idea is to take into account any European specificity since norms can vary from those in the U.S.

Surprisingly perhaps, there's still an iMac assembly plant in Cork. It's actually the only Apple factory in the world, all of the others being owned by subcontractors, including the one that recently opened in the U.S. to manufacture the MacBook Pro. Here, 360 people busy themselves around two lines that produce a total of 140 units per hour. Components come from China and workers assemble them for the European, Middle Eastern and African markets. Two teams work in shifts, each doing 12 hours three days in a row with four days off. And 65% of employees are assigned to quality testing.

Why Cork instead of China? Paul repeats that this helps to "adapt the software" within each product to local markets. Also, he adds, "because given the size of iMacs, assembling them in China and then shipping them from there to European consumers would cost a lot more..." To manufacture dreams, you sometimes have to be down-to-earth.

*Only first names of Apple employees were used

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