Apple Inc. announced on Wednesday morning that it would expand its investment in Ireland once again. The firm’s CEO Tim Cook, who was making a visit to the country, revealed that Apple could add as many as 1,000 new direct employees to its rolls on the Atlantic island. Meanwhile a ruling from the European Commission on whether Ireland has been illegally funding Apple is expected to arrive this month.
On Wednesday morning Ireland’s Industrial Development Authority revealed the new hire. CEO of the group said “For any company to be located at the same campus for over 30 years is a remarkable thing – that Apple continues to expand at this rate in 2015 is truly exceptional. The scale of the operation in Hollyhill is vast, with manufacturing, supply chain, AppleCare and shared services operations taking place within one campus.
Tim Cook sweeps Ireland
Tim Cook did more than just announce new jobs in the country, however. He also announced a €1 million Ocean Energy Industry Fund, and was set to collect the Gold medal of Honorary Patronage of the Philosophical Society at Trinity College, University of Dublin.
Mr. Cook also met with the head of the country’s government, Taoiseach Enda Kenny. Mr. Kenny, speaking of the major investment, said “Apple’s plans for new facilities at their Cork campus that can house a further 1,000 jobs is a very welcome boost of confidence in Cork and the South West region. It is also a welcome sign of broadening regional recovery.”
1,000 jobs, particularly of the caliber Apple is likely to offer in its Cork HQ, could mean quite a lot to Ireland’s economy, but it’s likely to mean more to Apple.
The firm is busy has poured huge amounts of money into the country in recent years. In the last year alone, excluding this morning’s reveal, the firm announced a 25 percent increase in its Cork workforce, and the build out of a major new European Data center in Athenry, a small town in the West of Ireland. Apple opened its first operation on the Atlantic island more than 30 years ago.
These investments have coincided with the greater focus that has been put on the firm’s international tax deals in recent years. Rod Hall of JPMorgan reckons that, should the EC ruling go against the firm, it could have to pay as much as $19B in order to settle the case.
An end to the investigation is expected by the end of November, but the final ruling may not matter all that much. Apple is likely to appeal any negative ruling, and it is likely to be a negative ruling given the preliminary findings earlier on this year.
Putting focus on the future at Apple
A $19B payout wouldn’t hurt Apple all that much. What would hurt the firm, however, is a massive rise in its effective tax rate going forward. Apple has a complex series of twists and turns that keep its tax rates low, but a recent windfall in Ireland’s coffers may mean that the firm is changing how those constraints work.
Changing the law in Ireland, as a result of European intervention, could be a major shock to Apple. Wall Street will be waiting on the ruling from the EC in order to gauge how to value the firm going forward.
Mr. Cook’s plan appears to be to continue investment in Ireland despite the chance of a spike in tax rate in the coming months or years. It’s not clear if his firm has a way around that tax should it happen, or what it would mean for Apple’s relationship with Ireland.