Apple Computer Corp is set to award a $10bn contract to LG Electronics to manufacture iMacs, according to Asian press reports. The reports, partly confirmed by LG, suggest that the group will make two million iMacs this year valued at $1.7bn. The contract is over five years. LG already manufactures computer monitors and cases for Apple. The iMacs would be made at South Korean, Mexican and British plants. A major outsourcing contract such as the Apple deal would be welcome news for LG Electronics which may face extensive jobs cuts as a result of South Korean government’s efforts to restructure its five major conglomerates. However, the deal could be bad news for Singapore’s NatSteel Electronics, which has a component supply deal with Apple. The company’s shares have fluctuated this week over fears that it may lose the business. Earlier this week we reported that Apple was outsourcing production of iMacs to LG’s plant in Newport, Wales, resulting the loss of 450 jobs at its Southern Ireland plant (CI No 3,590). There have also been suggestions of minor job cuts at Apple’s Singapore and Sacramento, California manufacturing plants. Apple was unavailable for comment on the possibility of an LG deal or further jobs cuts.
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