Conference 7.286::digital

    
    
Subj:	AMO, ABO Operations to be phased out.......


    
 Worldwide News                                              LIVE WIRE

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 Operations to be phased out at Albuquerque, ...             Date: 08-Jul-1994

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              Operations to be phased out at Albuquerque, Chihuahua  

                           manufacturing plants 

 

         Digital said today that it intends to phase out operations at 

   its Albuquerque, N.M. and Chihuahua, Mexico manufacturing plants. 

         The Albuquerque plant, which began operations in 1976, 

   currently employs approximately 440 people who assemble, test and 

   integrate computer systems, as well as perform order consolidation 

   and shipping.  The Chihuahua plant, which opened in 1986, currently 

   employs approximately 630 people who assemble and test computer 

   modules.

         In addition, Digital employs 85 people in sales and services 

   functions in Albuquerque, and about 185 people in sales and services 

   functions in Santurce, Guadalajara, Mexico City and Garza.  These people 

   will not be affected by this closing.

         The manufacturing work done at the facilities will be consolidated 

   within existing Digital plants, primarily in North America.  The 

   workforce will be gradually reduced over the next six months.  The 

   phase-out process is expected to be complete by January 1995.

         Employees learned details of the phase-out process in group 

   meetings at the two facilities.  Digital will offer the affected 

   employees a number of benefits including a financial support package 

   based on years of service to the corporation; continuation of medical, 

   dental and life insurance for a specified period; and outplacement 

   assistance.

         Dan Jennings, Digital's vice president of Worldwide Manufacturing, 

   said, "Digital's strategic redirection program is designed to strengthen 

   our competitive position in core markets to resume profitable growth. 

   That competitive position is much enhanced by the manufacturing function 

   making the most efficient use of our existing capacity.  Over the years, 

   the people in our Albuquerque and Chihuahua facilities have made 

   significant contributions to Digital's success.  It was very difficult 

   to make this decision to close the plants, but the company's commitment 

   to return to profitable growth makes this consolidation of North 

   American manufacturing resources necessary."

         The disposition of the sites has not yet been determined.  The 

   Albuquerque site is owned by Digital and the Chihuahua site is leased. 

   The corporation will work with country, state and local governments, 

   as well as outside agencies, to find external productive uses for 

   the plants.

         Digital has other manufacturing plants in Augusta, Maine; Ayr 

   and South Queensferry, Scotland; Batam, Indonesia; Colorado Springs, 

   Colo.; Hudson and Shrewsbury, Mass.; Kanata, Ontario, Canada; Penang, 

   Malaysia; Salem, N.H.; Singapore; and Tachi, Taiwan.


    

Can someone identify the types of products that are manufactured at the
remaining plants (i.e., silicon, networking, PCs, etc.)?  

>   Digital has other manufacturing plants in Augusta, Maine; Ayr 
>
  and South Queensferry, Scotland; Batam, Indonesia; Colorado Springs, 
>
  Colo.; Hudson and Shrewsbury, Mass.; Kanata, Ontario, Canada; Penang, 
>
  Malaysia; Salem, N.H.; Singapore; and Tachi, Taiwan.

RE: .0  You think you got caught "off guard"?

I'm in ABO and since last week, I've felt that somethings were amiss in the plant.  What
especially flames our coals is the fact that soooooooooo much money has been invested in
remodeling this facility and especially the Chihuahua plant, their floor space has been
doubled!!

We are still asking, "Why us?"  The press release does very little to confirm the logic
behind the decision.

At least Money mag, or was it the WSJournal, has rated Albuquerque the #1 boom town of the
90's.  Intel in town is hiring and so is Sumitomo (recently moved in from Japan).

Soon to be ex-DECster,

Anthony

    I know some of the products made at the various plants. Augusta does
    networking products; Ayr does networking and PC products; Kanata does
    PC products; Colorado Springs and Shrewsbury do storage products;
    Hudson does chips; and Taiwan does some low-end networking products and
    some PC products.  I'm sure they do more than that, but those are the
    products that I know of.

	I helped with the plant startup in Chihuahua (MIS dept). At the time
	Mexico laws were pretty stringent about not selling manufactured
	goods that were not produced in the country (high tech only? not sure).
	This was one of the main reasons for starting the plant, which was
	initially an assembly process.

	Could NAFTA be one of the reasons they can afford to close?

	- John 

    If I remember correctly Salem (NIO) does CSS and refurbished equipment.
    It always a mfg site even when I worked there 5+ years ago.

>	I helped with the plant startup in Chihuahua (MIS dept). At the time
>	Mexico laws were pretty stringent about not selling manufactured
>	goods that were not produced in the country (high tech only? not sure).

>	Could NAFTA be one of the reasons they can afford to close?

  One of the arguments used by proponents of NAFTA was that it would require
Mexico to repeal the laws requiring mfd goods sold in Mexico to be final-
assembled in Mexico, and that would result in some U.S.-owned mfg operations 
being moved from Mexico to the U.S.  This MAY be happening with the Chihuahua
plant closing. Or some or all of the operation may move to another non-U.S.
country(ies).
  Not many DIgital mfg plants left in the U.S.  Salem, NH is still classified
as a mfg plant but most of the space is non-mfg, right?

>    If I remember correctly Salem (NIO) does CSS and refurbished equipment.
>    It always a mfg site even when I worked there 5+ years ago.

           Yep, and FS repairs 'till end of Q1 (being outsourced).  Also
           do some module build, power supply build, PC integration (3rd
           party), VIS, Laptop repairs and other "stuff".  We'll need the
           work come September.
           
           Steve

    NIO, Salem was hit with big layoffs just recently.
    
    

    -2
    
    If NIO is still around.  Big ?
    
    Looks like we, storage, are off to the big "Q".....Better times ahead!

ASO does more then networking. We're big in contract manufacturing and we're 
also doing things like the motion video boards for PC's etc.

Hopefully since we're almost the last one left, we will be left

dave

    
    	re: .9
    
    	"...we'll need the work come September..."
    
    	Remember, that these days, it's a very transititory being.....
    	/john (in ABO)

    	I believe the number of cuts in NIO for CSS (main plant occupant) was 
    ~75. This does not include temps or other groups renting space in NIO. I 
    knew a couple of the people in CSS that got cut and some were caught by 
    surprise. They were not TFSO'd for lack of work. Many were working long 
    hours right up until the time they were cut.

    	I can't make much sense out of this last cut (but then, nobody ever
    asked for my opinion ;-). It almost seemed as though it was a peanut-
    butter approach to head count reduction. Somehow, people in critical
    positions got cut in NIO leaving others that relied on them wondering 
    how a particular required function would take place. The cuts are 
    coming closer to the bone.

    	Clearly, more and more temporary (contract) workers are being used 
    in manufacturing which allows the company to be more dynamic with its 
    manpower on hand at any given moment. Manufacturing still sees the
    typical workload peaks and valleys it has historically seen, so a
    flexible work force is desirable in this area.

    	I also know people in ABO and the sentiments expressed earlier
    seemed accurate in reference to Mexico (i.e. "they were just starting 
    to get better"). Perhaps it was too little too late. Prior to this, I 
    heard of some significant start-up problems in Mexico. The closing could 
    be a delayed reaction to the startup problems, but that's just a guess.

    	With the module repair business either sold, or being sold, that
    would seem to leave nearly a whole core (1/4 of the building) available
    in NIO for the ABO Alpha and workstation line, which I believe is what
    is being transferred to NIO.

    	One other casual observation is that business in supposedly booming
    in the ABO area. Intel was reported to be hiring 2400 people and there 
    were other large and small companies locating/hiring there.

    	What this means to me is that not only is it less of an economic
    impact to the area (vs. closing say NIO), current conditions would seem 
    to boost the real-estate value and salability of the ABO building/property.

    	Just as a general statement, the biggest single factor I see
    resulting in much of the negativity in here is lack of communication
    around reasons behind actions that make no sense to us. As much as I'd 
    like to know what's going on, I realize that the business of returning 
    the company to profitability takes precedence. 

    	The hard truth is we're all in it for the money. Unfortunately, when 
    the money (profit) is not there, it's just human nature to second guess 
    and sometimes speculate the worst. I just hope the the negativity does
    not become a self-fulfilling prophesy.

    	Ray

    BTW - Frustration is a result of reality not matching what one thinks it 
    should be. 

     Some ABO background.

     When the downsizing first began we were assured that we had minimum
     to fret due to two strong factors:
     
        -  Our low cost-to-manufacturing of $15/ft� compared
           favorably to $40/ft� typical of plants on east coast.
     
        -  Our high mix of minority group employees added to DEC's
           compliance/observance to US Hiring requirements.
     
     Also, when the AMO entity was created and Stage I operations moved
     to Chihuahua Mexico, the cost-per-placement dropped to "pennies per
     component".

     Thus, we were complacent to toll away at being cost effective and
     continue to be instrumental to returning Digital to profitability.
     
                                     * * *
     
     The current methods don't seem very healthy.  This corporation or
     organization is but an 'organism' on a macro scale and thus has the
     innate characteristic of survival.  I once had the hope that
     business will improve for Digital, but now I perceive that if this
     type of "cuts to the bone" continue, perhaps all that will be left
     is a dismembered body -- I guess this is survival, but at what cost.
     
     BTW, I don't believe we're all encumbered with a sense of
     frustration, but rather, we have a justified concern for our well
     being.  And a person of well being is justified to be concerned when
     he sees sweet words (read, corporate jargon) like, "returning the
     company to profitability" really mean, "NO PAIN, NO GAIN!".
     
     Is Digital on steroids?  The side effects are all too revealing.

     Tony

Some portion of the ABO/Mexico load is moving to ASO. We haven't been told what
yet, but then I work in IM, not engineering or Manufacturing. We currently 
have people down there preparing to ship SMT equipment back to ASO.

I feel bad everytime a manufacturing plant closes, it hits very close to home.

dave

    Where is Stage II manufacturing for the DEC 3000 family going to move
    to?

    ... since we aren't able to sell the property and might as well do
    something with it.
    
    Frank