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 user 2008-08-26 at 12:20:09 pm Views: 62
  • #20549
    Imation shutting down facility: 140 jobs to be cut as Camarillo site closes this year
    The company announced Tuesday that it would move all of its magnetic tape coating operations to its plant in Oklahoma, cutting about 140 positions.About a year ago, Imation announced it would cut back operations in Camarillo, shrinking the work force at that plant by half, from 230 to about 110, by the end of this year. The new announcement came along with the company’s second-quarter earnings report.Imation anticipates the restructuring will cost the company about $20 million related to the Camarillo closure, with about half of that stemming from severance benefits and the costs of leaving the site.Imation is offering severance packages based on years of service, giving one week’s pay for each year, with a minimum of four weeks and maximum of 26 weeks of pay, said Brad Allen, Imation’s vice president of corporate communications and investor relations. He said employees also are being offered help with healthcare costs and outplacement counseling.A small number of people will be offered jobs elsewhere within the company, but most of the positions are being eliminated, he said.The company expects to eventually save $15 million to $20 million a year from closing the plant, which should help offset projected declines in the company’s magnetic tape profits.

    Plant older than the city
    The Camarillo plant was originally built by 3M in the early 1960s. In 1996, Imation was formed as a spinoff from 3M to handle data storage.Camarillo Mayor Charlotte Craven said the plant has been around longer than the incorporated city and used to be the largest employer in town, although employee numbers have dwindled over the years.”I was really disheartened this morning to hear they’re closing and exiting,” she said. “They’ve been a vital part of the city all along.”

    3M and Imation have not only been big employers in Camarillo, but the company and its employees have also been active donors and volunteers. It’s tough for the community, which also has watched Technicolor’s local presence shrink, Craven said.Allen said it is never easy to close a plant, much less one that has been around for so long. “But it’s part of being in a very competitive industry where you’ve got to optimize your business to maintain your competitiveness,” he said.Imation’s main business was originally magnetic tape, but the product has been adding higher capacity at lower prices in recent years, driving down profits. Growing areas of business for the company include optical storage, such as CDs, and flash memory.Magnetic tape represented about 34 percent of the company’s revenue in 2007, down from almost 56 percent two years earlier.

    Shift to Oklahoma
    In the second quarter of this year, the company had $547 million in revenue, up 32.5 percent from a year ago, with growth driven by optical and consumer electronic products. Net income was $7.2 million, compared with a $1.4 million loss a year ago.The company continues to forecast 2008 revenue at around $2.4 billion, about a 16 percent increase over last year.A year ago, company officials said they were trying to work more efficiently to offset the lower cost of magnetic tape, launching a program that included the closure of a North Dakota manufacturing plant and outsourcing some of the operations in Camarillo and Weatherford, Okla.

    The company also decided all of its coating operations could be done out of the Weatherford plant, which has $55 million worth of the latest coating equipment.Imation owns part of the Camarillo facility and leases part of another building that the company sold in 2003. Allen said it is too soon to say what will happen with the site.Craven hopes another company will move into that location, but she’s not confident, because a nearby building has been sitting on the market. “I don’t know if anything is going to come in or not,” she said.