A day after making its first acquisition, Kemet Corp. announced it would restructure operations, moving commodity capacitor production to lower cost offshore plants that would result in the loss of 650 jobs in the U.S.
In a statement, Kemet said it would relocate production of commodity ceramic and tantalum capacitors to existing plants in Victoria, Matamoros, and Monterrey, Mexico, as well as a plant in Suzhou, China, slated to begin operation the fourth quarter. The company could not be reached for additional comment.
The company would also set up a technology center at its Greenville, S.C. headquarters that would develop new products and manufacturing processes. Once a product is ready for high-volume manufacturing, the company would move it to one of the offshore locations.
Kemet has undergone a string of unprofitable quarters the last two years stemming from the industry downturn and increasing competition from offshore passive component suppliers that have driven average selling prices downward. In response, the company has reduced its workforce from over 14,000 in 2000 to 6,500 through a series of restructuring actions that have closed several plants.
Yesterday, Kemet made its first acquisition since being spun off as an independent company from Union Carbide Corp. in 1990. The company acquired several product lines from Greatbatch-Sierra Inc., a Carson City, Nev., supplier of capacitors and filters, for an undisclosed amount.
Kemet expects to incur charges of $35 million over the next two years from the restructuring, with payback to occur within a year based on fiscal 2004 projected revenue.