MELVILLE, N.Y.--General Semiconductor Inc. today announced plans to close its manufacturing plant in Macroom, Ireland, which produces transient voltage suppression diodes and rectifiers, in response to weak economic conditions and the unprecedented downturn in electronics markets. The company also said it was making other cuts in operations worldwide and outsourcing more of its production to subcontractors.
The Macroom plant will be close by the end of the year, eliminating 670 jobs or about 13% of General Semiconductor's total workforce. The Long Island-based company said it expects to realize annualized cost savings of $25 million from closing the plant, and it will take pre-tax charges of up to $60 million in the third quarter to cover severance and other costs connected to the shutdown.
The majority of the products produced at the Irish facility will be transferred to plants in Taiwan and China, said General Semiconductor, which earlier this month agreed to be acquired Vishay Intertechnology Inc. for nearly $539 million in stock and assumption of debt (see Aug. 1 story).
In addition, General Semiconductor said it will outsource a number ofmature product lines to subcontractors and implement additional job cuts worldwide, totaling 3% of its total workforce. Since the start of this year, General Semiconductor has announced layoffs for 23% of its workforce, which totaled 5,700 at the end of 2000.
The closing of the Irish plant and additional layoffs worldwide "were already under consideration prior to our announced merger agreement with Vishay Intertechnology," said Ronald A. Ostertag, chairman and CEO of General Semiconductor. However, these new actions will "hasten our eventual integration with Vishay and better position the combined company for future growth," he said.
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