Asia forces PCB firm to act

Asia forces PCB firm to act
Roy Rubenstein The news that Viasystems is to close its Rugby PCB fabrication plant with the loss of 91 jobs certainly raised an eyebrow. The reason was not the scale of the closure, unfortunately the UK electronics industry has seen far worse in the last nine months. Rather, the surprise was that the Rugby announcement follows one made only five months ago that the US firm was closing its Scottish facilities at Selkirk and Galashiels. At the time, news of the Scottish closures generated a storm of protest. Union leaders called for a government investigation while Scottish Industry Minister Gus Macdonald claimed the 900 workers had been the victim of “a very large power play” by the US firm. The anger was due to the closures coming less than two years after Viasystems acquired the sites. It was also at a time when it was expanding its state-of-the-art Tyneside facility, the beneficiary of a regional aid grant. Jeffrey Davis, Viasystems’ president, Europe, is not surprised by the fierce response the closures generated, the result of “regional politics”. The reason for the closures, however, is far simpler, said Davis – to meet the challenge posed by Far Eastern PCB makers in what is an extremely competitive global market. “The real basis for the closures is consolidation, to create the largest, most economical facilities,” said Davis. This is in order to better compete with Far Eastern manufacturers who have grown their market share in the last few years. “Their quality is acceptable, their delivery is improving and the pricing is very competitive,” said Davis. Viasystems entered the PCB manufacturing market through a series of acquisitions across Europe. Consolidation among the 13 facilities was the result. Yet Davis is keen to point out that the fate of the Scottish facilities at Selkirk and Galashiels was not sealed with their acquisition in March 1997. “Thirteen million pounds of investment, a significant amount, was made in good faith to bring it up to date and make it globally competitive,” said Davis. “The [closure] decision was made in the fall of 1998 after it didn’t yield.” Asked if the period of consolidation is over, Davis said: “Most of the major consolidations we anticipated have been done.” The key is having facilities close to major customers. This is what Viasystems now has with sites in Sweden, Holland, Italy and the UK. And what reassurance do the 2,000 staff at the North Tyneside plant have in light of the recent UK closures? It is here that Davis’ tone picks up. “Newcastle represents a huge investment, it is our flagship site in Europe,” he said. Last year Viasystems commissioned a 500,000 sq. ft. factory to add to the 400,000 sq. ft. site already there. Over half of all Viasystems’ European production occurs there.


Leave a Reply

Your email address will not be published. Required fields are marked *

*