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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: tonyt who wrote (90563)	4/3/2001 11:56:41 AM
From: John Koligman	Respond to of 97611

Compaq Will Cut 700 Jobs in Scotland Amid Weakening European PC Market By DAVID PRINGLE Staff Reporter of THE WALL STREET JOURNAL Compaq Computer Corp. will cut 700 jobs in Scotland as it tries to streamline production in response to the slowing European personal-computer market. Compaq is planning to contract out the manufacture of personal computers for consumers to factories in the Czech Republic owned by Taiwanese companies Hon Hai Precision Industries Ltd. and First International Computer Inc. As a result, 700 jobs will be lost from Compaq's Erskine factory. The reductions are part of a global program announced by U.S.-based Compaq on March 15 to slash 5,000 jobs. Nicola Adamson, a spokeswoman for Compaq in the U.K., said the move should reduce the cost of making the PCs. "It is an increasingly competitive market" and there isn't so much to tell between different manufacturers' models, she added. Poor Performance The European PC market performed far below expectations in the fourth quarter, with unit sales growing only 5.3% from a year earlier, according to U.S. market-research firm Gartner Dataquest. In 1998 and 1999, the European market grew by more than 20% a year. As well as underlining the weakening European PC market, Compaq's job cuts are a sign that the U.K. high-tech industry is being hit hard by the slowdown in the global technology market. U.S. mobile-phone giant Motorola Inc. is also planning to make a large number of job cuts in the U.K. as part of a previously announced global effort to reduce costs. Mark Durrant, a spokesman for Motorola in the U.K., said that up to 700 jobs will be lost from its network division here, most of them from its Swindon facility. Mr. Durrant said that Motorola is consulting with the 3,100 employees at its Easter Inch plant in Scotland, which makes mobile phones, about proposed job cuts there. But it is too early to say how many positions will be lost in Scotland, he said. It is not just U.S. companies that are cutting back in Britain. London-based computer company Psion PLC and British telecommunications-equipment company Bookham Technologies PLC have both announced 100 job cuts in recent months. Motorola's and Compaq's work-force reductions are a severe blow to Scotland's Silicon Glen, a swathe of the country between Glasgow and Edinburgh known for its concentration of high-tech manufacturing plants. However, Ms. Adamson said, Compaq will continue to make servers and customized PCs at Erskine and that the plant there will still have 2,400 staff after the cuts. Production Delays Steve Brazier, an analyst with U.K. research firm Canalys.com, said that Compaq had been forced to switch production to the Czech Republic because it was taking too long to deliver PCs to customers from Erskine. He said it takes Compaq an average of 16 days to make and deliver a PC to a corporate customer. "This is a very brave decision by Compaq that should improve production speed while lowering costs," he added, warning that the move could disrupt supplies for a short period. Ms. Adamson said that contracting out production will speed up delivery of PCs, but declined to give specifics. She denied that supplies could be disrupted during the move. PS - As for Greenspan waking up - I don't know. I read yesterday that he likes to read economic statistics in the morning while lounging in the tub <ggg>. Regards, John