Business

Gov. Easley Sending Rapid Response Team to Flextronics

Posted October 5, 2007 2:41 p.m. EDT
Updated October 5, 2007 10:16 p.m. EDT

— Gov. Mike Easley on Friday announced that a Rapid Response Team from the North Carolina Department of Commerce will be deployed to the Flextronics plant in Youngsville in thre after the company announced it will close its facility over the next six months.

“I have directed the Rapid Response Team to work with Flextronics and local employment partners to help employees begin the process of either finding new jobs or gain(ing) the training necessary to remain successful in our competitive economy,” Easley said in a news release.

The plant employs between 600 and 700 people, according to a spokesperson for the Franklin County Economic Development Commission. Average wages for workers ranged from $12 to $15 per hour.

Flextronics (Nasdaq: FLEX) is the largest private-sector employer in Franklin County.

The N.C. Department of Commerce’s Division of Employment and Training is contacting Flextronics to determine what services might be needed. The team consists of representatives from state and local agencies, including the local work force development board, the Employment Security Commission and the N.C. Community College System.

The team helps coordinate transitional services for employees who have lost their jobs due to a layoff or facility closure. Services may include job search and placement assistance, career counseling, labor market information and assessment of skills and needs.

The team’s goal is to reduce the amount of time people are out of work, whether that is helping them find new jobs or ensuring they receive additional education, training or other services.

Several employees told WRAL.com on Thursday that they had been told by company officials that the plant would be shut down. Flextronics did not respond to phone calls and e-mails until Friday afternoon.

“This action is being taken to better align the company’s resources and improve supply chain efficiencies,” Renee Brotherton, vice president of corporate communications, said. “This is not a reflection of the performance of Youngsville employees, who have done an outstanding job.”

Brotherton said the company would have no further comment.

Ronnie Goswick, director of the Franklin County Economic Development Commission, said the county had not heard the news directly from Flextronics.

“It’s not good news,” Goswick said. “Any time people lose their jobs, it’s terrible news.”

Given the scale of the layoffs, Goswick added: “We will feel this in the county for some time.”

The layoff would be the largest in North Carolina’s technology sector in recent years. Earlier this year, PC manufacturer Lenovo let go 350 people in the Research Triangle. Lenovo had cut 350 jobs in 2006, too.

As of Friday, the North Carolina Department of Commerce had not yet received a so-called WARN notice from Flextronics confirming the shutdown. WARN stands for Worker Adjustment and Retraining Notification. The state requires a notice 60 days before plant closings and mass layoffs occur.

Flextronics, an international conglomerate based in Singapore, recently acquired a competitor, Solectron, in a $3.6 billion deal. Solectron operates two facilities in the Triangle employing several hundred people. The Solectron acquisition closed on Monday.

Whether those plants will be affected by the changes in Youngsville is not clear.

The layoffs did not come as a surprise to a New York-based analyst who follows Flextronics.

“They have made clear that there are costs to be wrung out,” said the analyst, who asked not to be named. “Solectron has a lot of fat,” he added.

Flextronics works with customers to design, build, ship and service electronics products. It operates facilities in 35 countries around the world.

The Flextronics campus in Youngsville covers some 75 acres. The company currently operates two 125,000 square foot buildings.

In 2002, the company pledged to expand and employ as many as 1,500 people at the facility in exchange for millions of dollars in state economic incentives. Even with the closure of some other operations in the Triangle and the moving of the jobs to Youngsville, the company never approached that 1,500 total.

“Some good will come out of this,” said Goswick, the economic development executive. “We now have 650 to 700 employees who are trained in this kind of work and two nice buildings that we can start marketing with [Flextronics’] permission.

“We’ll turn it around as soon as possible,” he added.

Flextronics purchased 70 acres of land and planned to hire 1,500 people “just prior to the [information technology] bust,” Goswick recalled, noting the 2001 and 2002 economic slowdown ignited by the implosion of “dot com” companies and related industries.

Franklin County worked with Flextronics to win $2 million in job-training grants from the GOLDEN Leaf Foundation. All but a third of that money has been returned because not enough new workers needed training, Goswick said.

The county also spent some $9 million to expand infrastructure services such as water and sewer to the area of the Flextronics campus, Goswsick noted. However, he said that investment had also helped open a new area up for development, which in turn led to the recruitment and expansion of other businesses.

Goswick intends to waste no time in finding a replacement for Flextronics.

Recalling that he spoke with a potential client recently, Goswick said, “I plan to contact that person and see if they are still looking. This [facility] may fit into their plans.”

The unemployment rate in Franklin County in August was 4.4 percent, under the 4.7 percent state average. State figures show 27,007 people had jobs in the county.