As many as 300 workers have lost their jobs as compact disc manufacturer Cinram International Inc. winds down its Anaheim plant, a company official said.
The 218,000-square-foot plant employed nearly 250 full-time employees and another 60 temporary workers before the company decided in the first quarter to close the facility. The shutdown is part of a consolidation by Cinram, which replicates movies and software on digital video discs and compact discs.
The Anaheim plant’s manufacturing gear has been sold off, the company said, and a handful of jobs have been relocated to facilities in Huntsville, Ala. and Richmond, Ind., where Cinram is based.
“Part of the reason we’re moving is that we have contractual obligations to make the discs out of our Huntsville plant,” said Bruce Deck, Cinram’s engineering manager at the Anaheim plant. “And another thing is it’s simply too expensive to do business in California. It’s getting more expensive every day.”
Cinram also has a facility in Santa Monica that makes DVDs for the movie industry. California’s power crunch wasn’t the driving cause for the Anaheim plant’s closure, as the city’s utility recently lowered electricity rates.
The Anaheim closure marks the end of Cinram’s four-year run in OC. The company had sought to streamline production with the Anaheim facility but found the results weren’t as cheap as planned.
“There were simply declining sales in the CD market,” Deck said.
Most of the company’s full-time employees in Anaheim were given pink slips. Only a handful of people were offered relocation to other Cinram facilities, Deck said. Cinram saw its profits squeezed in its most recent quarter. The company earned $16.5 million vs. $19.4 million in the same period last year on sales that increased 37% to $184.2 million. The company cited increased pressure from competitors.
Additionally, fewer music and software releases decreased disc shipments, partially offsetting the heady growth Cinram saw in videocassette and DVD sales. Cinram officials decided to expand the Huntsville facility as a major U.S. hub and expect it to reach full capacity by early 2002.
The Huntsville expansion is part of Cinram’s global restructuring announced late last year. The company expects the changes to result in improved performance in the second half of the year and beyond. n
