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Foreign Cos. Shrink With Economic Downturn

Foreign Cos. Shrink With Economic Downturn

By CHRIS CZIBORR





Orange County’s largest foreign-owned companies shed nearly 1,000 jobs last year, lead by technology companies and makers of industrial goods.

That’s according to this week’s Business Journal list, which ranks the 30 largest foreign-owned companies here by their local employment. In all, the 30 companies on the list count 20,360 OC workers, down 5% from a year ago and off 3% from the 30 largest companies on last year’s list.

Last year’s job cuts are in stark contrast to the prior year, when the top foreign-owned companies here added jobs at a 7% rate, more than double the countywide clip at that time.

While job cuts are spread across the list, two Japanese technology companies accounted for the losses. No. 1 Toshiba Corp. cut 759 jobs from its Irvine computer assembly facility, while No. 15 Canon Inc. cut 319 jobs from its OC operations. Taking Toshiba and Canon out of the mix, the remaining 28 companies were basically flat, growing 1% or by 176 jobs.

The list includes U.S. headquarters, divisions and other operations of companies based in other countries. Electronics companies and automakers dominate the list. Other sectors represented include medical devices, aerospace and finance.

Japanese companies make up nearly half the list with 14 companies, including five of the top 10. British companies are next with six, followed by three from France and two from Germany. Individual companies from Canada, Taiwan, South Korea, Switzerland and Sweden make up the rest.

Even with its job cuts, Toshiba easily tops the list as it has for the past few years. The company employs 2,024 people here at its local computer, electronics, office equipment and medical device units. The company’s OC headcount fell by 27% last year.

Most of the layoffs took place early last year at Irvine-based Toshiba America Information Systems Inc., with the company shifting notebook computer production to the Philippines and Japan. Late last year, Toshiba said it was getting out of the desktop computer business entirely.

Repeating at No. 2 are the combined entries of Mitsubishi Electric Corp. and Mitsubishi Motor Corp. Together, the electronics and automotive companies count 1,517 OC workers, up 2%

Rounding out the top five: No. 3 Experian Inc., a unit of Britain’s Great Universal Stores PLC, which employs 1,300 people in Orange, up 8% from a year ago; No. 4 Germany’s B. Braun Melsungen AG, which counts 1,210 people in Irvine churning out medical devices, down 3% from a year ago; and No. 5 Tokyo-based Union Bank of California, which grew its local staff 1% to 948.

Union Bank switched spots with No. 7 Ricoh Co. of Japan, which ranked No. 5 last year. Ricoh, a maker of copiers and other electronics, saw its OC employee count drop 12% to 896 people.

Ricoh’s reduction partly was due to the March closure of a recordable compact disc plant in Tustin, which yielded a loss of 30 people.

“We tried to find positions for those affected employees in other parts of the company,unfortunately we weren’t able to find positions for everybody,” Ricoh spokeswoman Kim Kline said.

Ricoh last year also cut jobs elsewhere at its county facilities, with most of the layoffs taking place as a result of a move of its local paper splitter operations to Georgia, according to Kline.

“We wanted to move closer to our large customer base on the East Coast to reduce shipping costs and lead time,” she said.

The move cost about 60 jobs. The remaining job losses at Ricoh resulted from a shutdown of its OC reprographics supply section.

Kline said company officials weren’t anticipating any more layoffs this year.

“We expect our employee count to stay fairly constant over the next year,” she said.

South Korea’s Hyundai posted the biggest percentage increase in hiring on this year’s list, adding 285 employees for a total of 750,a 61% gain, and enough for the company to crack the top 10. Last year, Hyundai ranked No. 19

Hyundai spokesman Chris Hosford attributed the job gains to robust sales, with 2001 sales up 39% on top of a 49% sales gain in 2000. This year, Hyundai’s predicts a 15% gain in sales.

“With sales increases like that, we do need some more staff,” Hosford said.

Hyundai’s numbers include Fountain Valley-based Hyundai Motor America and Irvine-based Kia Motors America Inc. Both are units of Seoul-based Hyundai Motor Co.

Last year, Hyundai underwent a small expansion in Fountain Valley and plans to open a $25 million design center in Irvine with Kia late this year or early next year. The center stands to add create about 150 new jobs.

At No. 6 is Germany’s Allianz AG with 926 people at Newport Beach-based Pacific Investment Management Co. and the OC operations of Fireman’s Fund Insurance Co. and Allianz Dresdener Asset Management.

No. 8 Foxconn Electronics Inc., a Taiwanese maker of computer products, is a standout on the list. The company counts 850 employees in Fullerton, 150 more than the prior year,a 21% gain.

Last summer, Foxconn took an extra 172,800 square feet of space for a total of 578,800 square feet in Fullerton.

Foxconn is benefiting from a move by big computer companies to outsource production. The company’s customers include Compaq Computer Corp., IBM Corp., Intel Corp., Hewlett-Packard Co., Cisco Systems Inc., 3Com Corp. and Motorola Inc.

“At full capacity, we can crank out 300,000 to 400,000 computers per month,” said Mike Mai, operations manager of the plant’s computer enclosure-making section.

Mai also said the company, by year’s end, expects to add another 150 employees.

While Foxconn is gaining business during the tech downturn, another contract electronics maker, Toronto-based Celestica Inc., saw cutbacks locally. Celestica dropped seven spots from last year to No. 20 with 450 people in Foothill Ranch, a 29% decline.

Last spring, Celestica detailed plans to cut about 10% of its overall workforce as demand for its services slowed. The company is publicly traded on the New York Stock Exchange but is controlled by Toronto-based investment firm Onex Corp.

Another bright spot is No. 13 Alcon Laboratories, part of Nestle SA. The maker of eye drugs and surgical devices expanded employment in Irvine by 30% to 580 last year.

No. 20 France’s MGE UPS Systems Inc. saw a reversal of fortune tied to California’s energy crisis, which abated last year. The company dropped six spots from last year’s list after reducing its Costa Mesa staff by 25% to 450 people.

MGE spokeswoman Nancy Nelson cited a falloff in demand around midyear.

“People operating mission-critical businesses that need a battery backup power system in most cases already had those systems by last summer,” Nelson said.

MGE also has felt the pinch of the Internet bust and the falloff in demand for data center services, which were strong in 2000.

“We saw a real boom in sales because of that,” Nelson said. “But last year, with the economy and drop-off in e-commerce work, we have had a couple of workforce reductions as well as attrition.”

Company officials expect MGE’s OC roster will stay “fairly flat” this year, Nelson said.

Another company that had less than a banner year was Saint-Gobain Performance Plastics Corp., owned by Com-pagnie de Saint-Gobain of Paris.

After debuting last year at No. 14 with 600 OC employees, Saint-Gobain this year plummeted to No. 29 after shedding 300 workers since March.

Saint-Gobain human resources manager Bill Mitchell attributed the layoffs to the tech downturn, which left the company with unused production capacity.

“We’re heavily involved in fluid handling systems for the semiconductor industry,” Mitchell said. “And that industry took a real dive last year,there’s simply no demand for our products that go into those systems, so that business took a huge downturn from previous years.”

Mitchell said the chip downturn accounted for most of the reduction because, “that’s a good chunk of our business,” he said.

Saint-Gobain plans to keep its headcount where it is for the first part of the year, he said, with hopes of a possible rebound during the second half.

Dropping off the list was Tokyo-based Fujitsu Ltd., which sold off its 400-person Fujitsu Business Communications unit. The Irvine-based seller of phone gear was acquired by Los Angeles-based Platinum Equity LLC and renamed Altura Communication Solutions LLC.

Sweden’s LM Ericsson Telephone Co. fell off the list after shedding 100 OC employees for a total of 250, following a downturn in the wireless sector.

Paris-based Monogram Systems, formerly Weber Aircraft Inc., also fell off the list. The company, owned by French parent Groupe Zodiac, delivered pink slips to 100 employees to bring its county staff roster down to 258.

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