Racal Electronics Plc’s Racal Data Communications is reacting to the same changing environment that caused ICL Ltd and Ferranti International Signal Plc to scale back their manufacturing resources: the products that they make now require much less labour and can be produced faster, reducing the need for manufacturing space. So much in the computer and telecommunications market is now standard and can be bought in cheaper than it can be made by smaller companies that systems integration skills are far more important and valuable than hardware. All this means that between 500 and 600 jobs will be lost by the end of the year at Racal Data Communications, leaving it with about 4,500 worldwide. The manufacturing of low-end modems, currently done at the Racal Vadic plant in Milpitas, California, will be transferred to Racal Milgo in Miami at the cost of 200 jobs, and the plant will be closed, leaving only 40 research and development staff at the Milpitas base. And despite the transfer of work, 250 jobs will also go in Florida. And in the UK, the High Wycombe plant will be closed at a cost of 50 jobs, with UK manufacturing to be concentrated at the more modern Warrington, Cheshire plant. Major new initiatives, such as the plunge into network implementation following the winning of the UK Government Data Network contract, mean that the company’s growth will not suffer from the cuts and it looks for UKP300m of business this year, compared with UKP250m last. The company announced on Friday that it had won another network-building contract – UKP300,000 from Ladbroke Racing to construct a digital backbone network – using the Mercury Communications Ltd trunks and Racalnet Advanced PCM Megastream multiplexers – to provide broadcast facilities to all the firm’s main betting shops throughout the UK, using a satellite network to send data, video and race commentaries to all 1,800 Ladbroke betting shops. A prime focus of the restructuring will be to build Racal Data Communications’ presence on the continent ahead of the Single Market, and further acquisitions to follow Interlan and the Quanta fibre optic multiplexer firm are likely.
