Compaq Computer Corp has announced its plans to consolidate worldwide manufacturing operations following its acquisition of Digital Equipment Corp. Six overseas plants will be closed and 5,000 jobs will be lost – the first wave of a planned reduction of 17,000 staff out of a total of 84,000. Two plants in Scotland will be closed, as well as one each in Brazil, China, Singapore and Taiwan. Final assembly shops, or configuration centers will also be closed in Japan, Brazil and Australia. In addition, at the company’s Houston headquarters, all PCA board and some consumer product manufacturing operations will be closed. Also, warehousing and distribution functions in Houston will be realigned to the company’s Optimized Distribution Model (ODM), under which it will consolidate its regional distribution and direct-ship orders from the factory to retailers and resellers. That action will result in 1,000 Houston-area jobs lost – about 7% of the total area workforce – and about 600 at DEC’s headquarters in Massachusetts. The goal Compaq has in mind as it consolidates manufacturing is to deliver 95% of all products anywhere in the world within five days or less. A spokesperson assured us that 17,000 is still the number of total layoffs planned.
