Conference 7.286::digital

    
    >If because of changes in the way computers are manufactured, some
    >of our manufacturing capacity is now in excess and some plants must
    
    Could you please explain more what you mean by this?
    how does B follow from A ? could you outline some of these changes?
    Thank You,
    /naser

Naser,

I do not believe that b follows from a.  It is my belief that there is 
no need to close any plants.  But in this opinion I'm in a minority.
If you wish to have a discussion on the topic of whether plants should be
closed, by all means do.  But please open a new topic for that discussion.

In this topic I would prefer that the opinion that manufacturing plants
should be closed is accepted.  

Given the acceptance of that fact, what are the criteria that should be used
in order to select which plants to close?

I would like that question to be the focus of replies to this topic.

Dia dhuit,

Willie

Impact on the community?

/Dave.

RE: .3

Impact on the community should be considered only insofar as it affects the
company's ability to do buisness (e.g., closing plant X will tick off most
of our customers and they'll take their business elsewhere, therefore we keep
plant X open, even though it otherwise makes no business sense to do so).
Otherwise, impact on the community is irrelevant.  This is a business, not a
public charity.  We are here to make a profit for our stockholders.

--PSW

Re .4:

	You're right, but the way you put it makes the process sound so cold.
    If you say you have to balance the concerns of the stockholders, 
    employees and customers using money as the metric, it means the same
    thing, but sounds so much nicer.  ;^)

I would see the decision to close a plant being a management 
decision.

Management are employed by the stockholders (shareholders) of the 
company in order to look after the stockholders' interests.

In doing their job managers should take account of customer, 
employee and community interests, but only in so far as this 
helps their primary aim, which is to protect stockholders' 
interests.

If you agree with the above the title of this topic could be 
rephrased:

"What criteria for plant closure would best protect Stockholders' 
Interests?"

Dia dhuit,

Willie

    
    Plants with high overhead costs both IL and DL.
    
    Plants whose Charter include products which are not selling and the
    forecast is for that trend to continue.
    
    Plants were it is easier and less costly to close due any local/
    government constraints.
    
    Plants whose capacity can be incorporated into other plant(s) at a
    cost which is not prohibitive.
    
    Plants which can be sold off to specialist non-competitive (in the
    mainstream) Corporations - ie Disk Manf. plant to Conner Peripherals.
    This one does not necessarily mean closure.
    
    Plants whose output in terms of quality either in content or meeting
    customer (DEC or Non-DEC) schedule dates is consistantly bad and where
    that capacity can be transferred to a plant with a better record of
    acheivement in those areas.
    
    That's all for now,
    			Don H.
    

    	Inside Storage, the "Asset Utilization Task Force" has been
    looking at the many issues involved in a closely related decision:
    "Where should we do work X?", and "How many sites should do work X?"
    
    	Whole varieties of issues have been examined.  IL/DL workforce
    capability as well as size.  Capital equipment.  Space.  Content
    issues (ie. European). Specialization vs. Breadth.
    
    	As a result of this task force, the work of the Springfield,
    Colorado Springs, and Kaufbeuren plants is being focused in specific
    directions for each, including some moves of products to a single,
    world-wide production site.  The charters of the plants are a lot
    crisper, and they each understand that they must be COMPETITIVE 
    in cost (street prices, not DEC prices) in their portfolios.
    
    	This isn't closure of plants, but it's a process which can
    lead to it, depending on the outcome.

Can you provide more details about the (crisper) roles for each of the 3
manufacturing plants? It would be interesting to hear about the directions
for the work they will be doing. 

It is refreshing to see that they are working towards a more competitive 
(street) cost structure -- let's hope that it won't take too long to achieve
this goal. 

    re: .9
    
    That's a good point. I believe that every employee working in a Manf.
    plant should know (or at least have easy access to) the relevant and
    current plant charter.
    
    The red-necks amoung us might see the above as a criteria for 
    measuring plant management - but that's another story and another note
    perhaps.
    
    Don H.
    

    It is my understanding that weather a building is leased or company
    owned is given some consideration.

    
    
    Just heard that the Andover plant and the Tewksbury plant is up for
    sale. Does this mean plant closures there?

    	replying to .9 -- request for more specifics on plant focus.
    
    	Hopefully, I'm not sharing any surprises here.  I don't think
    so, but of course, anything could still change.
    
    	Springfield is no longer going to be doing disk products, but
    will continue to do other storage products such as tape.  In addition,
    the Enfield modules work is moving into Springfield.
    
    	The disk work will be moved to Colorado Springs or Kaufbeuren,
    or the customers will be migrated to other products manufactured
    by those plants.  I can't be more specific because some of the 
    details involve unannounced products.
    
    	The RA8X disks will be moved from KBO to CXO.  Even though they
    are end-of-life from a revenue standpoint, there is a phenomenal
    amount of field support work left in the next few years.  This 
    will allow KBO to concentrate on the many 5 1/4" products they
    currently have on their plate, and CXO to get a bit more scale
    efficiency as the WW spares supplier for RA8X.
    
    	There are many other details being actively worked, but as
    they involve unannounced products as well as existing products,
    I cannot discuss details.  The general intent is to have the 
    disk plants (CXO and KBO) appear as one virtual organization to
    the worldwide Digital and external market.  At the same time,
    those organizations will not be identical or duplicate each other's
    charter, but will be complementary.  In a capital-intensive
    business (cleanrooms, precision tooling and 2000+ track/inch
    electronic systems), this should permit us to work toward
    a more competitive position.
    
    
    	Hope this answers the question.

    I don't believe Andover up for sale (APO).  Perhaps you're confusing
    APO with ACO.  APO has some (fairly difficult to obtain) chemical
    permits.  I've been told that the leases with TWO and ACO have
    been terminated and that both of these have been sold.
    
    BTW, for those who've never been to TWO or ACO, these buildings are
    converted stores.
    
    Mark.

    HUH??  I work in TWO and haven't heard this one yet.  As a matter of
    fact, some people just moved in and built a new lab.
    

    ACO is a DEC owned facility. We bought it about 11 years ago.
    
    The APO rumor is strong even though we do own that building too
    and put  mucho $$$$s into it. However it was never used as
    intended. The work went to Greenville shortly after it opened.
    
    We have however tried to see ACO and quite a few potential
    buyers have gone thru. the facility but there's a zoning
    problem for one....others as well.
    
    Lloyd

      How about the new Powdermill Road facility that just opened? It
    will house 1,100 employees.See back page of DTW (March 5 edition) for
    full details.Usually you hear about a plant of this size being built
    but I didn't even hear any rumors until I read it in DTW.
    
                                           Rich

  Re: TWO --> APO.

  A memo sent from the apppropriate manager on 05-Mar-1991 confirms
  that this is being studied, new labs or not.

                                   Atlant

This discussion has gone a little off track.

I'd like to refocus it.

Take the following hypothetical case:

Jack Smith is going to the next Board of Directors meeting with a 
list of plants he is recommending to close.

One of the Directors asks Jack:

"What criteria did you use, to select which plants to close?"

Jack replies: " ..................

    
    
    Willie,
    
       I'll throw one out for discussion.
    
    'Cost to Manufacture'
    
    paddy
    

    
    Well since thatlast one got so much attention let's talk about
    Digital's social responsibility to the community and it's livelyhood.
    
    If a plant closing then means the local economy is catastrophically
    effected.  Then does DEC have a social responsibility to maintain a
    presence there and possibilly re-direct product or take other actions
    to keep it open and viable?
    
    I think that DEC does have a vested interest to keep some plants on
    line even if it means operating in the RED for some period of time.
    
    Any comments?????
    
    Paddy

	I remember when Rockingham Park burnt down. The track is located
	in Salem NH where DEC had a number of other plants at the time. The
	company was appoached to buy the land for expansion but turned it
	down. The reason given was, in part, that Digital did not want to
	be *that* big a part of a communities economy.

	I believe that rather then having an obligation to keeping a plant
	open "for the community" that Digital has an obligation not to be
	such a big part of the economy that a plant closing would be devistating
	to that community.

	I believe that Digital's responsibility to a community is not greater
	then the communities responsibility to Digital BTW. Far from DEC
	being difficent in this balance I see the communities not holding
	up their end through support for roads, education, moderation of
	taxes and restrictions, etc.

			Alfred

      -.1 
    
    
       Good points Alfred...........   But Digital has opened plants in
    communities that have had no other industries and because of that the
    community has become dependent on it.  This was done with many plants 
    over seas.  
    
       Digital buys the land, employs the local people, becomes an integral
    and important of the local economy and is happy there. 
    
       I may add that the community continually does all in it's power to
    do it's share to keep digital there. One of the reasons digital goes to
    these countries is due to the major tax breaks given.
    
       So let's just say that the community has bent over backwards to
    fulfill its social duties and digital has done the same.  
    
       Let's also say that the plant has a very low cost to manufacture, an
    excellent new product introduction record and excells in the MRP II
    metrics criteria. 
    
       Let's just say that the plant is over-all one of the better product
    producers we have.  And the plant is being closed because politically
    it is easier.  
    
       Do we then have a social commitment to this community and its
    residents.  Should the social responsibility to a community be a 
    determining factor in the closure of a plant.
    
    paddy   

    re -.1
    Surely a plant with such positive performance wouldn't be targeted for
    closure.
    
    Could it?
    
        Brendan

      
    
    re-.1
    
       Brendan,
    
             Surely it (they?) are.   It is a sad day when something like
    this happens.  These actions(close a well functioning plant) are devoid 
    of 'honor'.  Which is another topic all together.  
    
             If I were king for a day I would take the five worst
    performing plants and give them a year to turnaround with the result
    being closure.  But in that vain I would do everything in my power to
    help those plants turn it around.  
    
             I think that most of us will agree our manufacturing footprint
    is too big. But I have to believe there are creative ways to utilize
    this real estate.  
    
             Digital has done a good job in vacating leased space. But, I
    think, we have not done such a grand job in the utilitization of the 
    existing space.  We, in some cases lease out the space and potentially 
    the work force to other industry that may be expanding in the same
    areas/countries/counties.
    
    I'm sure there are a million things that have to be considered when
    closing down a plant and one of the issues (IMO) is what impact it will
    have on the community.  
    
    paddy

    If the plant is doing good work, producing quality products, and has a
    high efficiency rating, then closure is clearly the result of either
    producing the wrong products or political decision-making.
    
    In either case, do you think that the management who has come to 
    the marvelous "close the plant" decision is going to even remotely
    notice the impact on the community?  The community impact certainly
    won't affect the decision even if the decision-makers notice it!
    
    Let's face it, if the plant is performing well, then it needn't be
    closed.  And the way to avoid closure has nothing to do with the impact
    on the community.  It has to do with the politics of the decision.
    
    That's where I suggest you focus your attention.  No rational person
    is going to think it's reasonable for the plant to close if the work
    they do is profitable and good.  The impact on the community isn't
    your complaint - it's the politics of the irrational-sounding decision.
    
    [Naturally we must remember that other people may have differing views
    of the plant closure.  There may be more to this than we've heard in
    .21,.23,.25.]
    
    K.