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ON takes steps to trim costs
POCATELLO -- To cut costs in a struggling economy, ON Semiconductor plans to shut down some of its global operations around Christmas time and to start requiring workers to use vacation hours during the slow first quarter of the year.
Excluding manufacturing workers, local ON sites will be shut down from Dec. 24 through Jan. 4, said Bob Klosterboer, ON senior vice president and the Pocatello site manager. Klosterboer said manufacturing at the local plant will likely only be suspended on Dec. 24 and Christmas, at which time the company will utilize the stoppage to do preventative maintenance. "In theory, nobody should have to take any time off without pay," Klosterboer said.
When the local plant was operated by AMI Semiconductor, Klosterboer said the forced vacation policy was also sometimes enacted, though he said it hasn't been required in recent years. "People would rather take two weeks in the summer or a week for hunting in the fall. We're not underplaying the fact that it is a sacrifice on the part of our employees," Klosterboer said. "On the other hand, we're not laying anybody off. One of our competitors, Intersil, just announced a few minutes ago they're laying off 9 percent of their worldwide work force."
Klosterboer noted that ON managers including himself and the corporate CEO will abide by the new vacation policy. The slowing economy has had a significant impact on ON's bottom line, Klosterboer explained. Automobile manufacturers, which have seen sales plummet, are among ON's major clients.
The first quarter of the year, which lasts through March, is typically a slow time as consumers curb their spending following the Christmas season. "Everybody would rather do this than see somebody lose their job," Klosterboer said. "I like it a lot better than telling somebody they need to go find another job in this economy."
He said ON now has about $470 million in cash to withstand tough times. "Based on the uncertainty of when this economy is going to turn around, obviously we want to hold onto that as long as we can," he said.
Scott Hobdey, regional labor economist with the Idaho Department of Labor, said seasonal shutdowns are nothing new among large manufacturers in the area. In addition to utilizing them to cut costs, companies such as J.R. Simplot Co. and ConAgra Foods sometimes shut down operations temporarily to clean their plants or upgrade equipment, he said. Hobdey said his office doesn't track seasonal layoffs, though companies sometimes voluntarily notify the Department of Labor.
"We don't track that because it's part of the way of doing business," Hobdey said. "Some people have vacation time and some file for unemployment (during seasonal closures). It just depends on the circumstances." Article RatingReader CommentsSubmit a CommentCommenting RulesWe encourage your feedback and dialog. All comments are subject to deletion by our Web staff.
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ON Semiconductor wrote on Nov 6, 2008 11:55 PM: