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Seagate counts cost of closing Scottish factory

Claims it won't be hurt by Dell/IBM deal

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Seagate is taking a restructuring charge of around $60 million in its current third quarter, including the scrapping of its Scottish factory. The vendor said the one-off $50 million to $60 million charge would pay for the closure of the Livingston plant, consolidation of its customers service facilities and other action it was unwilling to detail. The future of the semiconductor plant had been uncertain since last year. In October, Seagate announced it was looking for a buyer, then later that month decided to sell the plant. At the time the factory employed around 262 people. This number is now down to about 50, production has stopped, and the closure will go ahead in July. The restructure will also include the closure of the two tape repair centres in Irvine, Scotland and in California. This facility will be consolidated in Mexico. The distribution centre, also in Irvine, will remain open according to Ian O'Leary, Seagate corporate communications manager for European operations. O'Leary added that the company would continue in its main business of storage: "Seagate is not a micro-electronics company. This area employed around 260 people, out of 83,000 in Seagate as a whole." He admitted: "The disk drive sector is a very competitive market and the price of storage is continually going down." O'Leary said Seagate would tackle this by concentrating on reducing costs and improving time to market. The US giant denied it would be hit by the IBM/Dell deal announced last week. Seagate previously supplied direct vendor Dell with disk drives, but Dell has announced it buy such items from IBM. O'Leary said: "We retain a very good relationship with Dell. Every indication is that Dell will continue a balanced, multiple-source strategy for their components." ®

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