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Merix to close local plant by March 1

180 jobs will be phased out, with 60 let go this week

Merix Corp., the Forest Grove-based circuit-board manufacturer, announced it would close its Wood Village lamination factory by March 1, and will eventually cut its ranks by 180.

Merix Chief Executive Officer Michael Burger indicated that 60 jobs would immediately be cut from the Wood Village plant this week, with an additional 80 positions to be eliminated later this year. The balance of job cuts will be spread over the company's other North American operations, which include a production facility in San Jose and corporate headquarters and a small production plant in Forest Grove.

The effect on operations in Forest Grove are unclear, although documents filed with the Securities and Exchange Commission show that some equipment from Wood Village would be moved to the site in western Washington County.

In a conference call with analysts on Wednesday, Jan. 9, Burger said the move is the 'triage' portion of a multi-pronged effort to reduce costs at the company, whose stock price tumbled in recent months.

Burger, who replaced long-time CEO Mark Hollinger last spring, criticized the responsiveness of Merix's Oregon management team.

Job cuts, starting with 60 this week, were made through a process that identified employees who weren't meeting performance standards, he said, rather than through attrition or seniority-ranking procedures.

Wood Village Mayor Dave Fuller said the company hand-delivered a letter to City Hall informing him of their plans a few days ago, but he was surprised by the announcement nonetheless. In previous conversations with the company, Fuller got impression business was strong.

'It's been a fairly stable operation once got it up and running,' he said. 'It got a slow start because of the downtown in the economy after Sept. 11. But the last time we talked, things were going very well.

'It's a very competitive industry,' he said.

Burger told investors the end of the fiscal quarter brought the actual position of the company's Oregon enterprise into clearer focus.

'As the quarter ended, I found that our North America operations were not as fundamentally sound as first believed,' Burger said.

The company reported a $5 million loss from continuing operations, or $0.24 a share on revenue of $97.4 million for the second quarter of fiscal year 2008, which began in July.

Included in that loss was $1 million in severance costs from the company's closure of a Hong Kong facility purchased in 2005. Merix will move those operations to China.

A year ago, the company reported $3 million of income from continuing operations or $0.14 per share on revenue of $103.7 million for the second fiscal quarter of 2007.

Fuller said he was sad to see the Merix facility go.

'It's kind of the trend, an unfortunate trend,' Fuller said. 'We continue to lose these high-tech jobs and the intellectual knowledge that goes with them.'

Merix isn't the largest employer in Wood Village, but the loss of jobs and the functioning plant, which provides a big boost to city property taxes, will be felt.

'We'll miss them,' he said. 'They were good neighbors, good people to deal with.'

Fuller was hopeful the plant could be repositioned, saying facilities like it are often built with a bit of flexibility.

'I think it could be adapted to something else,' he said.

Christian Gaston, reporter with the Forest Grove News-Times, and Shannon Wells of the Gresham Outlook contributed to this story.