Merix to shutter its Wood Village plant

Layoffs will reach 180, with most of the job losses centered in Multnomah County

Merix Corp., the Forest Grove circuit board manufacturer, said this week that it would shut the doors of its Wood Village lamination factory by March 1 and cut 180 jobs.

Merix Chief Executive Officer Michael Burger said that 60 jobs would immediately be cut from the Wood Village plant this week, with an additional 80 positions eliminated there later this year.

The balance of jobs cuts will be spread across the company's other North American operations, which include a production facility in San Jose, Calif., 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 federal 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 that the move is the 'triage' portion of a multi-pronged effort to reduce costs at the high-tech company, whose stock price has tumbled in recent months.

Burger, who replaced long-time CEO Mark Hollinger last spring, criticized the responsiveness of Merix's Oregon management team and said that the job cuts were made through a process that identified employees that weren't meeting performance standards, instead of through attrition or seniority.

An unfortunate trend

Wood Village Mayor Dave Fuller said the company hand-delivered a letter informing him of its plans a few days ago.

Fuller said he still was surprised by the announcement. In previous conversations with the company, Fuller walked away with the impression that business was good.

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

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

The company reported a $5 million loss from continuing operations, or 24 cents 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 elsewhere in the People's Republic of China.

In the second quarter of 2007, the company reported $3 million of income from continuing operations on revenue of $103.7 million.

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.'

Valued community member

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.

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

The movement of some jobs and equipment to the company's Forest Grove facility could be seen, at least in the short term, as a boon for the city, but Jeff King, economic development coordinator for the city was careful to not draw too many bright lines.

"At this point we think the impacts will be minimal to Forest Grove but we're looking to confirm what we can," King said. "Merix, of course, is a very important partner and a valued corporate community member and we'll try to work with them as best we can," King said, "but we understand that a lot of their decisions are strategic and global in nature."

Editor's notes: An original version of this story stated that Merix made computer wafers, which is not correct. Additional reporting for this story was provided by Shannon Wells of the Outlook newspaper in Gresham