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Jabil Circuit moves work to Mexico

The St. Petersburg company plans to shut down an Oldsmar facility and trim its Ninth Street plant.

By JEFF HARRINGTON, Times Staff Writer
© St. Petersburg Times
published January 29, 2003


Jabil Circuit is cutting more than 300 jobs in the Tampa Bay area as part of its ongoing campaign to shift work to low-cost labor locations outside the United States.

The St. Petersburg maker of electronics components is shutting down a facility in Oldsmar that does warranty and repair work for Dell and other computer manufacturers, idling about 200 full-time workers, the company confirmed Tuesday. A majority of the business is being moved to Mexico. Separately, a Jabil spokeswoman confirmed another 120 jobs will be cut at its Ninth Street plant in St. Petersburg within the week.

From a high of more than 3,000 jobs in the Tampa Bay area a few years ago, Jabil has slashed its regional work force to about 1,700, including the pending cuts.

Jabil executives have defended the cuts as a necessary survival strategy at a time when spending on electronics has shriveled, particularly among large tech customers like Cisco and Dell. But laid-off workers said insult was added to injury when a group from a plant in Reynosa, Mexico, toured the Oldsmar facility last week for training.

"It's bad enough that they're taking our jobs, but to have to train people from another country (how to perform) our jobs?" said Bonnie Walton, who has worked at the Oldsmar plant for two years. "It's not like we're doing bad work. It's just cost effective for them to move to Mexico."

Jabil spokeswoman Lisa Allison said she did not have specifics on how the work was being reallocated to locations such as St. Petersburg, Louisville, Ky., and Reynosa, Mexico.

However, according to a Jan. 7 company memo obtained by the Times, Jabil plans to close the Tampa facility, known as Jabil Global Services, within 90 to 180 days and shift a majority of the business -- repair work for Dell and Cisco -- to Reynosa. A lesser amount of work will be transferred to St. Petersburg and Louisville.

In a second memo to plant employees dated Jan. 22, plant supervisor Eddie Grimes also indicated that a smaller part of the Dell business will likely be moved to McAllen, Tex.

Grimes wrote that he has received little detailed information from other executives but expects the job changes to be completed by late April or early May.

The Reynosa team is "working with our team to develop a plan for the move to happen," he told employees. "I would expect that Tampa will begin ramping down slowly as Reynosa slowly ramps up."

In the memo, Grimes urged employees not to take their frustration out by damaging or stealing equipment or tarnish their good work "by ending this thing in an ugly manner."

"Again, thanks for the great job that you guys have done over the past several years," he concluded, "and GO BUCS."

Jabil did not disclose severance details, but employees said they were receiving a week's pay for every year of service and all earned vacation time.

David Crane, a former Jabil employee who was laid off from the St. Petersburg plant in November, said the company treats employees well.

"I was the last one hired and the first one to go," he said. "I didn't have any problem with it."

But other workers, including some who were reluctant to give their names, criticized Jabil for laying off some employees with more than 20 years of experience.

The shutdown of the Oldsmar plant dovetails with Jabil's strategy to move from high-cost American and European workers to low-cost Asian, Latin American and South American workers.

The results have been dramatic: By the end of this year, Jabil expects fully 70 percent of its manufacturing will be in low-cost countries compared to 30 percent in the United States and Western Europe. Three years ago, the ratio was just the opposite.

At last week's annual meeting, Jabil chief executive Tim Main bemoaned the necessity of moving jobs out of the United States and the pain it caused employees.

"If we don't move the business, our customers will," he said.

At the time, Main did not say additional cuts were imminent.

-- Jeff Harrington can be reached at harrington@sptimes.com or (813) 226-3407.

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