MPC will cut North Sioux work force
By Dave Dreeszen, Journal business editor | Posted: Tuesday, August 19, 2008
NORTH SIOUX CITY -- About 20 MPC Corp. jobs in North Sioux City are being outsourced to Mexico, where the financially troubled computer maker is moving much of its production.
MPC, which acquired Gateway's professional division last year, is cutting about 5 percent of its U.S. work force, including about 35 positions at its Nampa, Idaho, headquarters, and will transfer the work to a Flextronics Corp. plant in Juarez, Mexico.
The affected jobs, in the areas of sales, information technology, customer service, had supported an MPC plant in Nashville, Tenn., that MPC had acquired in the Gateway deal, MPC spokesman Michael Boss said Monday.
Earlier this year, MPC, looking to reduce costs and overhead, announced the closure of the Nashville plant and signed an outsourcing deal with Flextronics, a large global contract electronics manufacturer.
With its October 2007 acquisition of the Gateway Pro business, MPC became the only top-10 U.S. PC vendor focused exclusively on the $43 billion market for business, educational and government contracts. Boss said MPC's competitors long ago adopted a globally based manufacturing strategy.
"It's imperative for us to move toward that model in order to be competitive,'' he said.
The transition to the Flextronics outsourcing contributed to delays in manufacturing and customer deliveries and service and support issues, MPC said in its latest earnings report, released last week. For the quarter ended June 30, the company reported losses of $12.5 million, or 37 cents a share, down from $25.3 million, or $1.91 a share, a year earlier.
In a disclosure filed with the Securities and Exchange Commission last week, the company said the transition issues "materially impacted our liquidity and caused a substantial deterioration in our working capital" during the first six months of the year. Production delays caused the cancellation of some backlogged orders, and a decline of sales during the third quarter. The company also continue to extend payment to a number of vendors "well beyond normal," according to the disclosure.
In the 10-Q form filed with the SEC, the company said it may need to raise a "significant amount of additional funds'' to pay vendors and fund its business.
"There can be no assurance that we will be able to secure additional sources of financing on terms acceptable to us,'' the company said in the disclosure. "Continuing liquidity constraints could negatively and materially impact our business and results of operations could impact our ability to continue operations or could result in bankruptcy.''
MPC, which has been in danger of being delisted on the American Stock Exchange, has until Nov. 9, 2009 to regain compliance with Amex's continued listing standards. MPC's stock, MPZ, closed at 21 cents Monday, two cents above its 52-week low. It has traded as high as $2 a share in the past year.
MPC, which acquired Gateway's professional division last year, is cutting about 5 percent of its U.S. work force, including about 35 positions at its Nampa, Idaho, headquarters, and will transfer the work to a Flextronics Corp. plant in Juarez, Mexico.
The affected jobs, in the areas of sales, information technology, customer service, had supported an MPC plant in Nashville, Tenn., that MPC had acquired in the Gateway deal, MPC spokesman Michael Boss said Monday.
Earlier this year, MPC, looking to reduce costs and overhead, announced the closure of the Nashville plant and signed an outsourcing deal with Flextronics, a large global contract electronics manufacturer.
With its October 2007 acquisition of the Gateway Pro business, MPC became the only top-10 U.S. PC vendor focused exclusively on the $43 billion market for business, educational and government contracts. Boss said MPC's competitors long ago adopted a globally based manufacturing strategy.
"It's imperative for us to move toward that model in order to be competitive,'' he said.
The transition to the Flextronics outsourcing contributed to delays in manufacturing and customer deliveries and service and support issues, MPC said in its latest earnings report, released last week. For the quarter ended June 30, the company reported losses of $12.5 million, or 37 cents a share, down from $25.3 million, or $1.91 a share, a year earlier.
In a disclosure filed with the Securities and Exchange Commission last week, the company said the transition issues "materially impacted our liquidity and caused a substantial deterioration in our working capital" during the first six months of the year. Production delays caused the cancellation of some backlogged orders, and a decline of sales during the third quarter. The company also continue to extend payment to a number of vendors "well beyond normal," according to the disclosure.
In the 10-Q form filed with the SEC, the company said it may need to raise a "significant amount of additional funds'' to pay vendors and fund its business.
"There can be no assurance that we will be able to secure additional sources of financing on terms acceptable to us,'' the company said in the disclosure. "Continuing liquidity constraints could negatively and materially impact our business and results of operations could impact our ability to continue operations or could result in bankruptcy.''
MPC, which has been in danger of being delisted on the American Stock Exchange, has until Nov. 9, 2009 to regain compliance with Amex's continued listing standards. MPC's stock, MPZ, closed at 21 cents Monday, two cents above its 52-week low. It has traded as high as $2 a share in the past year.
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IT Contractor wrote on Nov 10, 2008 9:48 AM:
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