OAKDALE, Minn. – Imation Corp. announced Tuesday plans to reorganize its manufacturing operations, including the closure of its Wahpeton, N.D., location and the elimination of approximately 675 jobs by mid-2009.
Imation will continue its magnetic tape coating operations at its existing plants in Camarillo, Calif., and Weatherford, Okla., and will outsource all converting operations for tape cartridges that are currently spread across three plants.
The company will end assembly of magnetic "floppy" diskettes and discontinue all manufacturing operations at its Wahpeton plant by mid-2009. The North Dakota location currently manufactures diskettes, as well as housing its tape converting operations, limited-volume CD-RW optical disc production, machining and plastic part molding.
"Diskettes have been a significant portion of our product portfolio for more than two decades, but they are now only a small, rapidly declining part of the market and they are nearing their end of life," said Dr. Subodh Kulkarni, vice president, research and development and manufacturing for Imation. "While we added other operations, such as small format optical media and contract manufacture of molded plastic parts, the markets for these products did not materialize to a level to justify their continuation."
Approximately 675 positions out of a current worldwide total of 2,070 will be eliminated by mid-2009, the majority of which will be in manufacturing operations.
Imation anticipates it will incur $25 million to $30 million in restructuring charges over the next two years.
"As we continue to see growth in open format tape products with lower gross margins, these difficult but necessary organizational changes are required for Imation to remain competitive in the manufacture of advanced magnetic tape products," said Frank Russomanno, chief executive officer and president, Imation.
Final converting and assembly of magnetic tapes will be transitioned to an outside company. These finishing operations include the winding of coated magnetic tape into cartridges, final inspection and packaging of the finished product.
In addition to the manufacturing consolidation, Imation will reorganize its R&D organization to support the company’s focus on engineering and rapid prototyping of consumer technologies.