From the San Diego Union-Tribune
Uniden closing Sorrento Mesa Operation---Qualcomm eyeing it
Uniden to close facility here,
lay off 200 workers
Says crisis in Asia is partially to blame
By Deborah Solomon
STAFF WRITER
May 23, 1998
Uniden of Japan is closing its research and development
facility in San Diego and laying off 200 employees less than a
year after it announced a $50 million expansion in Sorrento
Mesa.
The company, which makes wireless communication products
such as cellular phones, told employees yesterday that it would
close July 31. San Diego research will be folded into the
company's operations in Dallas, Hawaii and Tokyo, a
company spokesman said.
The closing comes just two weeks after Uniden announced a
layoff of 30 engineers, which it blamed on the financial crisis in
Asia. A spokesman said Asian woes are also partly to blame
for the closure.
"Anybody who's in the high-tech business right now is feeling
the force of the Asian crisis," said John Harris, vice president
of marketing for Uniden America Co. in Dallas. Uniden, best
known for its cordless phones, manufactures its products in
South Korea.
However, the company has not been severely hurt by Asia's
troubles and is expecting strong sales this year. Uniden, which
is traded publicly in Japan, reported record sales topping $1
billion in 1997.
Brian Modoff, an analyst with BT Alex Brown, said the Asian
problems have not prompted many layoffs at companies in the
United States. He said Uniden may be motivated more by the
abundance of engineers in Dallas and the lower cost of doing
business there.
Harris said the closing was a "streamlining" move meant to
boost efficiency at the company.
"This is not a reflection on Uniden as a whole. It's just one
small operating entity and it just made sense from a financial
standpoint to cease operations," Harris said.
Employees and others familiar with the company said previous
corporate decisions precipitated the closing. Earlier this year,
the San Diego facility fought to keep Uniden's marketing
operations here, but lost out to Dallas.
In the wireless industry, physically separating marketing from
engineering is undesirable because it makes it harder for
marketers to know the product and pitch it to consumers. By
moving San Diego's engineering unit to Dallas, the company
will unite marketing and engineering.
Uniden's departure will leave an unoccupied 10-story,
270,000-square-foot building in Sorrento Mesa. The company
announced the building as part of a $50 million expansion last
May and said it planned to hire an additional 800 employees.
Harris said the company will lease or sell the building, which
should be completed in September. Sources in the wireless
industry say Qualcomm may be eyeing the building for its own
use. The tower is next to Qualcomm's facility, and the two
companies already have a relationship.
On Thursday, Qualcomm announced it had licensed its
CDMA wireless technology to Uniden in a multimillion-dollar
contract. Qualcomm said the contract is not affected by the
closure.
What will be affected are the 200 employees who have worked
for Uniden since it opened its offices two years ago.
Employees met with outplacement firms yesterday and will
continue to meet with them next week, Harris said. Some had
already lined up interviews with Qualcomm and other wireless
firms.
Finding an engineering job in San Diego should not be too
difficult, said Erik Bruvold, executive director of the San
Diego Council of the American Electronics Association.
"The market is still strong," said Bruvold. "We're starting to
see some blips which say that it may have softened from
where it was six months ago, but I think those people with
technical skills will be able to find positions."
There are 605 technical jobs open in San Diego, according to
UCSD Connect, a nonprofit organization that assists San
Diego's high-tech businesses.
Bruvold said Uniden's closure is upsetting, but should not
cause a panic in San Diego.
"It's disappointing that Uniden made that decision, but I think
that it in the end will be a small bump on the road and does not
foretell more layoffs for San Diego," Bruvold said.
Copyright 1998 Union-Tribune Publishing Co. |
