Control Data Closes Plant, Lays Off 1,100

A joint venture managed by troubled Control Data said Tuesday that it will padlock a computer disk-drive factory in Santa Clara, Calif., by next July, eliminating about 1,100 jobs.

The venture, Magnetic Peripherals, blamed the closing on declining demand for the specialized drive made at the plant. About half of the layoffs will occur within six months and the rest next summer, the company said.

Magnetic Peripherals is owned by Control Data, Sperry, Honeywell and Bull Systems of France. It is managed by Minneapolis-based Control Data, whose disk-drive and other problems led one analyst Tuesday to sharply increase his loss estimate for the company.

Estimates Raised

Computer analyst Michael Geran of E. F. Hutton in New York said he raised his estimate of Control Data’s loss for the just-completed quarter to 70 cents a share from his earlier projection of 15 cents. For the year, Geran said he now thinks the firm will lose a record $1 a share, or about $39 million. Last year, the company had a profit of $31.6 million, or 81 cents a share.

Control Data’s biggest troubles have been in its peripheral-products division, which makes disk drives. Declining demand and stiff overseas competition have led Control Data and other disk-drive makers to slash production and close plants.

“The reality of Control Data’s restructuring of its computer-peripherals division is becoming evident to the market,” analyst Geran said. “We can expect to see a cut in the capacity of that division by 30%.”

The price of Control Data shares traded on the New York Stock Exchange skidded 62.5 cents Tuesday to a 52-week low of $16.25 in heavy trading.