Until the very end, Xidex Corp. workers said, a banner hanging in the company cafeteria congratulated them for setting a one-day production record.
After posting the best production month in the company’s history by turning out a million computer hard disk drives in August, each work shift enjoyed an ice cream party to celebrate.
In fact, business had seemed brisk at the Irvine plant in recent months, some employees recalled Friday as they stood in line to collect unemployment benefits at the Employment Development Department in Santa Ana. They had logged many hours of overtime and had been asked to recruit additional workers among their friends and family.
So Xidex workers were taken by surprise by the sudden layoffs and shutdown of their plant. On Friday morning, the last of 825 Xidex employees who showed up for their regular work shifts were discharged and handed their final paychecks. Others had been laid off Thursday afternoon and the preceding Friday.
“Just when we thought we were the champion boxer in the ring, we were knocked out,” said Thoai Tran, a Vietnamese refugee who had worked for Xidex “five years and four days” when he handed in his ID badge Friday morning.
Jo McKee, a spokeswoman for Anacomp Inc., an Indianapolis firm that bought Xidex in August for $400 million, acknowledged that the workers who were laid off “might have been surprised by the timing.”
She said they had received “no official communication” about the layoffs until they were terminated. Nonetheless, she contended, it “was common knowledge among the people that the plant was going to be shut down.”
She said Xidex management last March informed company stockholders of its plans to eventually close the Irvine facility and consolidate those operations at a plant in Santa Clara because of declining demand for the computer disk drives made in Irvine.
The consolidation plans also were mentioned in a quarterly financial report sent to Xidex shareholders. Because Xidex has an employee stock purchase plan, she said, workers who participate in the plan should have received the report, although it made no explicit reference to layoffs.
McKee said Anacomp had originally planned to restrict the layoffs to 180 employees and cut production from seven days a week to five, due to a “softening of the market” for hard disk drives. The devices are permanently mounted in personal computers and are used to store and retrieve data.
But the company decided earlier this week that “a further softening of the market” would require shutting down the plant and laying off the remaining workers. She would not be more specific about how market conditions had deteriorated during the past week.
“The decision was made that we should implement the closing immediately,” McKee said. “It was our feeling that this was the best way to handle it. . . . It is sometimes difficult to balance the issue of what’s best for the stockholders and employees.”
Industry analysts and Xidex employees said Anacomp’s decision to close the Irvine plant so suddenly was prompted by the loss of a major order from its biggest customer, Seagate Technology, a Scotts Valley, Calif., disk drive maker. McKee would not confirm whether Seagate had cancelled an order.
Xidex workers who queued up for unemployment benefits at the state unemployment office in Santa Ana expressed financial concerns. Many said they wished that the company had told them what was coming at least a month earlier. Some said they had been so confident about the future that they recently had bought new homes and cars and taken expensive vacations.
The financial assistance they can expect from the company, they said, is limited. They said the company has promised to give them one week of salary for each year they have been employed with the firm and health benefits paid through November. Then they will be entirely on their own. The company, they said, has offered them no help in finding new employment.
Some, like Thoai Tran, were angry.
“I think most people feel offended because they had no previous warning,” he said.
Starting Feb. 4, employers will be required to give workers 60 days’ warning of plant closings under a new federal law.
That law applies to any business enterprise that employs 100 or more full-time employees and lays off at least a third of its work force or a total of 500 or more employees at a single work site. Under any of these criteria, the Xidex layoff would have required advance notification.
While Xidex officials would not say why they laid off employees as abruptly they did, some companies take that approach to reduce the possibility of on-the-job sabotage of equipment by angry workers or slackened production as a result of early worker resignations. Nonetheless, Lou Custrini, a spokesman for the Merchants and Manufacturers Assn., said some companies give workers advance notice of layoffs and provide extensive severance benefits, including the hiring of a professional consulting service to help laid-off employees find new jobs.
“They try to make the break as painless as possible because they don’t want to get wrongful discharge suits placed against them,” Custrini said.
When Rockwell International phased out 510 jobs at its two Collins Defense Electronics plants in Santa Ana last year, it chose to give the affected employees several months’ notice and established a job placement program to help them find jobs at other Rockwell divisions or with other employers. The company provided classes for workers on preparing resumes and interviewing skills.
Of the 510 employees, Rockwell transferred 152 to other Rockwell divisions in Southern California, and 86 were transferred to Rockwell facilities in Texas, Iowa and Utah, said E. Scott Wood, a Collins spokesman.
Rockwell decided to notify workers months ahead of time because, Wood said, “it was the right thing to do.”
“When the issue of notifying employees came up, the vice president in charge said we want to go by the Golden Rule . . . and treat employees as we ourselves would want to be treated.”
Daniel Johnson, Orange County labor market analyst for the Employment Development Department, said the prospects are bright that former Xidex employees will soon find new employment in today’s generally strong economy.
“There is a very low level of unemployment, and daily I talk to manufacturing employers seeking workers,” he said. “I assume a lot of these people will be picked up fairly quickly by companies who have had a difficult time finding skilled employees with good work habits.”