Costa Mesa Canon Workers Face Big Layoff : Jobs: A manager says a significant portion of production will be transferred to Tijuana. The plant employs 550.
The jobs of hundreds of employees of Canon Business Machines Inc. here could end within four months as the company struggles to reorganize in the face of shrinking sales and profits.
The first workers to be affected learned Wednesday that their positions will be eliminated by Aug. 31. A company spokesman would not say how many people are involved in the first round of cuts, however, or even how many people Canon Business Machines employs. Business directories say the company has about 550 workers at its Costa Mesa headquarters.
“I have a prepared statement, and that is all I can say,” said David S. Shiffman, senior director for administration. Officials at parent Canon USA Inc., a holding company in New York, also would not comment. The Canon companies are U.S. subsidiaries of Canon Inc., a giant Japanese manufacturer of copiers, cameras and related products.
A manager who asked not to be identified said salaried employees at the Costa Mesa plant on Red Hill Avenue were told late Tuesday that a significant portion of the company’s remaining production will be moved to a so-called maquiladora plant in Tijuana. The plant, which was built in the late 1980s, now turns out Canon electric typewriters. Maquiladoras are foreign-owned factories built in Mexico to take advantage of that nation’s plentiful supply of inexpensive labor.
The management employee said that Canon plans to keep its research and development division, marketing staff and a small manufacturing operation in Costa Mesa and estimated that as many as 300 jobs could be lost if the rest of the operations are transferred to Mexico.
Some employees will be offered voluntary termination programs, the employee said, and others will be laid off.
The Canon Business Machines manager said that sales of Canon’s personal word processors, typewriters and copier toner and duplicating fluid drums--all products now being made in Costa Mesa--have been slipping for the past 18 months in the face of a national recession and increased price competition from competitors like Brother International, IBM and Xerox Corp.
“They told us they are trying to cut costs because our losses are too high and we have no new products coming out, so they are taking most of the remaining products that we make (in Costa Mesa) and moving production to the Mexican plant,” the manager said.
Shiffman said in his statement that the first group of employees to be affected by the reorganization were told of their fate Wednesday morning. A second group “will be notified Sept. 1 that their last day will be sometime in early November,” he said.
He said Canon Business Machines officials are “uncertain about the exact number of CBM employees who will be affected” and would not comment on any of the information provided by the management employee.
Shiffman did say that “employees at all levels,” including management, will be affected by the layoffs and termination program.
Canon, which opened the facility in 1974, is not shutting down, Shiffman said. “We will continue to be a major part of the business community in Costa Mesa.”
Canon was one of the earliest of the giant Japanese manufacturing concerns to locate a facility in Orange County, which today is home to a large group of Japanese businesses, including Canon Computer Inc., Toshiba American Information Systems Inc., Ricoh Electronics Inc., Mitsubishi Electronics, Mazda Motor of America Inc. and Mitsubishi Motor Sales of America Inc.
