Staff shocked as Corning shuts Melbourne fibre optic plant

Corning announced two plant closures, one in Melbourne and the other in Germany, after it had unveiled a US$260 million third quarter loss, the company's sixth consecutive quarterly loss.

The closure of the Noble Park optical fibre plant in Melbourne came as a surprise to local management. While Corning Australia officials had been aware that the corporation was reviewing its global operations, there had been no hint that the facility and its staff had been at risk.

A Corning Noble Park spokesman said the facility was expected to be shut withing two to four months. Corning's other Melbourne-based fibre-optic facility at Clayton is expected to remain open.

About half of the 130 Corning staff at Noble Park were employed in either production or technical roles, with the rest employed in managerial, engineering, professional or maintenance roles.

Corning said in the US that it intended cutting 2,200 staff, or 8.5 percent, from its global workforce - including those at the Melbourne and German plants earmarked for closure.

The company had battled falling revenues. Sales for the most recent third quarter had plunged to US$837 million from US$1.509 billion in the year-ago quarter.

The telecommunications industry downturn has left the Corning global operation badly scarred. The company is shedding 4,600 jobs this calendar year globally, in addition to the more than 12,000 it reduced its numbers by last year.

Corning said it would take a US$550 million to US$650 million charge to close the Melbourne and German plants by early next year. It also plans to close temporarily fibre optic plant in North Carolina, transferring some operations across to another Corning facility.

The cutbacks were "designed to protect Corning's long-term financial health and move us toward our goal of returning to profitability in 2003," chief executive James Houghton said.