Hitachi closes hard drive plant in Mexico

Factory closure will leave 4,500 out of work.

Hitachi has announced that it will be closing its Guadalajara manufacturing plant in Mexico.

The move will result in the loss of roughly 4,500 jobs from the company's hard drive manufacturing branch.

The closure is part of an effort to cut more than US$300M from the budget for Hitachi Global Storage Technologies (GST) over the next five years. The cuts amount to roughly 11 per cent of Hitachi's total workforce.

The Guadalajara plant had been responsible for manufacturing the slider components of the company's hard drives, which carry the read/write heads that manipulate stored data.

Hitachi plans to shut the plant down completely by the middle of 2008.

"After more than a decade as part of the Guadalajara community we are extremely saddened to have to move our operations, but the challenges of our business are making this necessary for our survival," said Hiroaki Nakanishi, chief executive at Hitachi GST.

The company also plans to close down its manufacturing facility in Odawara, Japan by the end of this year. That facility will continue to be used for research and development.

Aside from the reduced overheads that will come from closing the factories, Hitachi also hopes that the move will consolidate production and reduce shipping costs.

Production of the sliders will be moved to the Philippines, which the company hopes will reduce the cost of getting the parts to the final hard drive assembly facilities in Thailand and China.