Philips Consumer Electronics Co. in Knoxville, Tenn., announced it plans to sell its Greeneville, Tenn., manufacturing facilities, including an injection molding plant. The Greeneville operations include a television production plant, the injection molding plant, a printed circuit board plant, logistics warehouses and service refurbishing plants.
The firm has notified about 2,000 employees that they will be laid off. Philips spokesman Jayson Hill said the layoffs are an annual event resulting from the completion of the firm's production goals for the selling season.
The mass layoff will begin Dec. 2 and continue through Dec. 31, the notice said. This year, however, if the sale goes through as expected, Philips will not be the company doing the rehiring.
The firm declined comment on the potential buyer, but Hill said the new owners will continue to manufacture for Philips on a contract basis. Due diligence is under way and Hill said he expects the sale to be completed shortly after the first of the new year.
In June, Philips completed moving its injection molding operations from Arden, N.C., to Greeneville, consolidating that unit with its other manufacturing plants in Greeneville. The plastics operations produces cabinets for the company's Magnavox line of televisions.
At that time, a company spokesman said the move would improve efficiency and competitiveness.
Philips made the decision to divest itself of its manufacturing operations about 60 days ago, but Hill said that does not necessarily reflect any type of trend for the company to be anything other than a manufacturer.
``Philips is very involved in manufacturing in other parts of the world,'' commented Hill, ``and is a television manufacturer.''
Hill cited the downturn in the market for televisions since 1994, and the fact that ``the factory has significantly underutilized capacity.''
Philips' hope is that the new owners will use the facilities' capacity fully to provide not only products for Philips, but also for a range of other original equipment manufacturers in other industries. This would even out the manufacturing and offset the cyclical nature of the consumer electronics industry and permit the permanent rehiring of many of the personnel that worked at the plant, which Hill anticipates the new owners will do.
``We believe that this will be good for the factory, the personnel and Philips,'' Hill said.
Philips designs, manufactures and markets Philips and Magnavox consumer, professional and commercial electronics products, and is a unit of Philips Electronics North America Corp.