Thomson Consumer Electronics announced Feb. 13 that it will close the last of its television assembly operations in the United States, moving that work to a new plant in Ju rez, Mexico.
The company's Bloomington, Ind., assembly facility and warehousing operations, and a plastic components molding plant and finishing operations in Indianapolis, will close.
In Ju rez, the firm will make RCA, GE, and ProScan brand color TVs at a new plant that includes a molding operation.
Richard Knoph, spokesman for Thomson, said molding equipment from the Indianapolis plant also will be relocated to Mexico.
Thomson uses some custom molders in the United States, but at this point Knoph said it is premature to discuss how the closures might affect them.
``We're talking to our suppliers to discuss future requirements,'' he said. ``It's likely that there could be some affect as a result of our decision to move the assembly operations to Mexico.''
Thomson has a long history of manufacturing in Mexico, going back more than 25 years. David Hakala, vice president of manufacturing operations for Thomson, said the company has ``resisted moving final assembly of larger-screen TVs there, unlike virtually all of our major competitors.'' The Ju rez plant is Thomson's third in Mexico.
In a prepared statement, Hakala said: ``The harsh financial reality of the business, especially in the last two years, dictates that we become more cost effective, or perish as the nation's leader in the television industry.''
As downward pricing pressures squeezed margins, most of the big names in TV manufacturing put plants in Mexico where labor costs are a fraction of what they are here. For example, in 1991 Zenith announced the elimination of 1,200 U.S. jobs when it transferred its TV assembly operations from Springfield, Mo., to Reynosa and Ju rez.
In 1992, Hitachi of Japan announced transfer of its TV assembly operations from Anaheim, Calif., to Tijuana. Goldstar of Korea announced a shift in its manufacturing from Huntsville, Ala., to Mexico.
Matsushita followed in 1994 as it transferred TV assembly from Franklin Park, Ill., to Tijuana, and two other TV giants, Toshiba and Samsung, both announced major production expansions at their Mexican plants.
In 1996, JVC closed a U.S. manufacturing facility employing 100, shifting that work to Mexico. Samsung opened a 7 million-square-foot TV, VCR and picture tube factory in Tijuana, and teamed with Asahi Glass and Corning Glass to build a $300 million TV glass factory in Mexico. Zenith announced elimination of 1,100 U.S. jobs, 25 percent of the company's U.S. workforce.
Last year also, Philips Consumer Electronics Co. of Knoxville, Tenn., announced it planned to sell its injection molding and assembly plant in Greeneville, Tenn. However, on the same day Thomson made its announcement, Philips announced its decision to phase out production and close that plant by mid-1998.
In a prepared statement, PCEC announced that although it had found a buyer for the operation, local union members rejected the buyer's contract proposal, ``necessitating our decision to phase out production over the next 16 months.''
Mitsubishi recently announced transfer of its TV production from California to Mexicali, Mexico, eliminating 380 U.S. jobs.
Even after Thomson's closure of the Indianapolis and Bloomington plants, it will remain the largest consumer electronics employer in the United States, providing more than 7,400 jobs. Thomson operates picture tube and associated glass engineering and manufacturing facilities in Marion, Ind., Scranton, Pa., Circleville, Ohio, and Lancaster, Pa., and a TV wood cabinet manufacturing plant in Mocksville, N.C.