Hasbro Inc., which shut an Amsterdam, N.Y., plant in November 1996 and moved its operations south to El Paso, Texas, now is moving that facility's injection molding and finishing production to Tijuana, Mexico, eliminating 700 jobs.
Wayne Charness, a spokesman for the Pawtucket, R.I.-based toy maker, said in a Nov. 25 telephone interview that 500 of the plant's employees would be let go in mid-January and the other 200 in June. He said the plant does metal stamping and injection and blow molding of Tonka toys and Playskool products.
Bob Perry, administrative assistant for El Paso County, said a Hasbro official attributed the closing to the competitive nature of the toy industry. The firm will maintain a distribution center in El Paso with about 100 employees, Perry said Nov. 25.
``This closure will certainly have a big impact on the employees, but also on the subcontractors and others who sell services to Hasbro,'' he said. ``Add all this to the fact that El Paso unemployment has been hovering around 11 percent.''
Hasbro acquired the El Paso plant in 1991 as part of its purchase of Tonka Corp. Since then, Hasbro has used the facility mainly to produce Tonka and Playskool toys.
Sean McGowan, senior vice president of research at New York-based investment firm Gerard Klauer Mattison & Co. Inc., said Nov. 26 that since the 1991 Tonka acquisition, Hasbro has converted at least some of its steel Tonka truck production there to plastic.
``Hasbro has been hinting strongly for months that it plans to take a series of sweeping steps to dramatically lower its costs. These include capacity reductions, exiting unprofitable markets and `better leverage of overhead,' which could mean head-count reduction in Pawtucket, R.I., and elsewhere,'' McGowan said.
According to Securities and Exchange Commission documents, Hasbro maintains three warehouse and manufacturing facilities in El Paso. The property includes a 373,000-square-foot building owned by the company and more than 1.1 million square feet of leased space.
A Nov. 18 El Paso Times report quoted a company official as saying the Hasbro workers have been certified to receive financial aid as workers displaced by the North American Free Trade Agreement. In addition to its Tijuana plant, Hasbro also operates a faciility in Ju rez, Mexico.
According to the newspaper, the Texas Workforce Commission said El Paso has had more workers displaced by NAFTA than any other U.S. city. The state estimates that number at 6,000-8,000 workers.
Hasbro on Oct. 20 reported record third-quarter net revenues, earnings and earnings per share for the three months ended Sept. 28. Meanwhile, its 1997 nine-month net earnings are up 15.1 percent to $116.1 million and sales have risen 8.4 percent to $2.1 billion over the comparable year-ago period.