Mulay Plastics Inc. intends to close its Casa Grande, Ariz., manufacturing facility and transfer remaining work to Tijuana, Mexico. "Casa Grande is not close enough for our customers," Jack Shedd, executive vice president, said in a telephone interview.
The transition should be complete by April or May.
The decision was the result of rapid changes in the global market for computers. As recently as last year, Mulay had invested about $6.5 million to upgrade the Casa Grande equipment, Shedd said. Ube Machinery Inc. supplied Mulay with all-electric, robot-equipped injection molding presses — eight with clamping forces of 1,000 tons and 12 with 500 tons.
"We made a commitment to retool the facility" for tight-parameter polycarbonate molding of second-generation iMac computer monitors," he said. "We made the investment on the premise we would be making 100,000 iMacs a month. We're making 20,000."
Casa Grande is running at 30 percent capacity, and there is "no light at the end of the tunnel," Shedd said.
A unit of South Korea's LG Electronics Inc. assembles the iMacs for Apple Computer Inc. of Cupertino, Calif. LG's Mexicali, Mexico, site is the Casa Grande plant's last major customer.
Apple introduced a major redesign in October and subcontracted with LG to produce the iMacs in Mexico, South Korea, Singapore and Wales. Subsequently, a new China site and seasonal demand have reduced production requirements in Mexico.
Today's market demands agility on the part of plastic parts suppliers, Shedd said.
The Casa Grande plant opened in 1988, reflecting a vision of founder Sam Mulay to serve television manufacturers' Mexico assembly sites in Tijuana and Ciudad Juarez from a single location.
"Over the last five to six years, customers demanded we be closer," Shedd said.
Mulay opened plants in Tijuana in 1996 and Ciudad Juarez in late 1998.
Production of television housings for Philips Consumer Electronics Corp. moved to Ciudad Juarez from Casa Grande in early 1999.
Mulay tried to persist.
"Doug Mulay felt he owed a lot to Casa Grande," Shedd said, referring to the company's president and founder's son.
The Casa Grande facility employs 105, down from 330 in mid-1998. Mulay will offer new positions elsewhere to 15-20 workers, including eight members of Mulay's iMac transition team who will go to Tijuana. The three-building campus in Tijuana occupies 180,000 square feet, including 60,000 square feet added last year.
Mulay, which is based in Addison, Ill., also has facilities in Holly Springs, Miss., and Forrest City, Ark. It employs a total of 1,400.
Some of the Casa Grande equipment will follow iMac to Tijuana, and the remainder will go to other Mulay plants. Mulay intends to sell the 140,000-square-foot Casa Grande plant.
Shedd said Mulay Plastics had 1999 sales of $110 million, and he projects $130 million this year.