Technical Insight
Corning closes Nashua Lasertron facility before it opens (Headline News)
Corning will make significant cuts to its Photonic Technologies business in response to what the company describes as severely reduced market demand for photonic components and modules. The plan involves closing three plants, including the Corning Lasertron facility in Nashua, New Hampshire, which was scheduled to begin manufacturing active components this summer. "With the dramatic reduction of infrastructure spending across the telecommunications industry, and our expectation that this market downturn could last 12 to 18 months, we are taking decisive action to lower costs and improve the future profitability of our Photonic Technologies business," said John Loose, Corning s president and CEO. Nashua facility never finished Construction work at the Nashua facility began late last year, as part of an expansion of Corning Lasertron s capacity for active components. Funding came from a company-wide $225 million investment that included spending $45 million to double capacity at Lasertron s main facility in Bedford, Massachusetts. The investment was intended to greatly increase the production of 980 nm pump lasers used in EDFAs, as well as DFB and FabryPerot source lasers, and receivers. According to a company spokesperson, the Nashua building remains empty and was never opened; it is now being considered for sale. Corning will also close its photonic module facilities in Benton Township, PA and Corning NetOptix, a supplier of optical thin-film coatings and components with operations in Natick, MA. These changes will be completed by the end of the year. The company also intends to scale back production at Erwin Park, NY, which makes optical amplifiers, and across the remainder of its photonics operations. This will result in a workforce reduction of 1000. So far this year Corning has eliminated 3500 photonics positions, and with the current round of layoffs expects its total reductions in 2001 to reach 5900 around 15% of the 40 000 workforce. "Our Photonic Technologies business has grown at a rate of 75100% per year for the past three years, and we originally anticipated similar growth again this year," said Loose. "As a result, we added significant capacity and fixed costs to meet expected market demand that has not materialized." Corning now expects sales this year in the range of $600700 million for this business, with significantly lower sales of optical amplifiers and other photonic components. "The abruptness of this industry downturn is unprecedented," says Loose. "Nevertheless, we have to deal decisively with these new market realities."
