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Thomson Shuts U.S. Tube Lines, Expands In China

6/23/2003 02:00:00 AM Eastern

In a move to expand manufacturing in China, Thomson will shut down two TV tube production lines at its plant in Marion, Ind., and will not invest to renew a glass line at its Circleville, Ohio, facility.

Calling U.S. TV tube and glass manufacturing "unprofitable" in a statement after a board meeting, Thomson said the decision to cut back was due to "significant market-share losses among local producers to competitive imports." The statement also said "demand and prices for TV tubes in the U.S. have declined sharply." According to published reports, by the end of the year 820 workers at the Marion plant will be permanently laid off, and another 400 will be laid off at its Circleville facility.

As for the move to China, Thomson restated in an April report that an agreement is in place to supply about 2 million tubes to the Changhong Group. A second tube line will open in Foshan during the third quarter of 2003.

The impact of expected losses in the Components Group, which operates Thomson plants worldwide, will be to reduce the Group's first half operating profit to 140 million to 150 million euros, or from around $165 million to $176 million. Full year operating margin will be 6.5 percent, a point lower than the previous target, and about a half point lower than what was achieved in fiscal year 2002.

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