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March 4, 2014

Sony DADC cutting 34 distribution jobs here

Work to be transferred to Bolingbrook, Ill., facility

TERRE HAUTE — Sony DADC is halting product distribution operations from its Terre Haute plant at a cost of 34 jobs, a company official said Tuesday.

The compact disc, DVD and Blu-ray digital media manufacturer said distribution work that currently takes place from the Fruitridge Avenue plant will move to an established Sony DADC distribution facility in Bolingbrook, Ill., southwest of Chicago.

The last day of employment for impacted workers will be June 1, said Lisa Gephardt, a company spokeswoman in New York.

Employees at the Terre Haute plant were notified of the move Tuesday, according to sources who chose not to be identified. Eligible employees were to receive severance packages, they said.

Bolingbrook is primarily a distribution center; Terre Haute is primarily for manufacturing, Gephardt said. “So we’re just relocating our distribution services from Terre Haute to Bolingbrook, where they have the capacity to absorb that work.” No new jobs were expected to be created at the Bolingbrook plant due to the move, she said.

“Bolingbrook has the capacity to absorb that work, which is probably another reason for the realignment,” she said.

One year ago, Sony closed a CD distribution operation in Carrollton, Ga., also transferring the work to Bolingbrook. That moved cost more than 120 jobs. The company cited economic challenges for that closure.

The decision to close the distribution wing of the local plant has no implications for the overall Terre Haute operation, Gephardt said. Terre Haute remains Sony DADC’s manufacturing base in the U.S., she said.

Sony DADC, which employs about 1,400 people at its Fruitridge Avenue facility, has closed manufacturing operations in other cities and moved them to Terre Haute, Gephardt noted. “We shifted manufacturing operations [to Terre Haute] from other plants. So [Terre Haute] really is our manufacturing headquarters,” she said.

In the past few years, Sony DADC halted CD and DVD manufacturing at a plant in Pittman, N.J., transferring that work to Terre Haute. In 2012, Dave Rubenstein, president of Sony DADC Americas, part of Sony Corp., called Terre Haute the company’s “flagship production location.”

In 2011, Sony invested nearly $72 million in the Terre Haute plant for improved Blu-ray manufacturing, also adding about 100 new jobs. In 2005, the company invested $81 million in the local plant – setting up Blu-ray equipment manufacturing and adding 90,000-square-feet of Blu-ray production space.

Sony, which made the world’s first music CD in 1982, opened its Terre Haute operation in 1983 with an investment of $21 million, employing just 100 people and making 3,000 discs per month. It now employs 14 times that number and makes more than 60 million CDs, DVDs and Blu-ray discs per month here, according to the company’s website.

Sales of physical audio and video discs have declined 30 percent since their peak in 2004, according to a July 2013 article in Forbes by industry observer Dade Hayes. However, revenue for those products has remained stable, he stated, adding he is optimistic about the future of CDs, DVDs and Blu-ray discs.

“These little silver objects,” Hayes concluded, “will continue to matter to media companies for many years to come.”

The price of Sony’s stock (NYSE: SNE) remained nearly unchanged Tuesday in light trading.

Reporter Arthur Foulkes can be reached at 812-231-4232 or arthur.foulkes@tribstar.com

 

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