MANCHESTER — Osram Sylvania's decision to close its Manchester operation and lay off 139 employees, citing declining sales of traditional lighting products, has some observers scratching their heads, since the Manchester plant does not manufacture conventional light bulbs.
"I was surprised about the Osram closing in Manchester," wrote William D'Alessandro, executive editor of crosslandsbulletin.com, based in Amherst.
Crosslands provides information and analysis on corporate environmental issues and sustainable development.
"The plant (in Manchester) does not make lights that are replaceable by LEDs," he wrote in an email to the Union Leader. "The last I knew they made big lights that go on streets and in commercial warehouses and so on. So the question is where does Osram intend to source those devices if not in Manchester anymore?"
The answer, according to an Osram spokesperson: Mexico and China.
The Manchester plant on South Willow Street was built in 1956 and operated by Osram since 1960, according to Anne Guertin, a company spokesman based at U.S. headquarters in Danvers, Mass. Plans are for the land and building to be sold, she said.
"It has functioned as a high-intensity discharge (HID) lamps assembly and laboratory," she said. "Transfer of some of these production lines and equipment will be to other Osram locations in Jaurez, Mexico and Foshan, China, where they will be sourced in the future."
The company acknowledged in May of last year, when it laid off 49 workers at the Manchester plant, that the work was being transferred to a plant in the Mexican city along the Texas border.
At the time, Guertin said three lamp finishing production lines would remain in Manchester, which would continue to provide components for lamp finishing to other plants.
"We had two plants that were under-utilized, so we are moving one line and combining them (in Mexico)," she said at the time.
Wednesday's announcement continues a pattern of shifting work from Manchester to Mexico. The company's manual-mount lighting production line was shifted to Juarez from Manchester in 2008.
The Manchester plant may not make 60-watt lightbulbs, but there is a declining demand for the products it does make, prompting the consolidation, according to Osram.
"The dynamics in the market place are moving toward more energy-saving products, per legislative requirements and global advances in solid-state lighting," she wrote in an email on Thursday. "This has shifted the traditional lighting business from a growth to a declining market. We need to take these actions in order to remain competitive and to strategically realign our resources to invest in our SSL (solid state luminaries) business."
The company is investing in solid state lighting and green technologies at North American facilities in Exeter and Hillsborough in New Hampshire, and at St. Marys, Pa., and Winchester, Ky.
"This demonstrates how we are selectively expanding and diversifying our portfolio in order to provide our customers with the right products and solutions to ensure their future growth," according to Guertin.
The Hillsborough plant in particular has been getting a lot of attention, after a March 18 press release from Ford Motor Co. highlighted the partnership between the automotive manufacturer and Osram on LED headlights.
"What sets F-150 LED technology apart is how the headlamps are made, and how superior they are from what the industry has traditionally used," said a Ford spokesperson. "To develop this cutting-edge headlamp technology, Ford leveraged the expertise of its longtime lighting developers OSRAM and Flex-N-Gate, creating 30 jobs in facilities in Hillsborough, N.H. and Sandusky, Ohio respectively."
The halogen bulbs that have been in use on most vehicles for years are similar to standard household light bulbs. Thin filaments inside the bulb last for about 40,000 miles before needing to be replaced. Extreme temperatures and vibration from washboard roads can shorten their life even further.
The new LED headlamp developed for the Ford F-150 uses semiconductor chips to control the light. The technology, which is simpler than halogen or HID, creates lights that are more durable and longer-lasting.
Osram, headquartered in Munich, Germany, has more than 35,000 employees and 53 production plants in 18 countries around the world. One of the state's largest manufacturing employers, the company will have approximately 800 employees left in the state at Exeter and Hillsborough.