Lexmark shutting down Cebu assembly plant in ’15

CEBU CITY—About 1,000 workers will be affected by the closure in 2015 of Lexmark International Philippines Inc. (LIPI), an inkjet cartridge assembly plant operating at the Mactan Economic Zone II (MEZ II) in Lapu-Lapu City.

Lexmark has announced it would shut down its inkjet supplies manufacturing facility in MEZ II as part of the company’s restructuring program.

With the restructuring, Lexmark will cut 1,700 jobs worldwide, including 1,100 manufacturing positions, mostly in Cebu.

A source at LIPI said the workers were saddened by the company’s decision but that they had accepted it.

The Inquirer was unable to get a comment from LIPI officials who were meeting the whole afternoon on Wednesday.

Department of Labor and Employment (DoLE 7) regional director Ma. Gloria Tango said the company had yet to send a formal notice on the closure plan.

However, DoLE 7 assistant regional director Lilia Estillore said Lexmark human resources manager Ely Trinidad had confirmed the planned closure.

In cases of closure, a company must inform the DoLE office one month before the effectivity of the closure or the retrenchment of the employees.

Estillore said that the company should also ensure that the termination benefits would be given to employees, which should include half a month salary for every year of service, 13th month pay, unused leave pay and other perks or benefits.

The DoLE 7 office would assist the retrenched workers, she said.

Estillore said the terminated workers could form a cooperative so they could be given funding or livelihood grants for feasible projects. The DoLE will also provide training for the workers to ensure the sustainability of the livelihood projects.

Lapu-Lapu City Mayor Paz Radaza, on the other hand, said the closure would jack up the city’s unemployment rate.

Since Lexmark has been paying huge taxes to the city, the company’s closure is also expected to affect the city’s revenue, the mayor said.

In a statement posted on its website, Lexmark said it would stop the development and manufacturing of the inkjet printers but that it would continue providing services and aftermarket supplies for its inkjet installed base.

“The announcement represents difficult decisions, which are necessary to drive improved profitability and significant savings,” said Paul Rooke, Lexmark chairman and chief executive officer.

The company explained that the full implementation of its restructuring actions would result in annual savings of $95 million.

Rooke said the company would focus on higher value imaging and software solutions.

The LIPI was established at the MEZ II in 1999. The facility supplies inkjet cartridges to the Asian market.

The other Lexmark facilities in the Philippines are the Lexmark Research and Development Corp., a research and development laboratory; and Lexmark Cebu Shared Services Center, which provides bundled global support services. Both companies are located at the Cebu Business Park in Cebu City.