HP plant to bounce back from layoffs

By KRISTY DORSEY
Published on 20/05/2012 00:00

IT WAS once one of the flag-bearers for Scotland’s “Silicon Glen” electronics industry before manufacturing of computer terminals was switched to the Czech Republic and hundreds of workers were laid off.

Now the giant Hewlett-Packard (HP) facility at Erskine, on the outskirts of Glasgow, is being given a fresh lease of life, with recycling facilities for electronic equipment replacing the PC production lines of old.

Like many multinational tech firms, New York-listed HP refuses to comment publicly on employment figures at individual plants.

However, insiders at Erskine believe the 54,700sq ft site could be “full” again by 2014, just five years after 700 jobs were axed.

Globally, HP is ditching low-margin production in favour of offering customers higher-end sales and services functions, such as Erskine’s “technology recovery centre”.

Operating as part of HP’s financial services division, the recycling centre will take advantage of the rising tide of electronic waste, which is expected to grow from 41.5 million tonnes in 2011 to 93.5 million tonnes by 2016.

The Scottish centre will take redundant IT kit off the hands of large companies and government bodies in the UK and Europe.

Such organisations are growing increasingly concerned about protecting the data lingering on equipment due for disposal, while also complying with environmental regulations.

HP reckons that the recycling market is currently worth about $7.5 billion (£4.7bn) in potential revenues. The secured facility within the Erskine plant has room to double from its current size of 8,400sq ft, should demand increase.

The recovery centre employs about 60 people, some of whom formerly worked on the assembly lines.

These jobs are in addition to the 240 IT services posts created so far, with £7 million of Scottish Government funding awarded in 2010. In total, 700 jobs will eventually be created through the grant.

Maggie Morrison, assistant general manager at HP Scotland, said the centre was the latest evidence of HP’s “ongoing commitment” to the Renfrewshire plant.

“Erskine is now back on the strategic site list for HP worldwide because of the skills base we have here, plus the cost base and the fact that this is a great place to work and live,” Morrison said.

Other operations and functions could be added to those already carried out at Erskine. One of several possibilities being considered is an increase in services to support small businesses.

“It is all up for discussion right now, since we have been full steam ahead on the IT services project and the recovery centre,” Morrison said.

At its height under original owner Compaq, about 2,500 people worked at Erskine. That number is thought to have slumped to as little as perhaps 500 following the announcement in 2009 that HP would transfer 700 manufacturing jobs to the Czech Republic in a series of layoffs that concluded last year.

The move from manufacturing to servicing has paid dividends for both IT firms and large industrial players, such as Rolls-Royce, which generate profits from long-term servicing contracts for its engines and turbines.