What Does Intel’s Factory Shutdown Mean in Massachusetts?

Intel

Hudson, Massachusetts, is about to have a lot of unhappy Intel (NASDAQ:INTC) workers on its hands, because the chip manufacturer announced Thursday that it is closing its only factory in the state, resulting in the loss of 700 high-paying manufacturing jobs. Workers will be offered a severance package and will receive assistance finding new jobs, but for many, the news is still devastating, especially considering one of out three factory jobs in the state is in the high-tech manufacturing sector.

According to the Boston Globe, Intel is closing its Hudson plant on account of the factory’s outdated technology and chip products that are only able to be used in low-end applications. The world’s largest leading chipmaker bought the plant from Digital in 1997 for $700 million, but Intel usually designs its chip factories from the ground up in order to construct identical chip-making technology, and that’s why the Hudson plant stands out.

Its machinery is more than a decade old and can only produce chips used in relatively low-end applications like automotive entertainment systems and factory automation equipment, according to the Boston Globe report. Thus, as Intel turns its attention to the more lucrative divisions of its business, specifically high-end microprocessors used in PCs and tablets, it now is planning to close its outdated plant that Nathan Brookwood, a chip industry analyst for Insight 64 described to the publication as “always the odd man out.”

Intel is adamant that the factory closing has nothing to do with Hudson’s workforce or the state of Massachusetts in general. However, it still comes as a significant blow to the area, which has seen its job growth slow in recent months. The Boston Globe reports that manufacturing is still a highly competitive industry in the state, but Intel accounts for many of the high-tech manufacturing jobs that pay $80,000 a year or more.

Without the factory, Massachusetts’s manufacturing employment will drop significantly, even in the midst of Gov. Deval Patrick’s recent efforts to boost manufacturing in the state.

Intel is planning on closing its Hudson factory’s doors by the end of 2014, but the company confirmed to the Globe that it will begin laying off its workers in stages, with the first 100 to go over the next three to four months. A significant portion of the workforce will remain until the plant is closed so the factory can still run near full capacity, but at the end, workers will be entitled to a severance package and two months to find other jobs at Intel.

As of now, the chip manufacturer is hopeful it can secure a technology company buyer that will keep the Hudson plant open as a factory, thus continuing to employ laborers there. The Boston Globe spoke to Christopher Sandini, the interim executive assistant for Hudson maintaining, who said, “They have the best real estate people, and they’re going to try to market the portion of the facility that’s shutting down to get the best value they can,” but it is still unclear whom the next buyer will be.

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