Merger sparks UK job loss fear

Hundreds of UK manufacturing jobs could be lost in restructuring after last week’s £5.4bn merger of Compaq and Digital to become the world’s second biggest computer group. Globally, 15,000 jobs will be lost at Digital a quarter of its workforce and 2,000 shed at Compaq. Details of rationalisation of production had not been hammered out […]

Hundreds of UK manufacturing jobs could be lost in restructuring after last week’s £5.4bn merger of Compaq and Digital to become the world’s second biggest computer group.

Globally, 15,000 jobs will be lost at Digital a quarter of its workforce and 2,000 shed at Compaq.

Details of rationalisation of production had not been hammered out as The Engineer went to press, but the announcement raised fears that at least one of Digital’s Scottish plants may close.

Digital has factories in Ayr, Irvine and Livingston in Scotland, as well as in Reading, Berkshire, and the Republic of Ireland, accounting for 7,000 jobs.

Compaq’s 2,200 UK workers are mainly in the south-east of England, although it has a plant in Scotland, at Erskine, Renfrewshire.

Compaq expects the merger to create a $50bn (£30bn) turnover company by 2000. Last year Compaq’s total sales were $24.6bn, compared with Digital’s $13bn.

Compaq is embroiled in a row over the millennium compliance of its PCs. Dutch electronics giant Philips has threatened to cancel a multi-million pound order for Compaq PCs built at its Erskine plant because of doubts over whether the machines are year 2000 compliant.

Concern over Compaq equipment surfaced when millennium bug-fixing company Prove It 2000 complained to the Advertising Standards Authority about a newspaper advertisement implying that Compaq computers were bug-free.

An ASA ruling on the complaint is pending.