100 facing loss of jobs as Axalto plant shuts

Business Digest

September 01, 2006|By Allison Connolly | Allison Connolly,sun reporter

About 100 workers at the Axalto factory in Owings Mills, which manufactures "smart cards" embedded with microchips that store customer data for banking and other sensitive transactions, will lose their jobs, the plant's new owner announced yesterday.

Axalto's new parent company, Netherlands-based Gemalto, decided to consolidate operations at an existing plant in Montgomeryville, Pa., and will close the 43-year-old plant in Owings Mills Feb. 28.

The closing comes less than two years after the former French owner spent $4 million on a "clean room" that would enable the plant to do more sophisticated microchip manufacturing. Last year, company executives told The Sun that the Owings Mills plant was a prized asset for its proximity to a key customer, the federal government, and for its highly skilled work force.

On track to produce 60 million smart cards last year, they said they wanted to expand the plant and employ as many as 175 people by this year. At the time, the most highly skilled worker, a machine operator, made $15 an hour.

The plant's ownership changed in June when Gemalto NV was formed by the merger of the world's largest digital security rivals, Axalto Holding NV, of Montrouge, a suburb of Paris, and Luxembourg-based Gemplus International SA. Last year, the companies had combined earnings of $2.2 billion and 11,000 employees, with operations around the world.

Ernie Berger, president of Gemalto North America, said Gemplus has larger factories around the world that do what Axalto does here in Maryland. The plant's manufacturing equipment will be moved to a former Gemplus plant that has room for expansion, he said.

The Owings Mills operation was founded in 1953 by Baltimore-area resident Howard Verbit as a laminating business called Maryland Laminating Co., or MALCO. The plant was built in 1963, and became a large manufacturer of magnetic-striped credit cards, producing 250 million cards at its peak in 1996. Around that time, the company began making smart cards under owner Schlumberger Ltd., which spun it off as Axalto in 2004.

Workers in Owings Mills will be given severance packages, and those who stay with the company through the next six months will receive bonuses, Berger said. While he said they could apply for jobs in Pennsylvania, Berger said it is unlikely many workers would want to move or make the two-hour commute each way. The company will offer workers job counseling and help with their resumes, he said.

Berger said the company will terminate its lease on the 55,000-square-foot building.

It was a difficult decision to close the plant, he said, but one that made sense.

"I believe this is a disappointing turn of events in terms of the community's fabric," he said yesterday from his Washington-area office.

Louis Bisasky, the Owings Mills plant manager and company veteran, declined to comment yesterday.

allison.connolly@baltsun.com

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