Compaq closes DEC plant

Compaq Computer announced that it will close one of the factories brought into the company when it acquired Digital Equipment and will move the plant's production to California and Texas.

Compaq announced that production at the site in Salem, New Hampshire, will end within six to nine months. The production of high-end servers based on Digital's Alpha microprocessors will be moved to Fremont, California, where NonStop Himalaya servers are produced.

That Himalaya technology, obtained by Compaq though the acquisition of Tandem Computers also will use Alpha chips in the near future, according to the company. So far the Tandem technology has been based on another chip in the RISC (reduced instruction-set computing) family, from MIPS Technologies.

The rest of the Salem production -- low-end servers and workstations -- will be moved to Compaq's factory in Houston.

The decision to close the Salem plant is simply a matter of relocation -- to achieve a more efficient production and supply chain system -- and has no implication on the production volume of the former Digital products, according to Alan Hodel, a Compaq spokesman.

The shutting of the Salem plant affects 900 employees. Some of the employees will be offered relocation to Fremont or Houston, and the remaining will be offered benefits packages, outplacement services and other forms of assistance, according to Compaq.

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