Aguadilla — Hewlett Packard’s decision to divest its PC business will not affect the sprawling manufacturing plant it has in this northwestern town, Lucy Crespo, general manager of manufacturing operations said Friday.
This is so because the operation, which has about 1,000 permanent and 400 employees under contract, has never made PCs for consumer use, but rather has historically focused on more high-end products, such as servers and networking products, she said.
“It is well-known that manufacturing in Puerto Rico has always been a challenge because we have to rationalize everything that we do here very well,” she said in an interview with News is my Business. “Manufacturing isn’t cheap, so we have to concentrate on activity that is highly technical, and high-end so that we make the best use of our resources.”
Palo Alto, Calif.-based HP said Thursday it will be reeling its business back into what it was in its early beginnings, a software and services company, rather than a PC maker. By removing the PC business from its portfolio, it will no longer pump any resources into its desktop, portable or tablet devices, focusing instead on the corporate market.
Re-focusing to ride change
That re-shifting will benefit the 68-acre Aguadilla site, where all types of hardware products for the enterprise sector that are sold throughout the Americas and around the globe are made.
Furthermore, she said staying one step ahead and adding new lines of business to the plant are driving the longevity of the 31-year-old operation and sparing job cuts.
“As with most technology, some of our lines of business have a defined life cycle, so we’re constantly looking to see what we can do next, to be able to maintain and possibly expand our Aguadilla operation,” said Crespo. “For example, in May, we began our newest business, which is handling all of the refurbishing work for HP’s high-end servers, networking and storage equipment.”
That new opportunity enabled HP to save about 70 jobs that otherwise may have been lost as other products ran their course, she said. HP Aguadilla invested close to $1 million to prepare an area of its manufacturing division to house the new line of work.
Another area that HP has recently integrated is manufacturing of its Tipping Point networking platform, for which it invested about $1.5 million last year. The cutting-edge system is designed to, among other things, prevent intruders from breaking into a client user’s systems.
“We’ve had to adapt to change. Evolution before change and the speed with which that change is made is the secret, coupled with innovation, to the success of these operations and of HP in general,” said Paul Hargen, general manager of HP’s imaging and printing group.
CDs, DVDs and ink for P.R. and the world
During a tour of the five-building plant Friday, HP executives offered some insight into what it takes to manufacture its networking components, software media, commercial inks, and printer supplies.
During one stop of the tour, Julio Cartagena, product engineering manager for ink production, explained that Puerto Rico plays an important role in global distribution of the printing products, as about 40 percent to 50 percent of the world’s demand for HP ink is filled in Aguadilla.
“Our typical clients own print shops and are industrial customers. We don’t manufacture ink for consumer use,” he noted.
Another area that HP Aguadilla manages almost completely for the company is the production of digital media — DVDs and CDs — that are packaged along with both consumer and enterprise products, Crespo said.
“More than 90 percent of HPs software is produced here,” she noted. “HP has made several acquisitions recently to strengthen its software business, and as a result, we expect to be able to continue strengthening our labor force in that area as well.”