NEW YORK (Dow Jones)--Sony Corp. (SNE) said Tuesday that it is closing a compact disc manufacturing plant in Pitman, N.J., resulting in about 300 layoffs. The plant's operations will be moved to another Sony-owned manufacturing plant in Terre Haute, Ind., which makes DVD and Blu-ray discs, according to Lisa Gephardt, a spokeswoman for the company.
The closing, scheduled for March 18, will mark the end of Sony DADC, the largest employer in Pitman--a town of just over two square miles with a population less than 10,000. The factory began operations in 1960 as a manufacturer for Columbia Records.
Pitman Mayor Michael Batten, a Republican, said the plant closing would deal a painful blow to the small borough with the motto: "The Small Town With A Big Heart." He estimated the cost of the closing to the town's annual budget of about $400,000, making it a small-scale example of the fiscal pain that is playing out for governments across the U.S. as tax receipts dwindle.
Sony's move comes in response to the continuing U.S. economic malaise, which has weighed heavily on the nation's manufacturing sector, and reflects the decline of the music CD, which has been eclipsed by digital music services, like Apple Inc.'s (AAPL) iTunes store.
Physical media products, like CDs and DVDs, have suffered generally as consumers gravitate toward digital media alternatives, a trend that is disrupting many traditional media business models.
The plant is owned by Sony Corp. of America, a holding company owned by Sony Corp., a consumer electronics, media and entertainment empire based in Japan.
Gephardt said the closing reflects Sony's efforts to reduce costs in its supply chain network "in order to remain competitive."
Batten, Pitman's mayor, said he'll meet soon with his economic development team to try to devise enticements that could lure a new employer to the 72-acre factory lot that Sony will leave behind.
Shares of Sony were recently up 0.4% to $36.02.
-By Nat Worden, Dow Jones Newswires; 212-416-2472; nat.worden@dowjones.com
