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Idaho business leaders worried about Micron

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BOISE — Idaho market-watchers are expressing concern over the financial troubles of Micron Technology, the state's largest private employer.

The company's stock plunged this week to its lowest price in years after reports of dismal earnings Tuesday.

The losses, which triggered analysts to speculate publicly that Micron could be headed for some downsizing, will ripple into the local economy as the company's 10,500 southwestern Idaho employees go another year without bonuses and wait to cash in stock options.

"Micron is a cornerstone of our economy," said Gary Mahn, director of the Idaho Department of Commerce. "There are many companies, both in the Treasure Valley and in the state, that have Micron as a customer or benefit from wages paid to Micron employees."

Every Micron job in Ada and Canyon counties leads to at least two other jobs at companies doing business with Micron, according to the Idaho Department of Commerce.

On Tuesday, Micron announced record quarterly losses of $576 million. The company's stock nose-dived 18.8 percent Wednesday to $17.25.

Industry analysts began questioning whether Micron would need to lay off employees, but a Micron spokesman said there are no plans to reduce its work force. Micron has not laid off workers since 1985, when it let go half of its 1,250 employees during a downturn.

Business people contacted Wednesday said Micron employees have not stopped spending and acknowledged the semiconductor giant's importance to the local economy.

"It's not like when they were passing out $20,000 bonuses to their engineers, but their people are still buying cars with us," said Jim Cross, general manager of Lyle Pearson auto dealerships, which sell Mercedes, Volvo, Land Rover and Acura vehicles in Boise.

The memory chip industry is one of the most volatile technology industries. Manufacturers expand their production and build new plants when prices are high.

That leads to an oversupply in the industry, which pushes prices down. Once demand catches up with supply, and companies start making money again, the manufacturers build more factories and make more chips.

Micron, its employees and the local economy have been through this before. The company reported a loss of $69 million in 1999 and $234 million in losses in 1998.

"Micron is one of the most volatile stocks on the New York Stock Exchange," acknowledged Micron spokesman Sean Mahoney.

It is partly an acceptance of this volatility, and the fact Micron has weathered downturns before, that give many local market-watchers confidence the company will rebound.

"They've been down this road before and proven that they can survive," Mahn said.