Positronic shifting most of Mount Vernon operations to Springfield

John Gentry: Consolidation will positively affect profitability.

RELATED

Business Spotlight: SHARP as a Tack

Positronic Industries Inc. plans to move the majority of its Mount Vernon operations to its plants in Springfield, according to a Sept. 20 Worker Adjustment and Retraining Notification Act notice filed with the state.

John Gentry, the company’s president and CEO, this morning confirmed the shift of all but the Mount Vernon plant’s molding operations to its Queen City locations at 423 N. Campbell Ave. and 1325 N. Eldon Ave. About 93 employees are affected, he said, and all have the opportunity to transfer to Springfield. Otherwise, they’ll be let go. The action is scheduled to occur around Dec. 1, according to the WARN notice issued to the state Department of Economic Development.

“We needed to consolidate to save some costs,” Gentry said, declining to disclose specific figures. “It’ll mean a few percent to our bottom line.”

The manufacturer of electronic connectors and cable assemblies has watched large portions of its business shift overseas as clients, most notably Honeywell International Inc. (NYSE: HON), move operations to Asia.

“Over the last 15 years, American companies have moved manufacturing technology to Asia. The cost to manufacture in China, for example, is significantly less than in the U.S.,” Gentry said. “We have hunkered down for all these years, still thinking that business was going to come back. We found ourselves with three operations in Missouri, and we weren’t as efficient as we needed to be.

“We’re not able to serve the market in Asia from Missouri.”

Still, about half of Positronic’s revenue comes from North America, he said, noting the Springfield plants are critical.

The company’s defense contractor clients, such as Lockheed Martin Corp (NYSE: LMT), for instance, typically require products made in the United States when selling to their own North American buyers.

“A military manufacturer can’t export product without government approval,” Gentry said. “They want to maintain the ability to manufacture product so our country can defend itself. We don’t want to rely on foreign sources.”

Positronic’s Mount Vernon plant currently employs around 120, less than the 264 staff members in Springfield and 800 around the world. With the change, Gentry said about 30, including temporary workers, would remain in Mount Vernon.

Positronic, which opened its Mount Vernon plant at 601 W. Hayward Drive in 1999, also has operations in Puerto Rico, France, Singapore and India, according to its website. Declining to disclose revenue, Gentry said Positronic grew its global sales by about 7 percent during its fiscal year that ended in August.