Positronic Industries Inc. is investing $2.5 million into its northwest Springfield plant as the manufacturer consolidates portions of its operations in Mount Vernon and Puerto Rico.
Company President and CEO John Gentry said the investment would pay for new equipment at its 1325 N. Eldon Ave. plant. The manufacturer of electronic connectors and cable assemblies plans to hire 90 employees at the plant located near Springfield-Branson National Airport, in addition to workers brought in from its other North American facilities.
Springfield Business Journal reported last fall on Positronic’s plans to consolidate the majority of its Mount Vernon operations to Springfield.
The Springfield Business Development Corp. on March 1 highlighted the Queen City expansion plans in an investor brief e-newsletter. Positronic worked with SBDC to secure local tax abatement for the new equipment purchases at its North Eldon Avenue plant.
Gentry said 40-50 people still work in Mount Vernon in molding operations. It had employed 120 before the decision came last year to move its component manufacturing to Springfield.
Gentry said some workers could relocate to Springfield by way of Puerto Rico.
“It’s a winding down process,” he said of the Puerto Rico plant. “We’re still in negotiations with Puerto Rican authorities and some personnel down there to see where this leads.”
Gentry said the negotiation process entails re-evaluating the use of its Puerto Rico plant and assets, as well as the cost of rent.
Positronic may continue to manufacture components in Puerto Rico, pending the discussions, he said.
Gentry has said the moves from Mount Vernon reflect changes in the technology and manufacturing industries.
“We needed to consolidate to save some costs,” Gentry said in October, declining to disclose specific figures. “It’ll mean a few percent to our bottom line.”
Positronic 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 employs roughly 800 worldwide, with additional plants in France, Singapore and India, according to its website.
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