Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, April 13, 1993 TAG: 9304130070
SECTION: BUSINESS PAGE: B6 EDITION: METRO
SOURCE: MICHAEL STOWE STAFF WRITER
DATELINE: BLACKSBURG LENGTH: Medium
MILITARY'S LOSS MAY BE CONSTRUCTION'S GAIN
Electro-Tec has been lucky - so far.The slip-ring manufacturer hasn't felt much impact from the cuts in defense spending, even though about 80 percent of its products are sold to the military.
But company executives plan to be ready when the luck runs out.
"We really don't know how [defense cuts] will affect us. Everybody's clueless," said Sam E. St.Amour, Electro-Tec's general manager. "It looks like we may have some tough sledding ahead in the second half of this year."
That will be the test for Brian Schwartz.
The company hired Schwartz two years ago and gave him the job of finding commercial markets for its products. Before coming to Electro-Tec, Schwartz worked four years as a sales representative for a machine and tool manufacturer in Richmond, Ind.
The politically correct term for Schwartz's job is defense conversion, and it's becoming the buzzword of the '90s as companies scramble to transfer defense technology to commercial contracts.
In Western Virginia, most of the focus on defense conversion has been at the Radford Army Ammunition Plant, where more than 1,500 workers have been laid off in the past two years, and ITT Corp. in Roanoke County, which has cut more than 400 jobs in the past three years. ITT is already testing civilian markets for its night-vision goggles, while officials at Hercules Inc., operator of the Radford arsenal, look for ways to commercialize the ammunition plant.
Electro-Tec's slip rings are used in jet fighters, battle tanks and the Patriot missile radar system. They take the place of electrical wires and act as conductors in parts of the machines that continuously rotate.
After months of testing and talking with industry experts, Schwartz came up with what he thinks is a viable non-defense product for Electro-Tec to market: construction equipment.
Electro-Tec and its parent company, Kaydon Corp., are working together to develop a full line of bearings and crane monitoring and control systems. Kaydon is a Clearwater, Fla.-based designer and manufacturer of custom-engineered products.
"These are the products that are the future of Electro-Tec," Schwartz said. "We're going to make some serious bread."
Last month, Schwartz and other Electro-Tec executives unveiled their new products at a construction exhibition in Las Vegas. The response, he said, was positive.
But there was a close call.
The six 10-foot crates carrying their equipment were delayed by the blizzard that hit the East Coast that week. But they did arrive, finally, and Schwartz and his co-workers were able to set up the display in time for the show.
Steve Braun, an electrical engineer for PPM Crane in Conway, S.C., said Electro-Tec had one of the show's most popular displays.
"There were so many people milling around their product that it was just astonishing," he said. "Not just customers, but also their competitors."
Many defense contractors have trouble marketing products commercially, but Electro-Tec was lucky because Kaydon already makes construction equipment.
"We had instant credibility," he said.
Electro-Tec's crane monitoring systems are designed to warn crane operators when a cable might break or the crane might tip over because the load is too high.
A weight is connected to a switch in the crane, so when the load height exceeds safety parameters, a slip ring carries a signal to the alarm box in the cab.
"Their crane-monitoring system is pretty much going to be unique to the crane industry," Braun said. "It's not that it's a new If Electro-Tec's transition to the commercial market is successful, it may have to expand its factory and increase employment. The company, which has laid off about 15 workers in the past few months, now has 185 workers. product - other companies make them - but this is much more user friendly and easy to monitor."
Braun said it's likely that federal regulations will require every crane to have a monitoring system by 1995.
"There is a big market there," he said.
Schwartz said Electro-Tec hopes the construction equipment will bring in about $3 million in sales in 1994 and $6 million in 1995. "Those are realistic numbers," he said.
Electro-Tec had about $19 million in sales last year. If its transition to the commercial market is successful, it may have to expand its factory and increase employment. At present, the company, which has laid off about 15 workers in the past few months, has 185 workers.
"We don't like laying people off," Schwartz said. "That's why we are trying to stay ahead of the game and branch into things other than defense work."