3 optics firms in tailspin
Source: Arizona Daily Star
Publication date: 2001-06-21
Arrival time: 2001-08-27
Industry cluster hustles to keep scientists here
The optics industry pumps more than $650 million a year into the local economy, but it faces challenges from competitors who would like to lure optics companies and their highly skilled researchers from Tucson and elsewhere.
In the past six weeks, Chorum Technologies Inc. of Richardson, Texas, Etec Systems of Hayward, Calif., and Schott Donnelly, a Tucson joint venture between German company Schott and Holland, Mich.-based Donnelly, have closed or are winding down operations in Tucson because of the sputtering economy. Together, they account for nearly 150 employees, most of whom are technically trained.
The optics industry cluster immediately put its resources toward finding employment for scientists when it heard that the companies were shutting down. The cluster is a network of firms in the same industry that work together to grow the industry and accelerate economic development.
"We don't want the talent to be drained away," said Valerie Vance- Goff, co-chairwoman of the optics cluster, which is known as the Arizona Optics Industry Association, or AOIA.
The cluster's efforts have helped place nearly all of Chorum Technologies' 23 employees in Tucson.
When Vance-Goff and AOIA co-chairman Bob Breault heard last week that the Schott Donnelly joint venture was dissolving, they quickly organized meetings between representatives of the affected businesses and local and state economic development leaders to brainstorm ideas to keep the scientists here.
Then AOIA got another piece of sobering news. Etec, a wholly owned subsidiary of Applied Materials, was ceasing operations here and looking for a buyer.
Optics is regarded as a low-polluting, high-paying industry whose work force is a well-educated asset to Tucson.
The trouble is, other communities also want to grow their optics industries and are trying to recruit Tucson's optical scientists.
Curt Laumann, senior optical engineer with Etec, said he knew colleagues who had heard from firms in Minnesota and elsewhere that are scouting for talent.
"I would say 80 to 90 percent strongly want to stay in Tucson. There are so many more advantages to living here than in San Jose or Connecticut or Boulder," Laumann said.
But location is irrelevant if researchers come up empty-handed in Tucson.
"People are anxious. That's why it's important to move quickly, or the scientists will start looking elsewhere," said Anoop Agrawal, deputy general manager at Schott Donnelly.
An uphill fight
One idea percolating in the industry is to transform research teams from optics companies into Tucson-based entrepreneurial ventures.
But the proposition faces significant hurdles. For one, scientists own no technology they develop for private companies. It belongs to the companies themselves. They must apply for licenses from the company or obtain proprietary technology in another fashion when they leave to start up a business.
The other problem is that pure scientists may have little business experience.
"You have to assemble a situation with some management folks, like marketers and a CEO, to put a real business together," said Carl Russell, president and CEO of the Tucson Technology Incubator. Russell met late last week with cluster representatives to discuss the possibility of forming a start-up company out of the ashes of the departing optics companies.
Breault, chairman of Breault Research Organization, also concedes that Tucson's optics companies are more focused on research and development and not as much on manufacturing products. That could slow down budding entrepreneurs.
"Starting a business is an uphill fight, it always is. A business owner has to have enough financing to carry them through at first, until they can get funded or start to get revenues from selling products."
Tapping into expansions
Optics is what is known as an enabling technology. Optics appear in everything from laser die-cutting machines to the lights and mirrors in car interiors to state-of-the-art medical equipment. They also are the basis of fiber-optic networks and computer-chip making. Both industries are suffering from inventory gluts and too-rapid expansion, which in turn has hurt some local optics companies.
But others seem to be thriving.
Last March, Optical Research Associates, a large independent optical design firm and a leader in developing optical software, opened an office in Tucson. The company is expanding its 4,000- square-foot office now.
Zygo Corp. and Burleigh Instruments, two East Coast optical companies, also have come to Tucson in recent months. Zygo, a 31- year-old firm, opened a research and development office in Tucson two months ago that employs three optical scientists. Burleigh makes precision instrumentation products that can be found in scientific research labs.
Tucson is also positioning itself for further expansions in the optics industry.
Stephan Hansen, general manager at Schott Donnelly, plans to talk to his bosses at Schott in Germany about Tucson's attributes, including its top optical sciences program at the University of Arizona. Although the Schott Donnelly joint venture will come to an end, Schott executives are considering Tucson as a possible expansion site.
They toured Tucson in April and met with optics industry representatives. Schott is expected to announce expansion plans in September.
* Contact Star Business reporter Paola Banchero at 573-4237 or at banchero@azstarnet.com.
Publication date: 2001-06-21
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