COM DEV charts different course
sanluisobispo.com
SLO tech firm separates from parent company to remain viable
Raven J. Railey
The Tribune
Posted on Sat, Aug. 24, 2002
San Luis Obispo -- In an effort to keep a locally grown company alive and its 55 employees working, COM DEV Broadband Inc. of San Luis Obispo has separated from its Canadian parent company.
The firm, which develops high-speed wireless data systems, has been purchased for an undisclosed amount by Axio Wireless Inc., a new corporation formed by senior managers of COM DEV Broadband. The sale closed Aug. 9.
“If it wasn’t spun out, it would have been shut down,” said Joshua Lober, COM DEV Broadband’s vice president of engineering.
Instead, as of last Monday, most employees began going without a paycheck. They’ll do so for a period of four to six weeks while the new owners try to work out the company’s future, Lober said.
In the early 1990s, Lober and his then-partner, Bill Walsh, founded the company that eventually became COM DEV Broadband in San Luis Obispo. Originally called Lober & Walsh Engineering, it was purchased in August 1999 by COM DEV International. That company is Canada’s largest designer and manufacturer of hardware subsystems used in communications, space science, remote sensing and military satellites.
COM DEV Broadband’s main product is M/ergy, a system that allows network carriers to provide high-speed wireless Internet data service to businesses and consumers through laptops, desktop computers or hand-held devices.
But poor economic conditions in the wireless market have made it more difficult for the company to sell its technology than the Canadian manufacturer anticipated. It decided earlier in the year to sell or close the broadband division if the financial situation didn’t dramatically improve.
“COM DEV is first and foremost a space company, not a wireless company,” said Ron Holdway, vice president of corporate communications for COM DEV International.
But it hasn’t written off the broadband company entirely. As part of the sales agreement with Axio, the Canadian manufacturer is investing $2.3 million in the new corporation in exchange for 13 percent of its stock, according to Canadian securities filings.
“Their opportunities for success at this stage are better separately than it is with us,” Holdway said.
The cumbersome processes required of publicly owned corporations were holding the smaller company back, he said. “With us not there, they’re probably worth a lot more.”
The majority interest in Axio is held by John O’Connell of Los Altos Hills, an executive officer of COM DEV Broadband, according to the securities filings. The remaining interest is owned by other company managers.
The managers, including Lober, are now trying to determine the company’s future and how to turn a profit in the existing market.
“We’re really in a state of flux,” Lober said, and trying to answer the question, “What do we want our company to be?”
Most of the employees are continuing to work even while they are not being paid, he said. Others have chosen to treat the period as an unpaid vacation.
“A bus load of them left (Thursday) to go to Burning Man,” he said. Burning Man is a weeklong, free-form annual arts festival being held in Black Rock Desert, 120 miles north of Reno, Nev. |
