Focusing on profits, Energy Conversion Devices plans layoffs of researchers
By John Gallagher
Aug 13, 2004 (Detroit Free Press - Knight Ridder/Tribune Business News via COMTEX) --
Energy Conversion Devices Inc., the Rochester Hills-based alternative energy company, said Thursday it will lay off staffers to focus on commercializing its core technologies in a bid to achieve sustained profitability by mid-2006.
ECD Chairman and CEO Robert Stempel said at a news conference that a recent favorable settlement in a multi million-dollar patent dispute gives ECD the cash it needs to transform itself. But the transition will require a downsized and leaner research arm and a new emphasis on marketing its technology, including licensing agreements and strategic partnerships.
Stempel would not estimate the number of layoffs to come but said it would involve "significant reductions." ECD has 333 staffers, and its various subsidiaries and related ventures have many more.
"The restructuring will not be easy," Stempel said, then added, "We must move on the road to commercial success."
James Metzger, the company's chief operating officer, will have "full responsibility, accountability and authority" for the restructuring, said Stempel, a former chairman of General Motors Corp.
Metzger told the conference he expects most of the layoffs to occur by Oct. 1 and most of the broader restructuring to be finished by Jan. 1. "Our obvious goal is to get as much of the value as soon as possible," he said.
Long known both for its exciting technology and its absence of profits, the company produces a variety of solar energy and innovative battery technologies, including lightweight flexible solar panels and batteries for hybrid vehicles, telecommunications and stationary energy-storage applications. ECD products have applications ranging from residential use to aerospace.
The restructuring could include a number of new licensing deals and partnerships with companies such as General Electric.
Stanford Ovshinsky, the president and chief technology officer, said ECD needs to change the mix of skills within the organization. "We will unfortunately be losing some good people over the next few months," he said. "We appreciate our colleagues' many contributions to the company and look forward to the future."
As part of a deal announced a month ago, ECD and its subsidiaries and joint ventures will share in a $30- million settlement of a patent- infringement suit in federal court stemming from the use of its nickel metal hydride batteries. The settlement related to the use of those batteries in Toyota Motor Corp.'s Prius vehicles.
The patent settlement was good news for ECD, which hadn't turned a profit since 1996. It has lost a combined $78.9 million in the last four years.
Among the core ventures the company will focus on growing are United Solar Ovonic Corp., a subsidiary that makes lightweight flexible Ovonic solar panels and photovoltaic systems; Cobasys , a 50-50 joint venture with ChevronTexaco Technology Ventures LLC that makes batteries for hybrid vehicles; and Ovonyx Inc . , 41-percent owned by ECD, which develops memory technology.
ECD's stock closed Thursday at $10.67 per share, up 6 cents from the day before.
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