ISSUE 449: News
Glenayre scales back local production
High tech firm hit with Asian Flu and a slowdown in the pager market
MYRIAM BEAUG
mbeauge@biv.com
Glenayre is scaling back its Vancouver-based production after suffering a significant drop in its Asian business.
The company is one of the biggest high tech firms operating in B.C. and specializes in paging switches, transmitters and
voice-mailbox switches. Its Vancouver-based groups -- wireless messaging and operations manufacturing -- account for the
lion's share of Glenayre's activity, and make up about 75 per cent of its business internationally, mainly in Asia.
So when Asian markets collapsed, a significant portion of Glenayre's business disappeared, said Mats Gerschman, senior
vice-president of operations and manufacturing for the wireless messaging group.
For the quarter ended March 31, 1998, Glenayre (GEMS:NASDAQ) recorded earnings of five cents a share on net sales of
$94.5 million. That compares to earnings of 22 cents a share on net sales of $105.8 million for the same period last year.
"South Korea was a good customer, but things have slowed down there. Then Thailand saw its currency drop. And now,
Indonesia is experiencing some difficulties too. All of this adds up," Gerschman said.
Glenayre also had to deal with a softening of the North American pager market.
Faced with declining sales in all markets except China -- where Gerschman said the company is doing well -- Glenayre had no
choice but to reduce its production.
In January, Glenayre still held on to hopes things would get better. It kept all its staff and tried to compensate for reduced loads
with improvement and quality training. All that cost money, though, and employees started running out of things to do,
Gerschman said.
In February, Glenayre applied for the federal government's work-share program. Under the program, approximately 300
employees, or nearly one-third of Glenayre's local staff, work three days a week and collect employment insurance for the
remaining two days.
One of the work-share program's best features is its flexibility, Gerschman said. If Glenayre suddenly gets a rush order, it can
ask some of its staff to work full-time and then go back to work sharing once the order is filled.
Best of all, the program allows Glenayre to keep its employees. "If we lay off employees and then get more work again, it'll
probably be too late. We will have lost them to other companies. And layoffs also affect morale," Gerschman said.
Glenayre's work-share program was initially set for 17 weeks, but since the economic situation in Asia lingered, the company
applied to Ottawa last month for an extension.
Besides establishing the work-share program, Glenayre also tried to shift some work from its U.S. operations to Vancouver,
the limiting factors being equipment and product knowledge.
Despite the slowdown, Glenayre is going ahead with development of a new $25-million office and manufacturing complex for
its local groups.* |
