A $2.3 billion division of Acer Group of Cos. of Taiwan is moving its U.S. headquarters from San Jose to the city of Industry to pare costs and be closer to distribution companies and the Port of Long Beach.
Acer Communications and Multimedia America Inc. leased 100,000 square feet of warehouse and office space at 20480 E. Business Parkway, bringing 45 of its 76 employees down from Silicon Valley and hiring an additional 30 or 40 people, said Ralph Tang, president of Acer CMA.
The 17-year-old Taiwanese company makes computer products and cellular phones. Half its products are sold with the Acer brand name; the other half are manufactured for other manufacturers.
The division also includes a 100-person wireless research company in San Diego.
Acer CMA set up its U.S. headquarters in the mid-1980s in San Jose.
In the past few months, as personal computer sales have declined, the company has been looking to make its operations more efficient, especially since the bulk of its products have low profit margins, Tang said.
Many PC makers, including $3 billion Acer Inc., Acer CMA’s sister company, have laid off hundreds of employees in the past six months or so, among them Compaq Computer Corp. and Dell Computer Corp. Acer Inc.’s sales for 2000 were $4.8 billion, down from $5.8 billion the year before. Computer peripheral sales generally fall with PC sales.
Tang said the move to Industry has obvious cost-savings benefits.
“I’d have to believe a large part of the reason is the lower cost of land and labor, when maintaining a facility in Silicon Valley is two or three times that of maintaining one in city of Industry,” said Todd Kort, a Gartner Dataquest analyst.
Acer CMA, which will move into its new headquarters in August, will be close to many distribution businesses as well as other Asian computer businesses in Industry. These include Circuit City Stores Inc.’s distribution center, General Electric Co.’s Western region distribution center and APL Logistics, which manages Kellogg Corp.’s distribution for the area.
Acer CMA’s building, which was vacated by ViewSonic Corp. for a 200,000-square-foot facility nearby, is in the Fairway Business Center, a 200-acre park largely occupied by distribution and computer companies, particularly those based in Asia, said Kent Valley, senior vice president of Majestic Realty. n
Bronstad is a staff writer at the Los Angeles Business Journal.
