Melville, N.Y.-based electronics manufacturer Park Electrochemical Corp. plans to close its largest U.S. manufacturing plant, which is in Fullerton.
The company will move manufacturing functions, including treating, lamination, paneling, finishing, inspection, quality lab and shipping and receiving to an 81,000-square-foot plant in Tempe, Ariz., as part of a national consolidation plan, according to a recent filing with the Securities and Exchange Commission.
Park Electrochemical, which also has operations in Europe and Asia, develops and manufactures advanced composite materials, assemblies, low-volume tooling and digital and RF/microwave printed circuit materials, primarily for the telecommunications, Internet infrastructure, and high-end computing industries. It makes composite materials, parts and assemblies for the aerospace industry.
Its Fullerton location held the company’s Nelco Products Inc. division. The 95,000-square-foot building was leased under a deal scheduled to run through 2020, SEC filings show.
Costa Mesa-based TTM Technologies Inc., the nation’s largest printed circuit board maker, was its biggest customer in its last fiscal year.
Chief Executive Brian Shore wouldn’t disclose the number of affected employees at the 95,000-square-foot Fullerton plant but confirmed that the company is likely required to file a Worker Adjustment and Retraining Notification with the state Employment Development Department. A company with at least 75 employees must file a WARN notice if it lays off or relocates 50 or more workers.
“It’s not our policy to talk about headcount. Some of the people in California will not be able to continue with us,” Shore said. “Everyone is invited to relocate to Arizona. We feel sad about what’s happened. We have people that have worked there for a long time.”
The company employed 451 as of February, including 392 involved in manufacturing. The closing of its Nelco Products Inc. unit ends a long chapter in the company’s history. The business was established in 1965 by Shore’s father and Tony Chiesa.
The consolidation will take four to six weeks to complete, according to the company. Some operations will move to its 26,000-square-foot plant in Anaheim, Shore told the Business Journal.
Park Electrochemical expects to take a pretax charge of $5 million to $5.5 million in the consolidation. It projects annual cost savings of between $3 million and $3.5 million after completion.
The company in the 12 months through February, the end of its fiscal year, reported revenue of $145.8 million, down 10% from the prior year.
TTM Technologies accounted for 13.8% of Park Electrochemical’s sales in its latest fiscal year, or roughly $20.1 million. TTM had $2.5 billion in sales last year, up 20.8% over 2015, and adjusted profits of $142.3 million, up 75.4%.
The latest development underscores the fragile nature of the U.S. manufacturing industry, which increasingly relies on advanced technology processes and niche segments for domestic work.
President Donald Trump has talked up revitalizing the shrinking sector through his “America First” doctrine, though specific changes regarding regulations, labor and skills haven’t been introduced.
“Government can do only so much,” Shore said. “The economics doesn’t make sense.”
The Fullerton plant was expanded in 2000 to handle higher volume materials production for the electronics market, work that has gradually moved to Asia, where nearly all of it’s handled today.
Park Electrochemical’s Tempe operation specializes in quick turnarounds, small production runs and custom design, reflective of the state of the industry across the country. It also has facilities in Kansas, France and Singapore.
“In the U.S., it’s a very niche market,” Shore said, “really the only thing left in North America.”
