Local employment growth has evaded Orange County’s largest contract electronics makers for another year, despite a boost in global sales for the industry.
The 18 largest companies employed 2,728 workers here in the 12 months through August, eight fewer than a year ago, according to this week’s Business Journal list.
It’s the third consecutive year that a nominal drop has been reported. The companies on the list combined to cut 39 jobs over the period.
The last sizable gain occurred in 2011, when employment increased 4.7% during the early days of the economic recovery.
The latest employment figures in OC come amid strong overall growth in the industry. San Jose-based New Venture Research projects sales in the electronics manufacturing services market will grow at a 7.7% compounded annual rate to $639 billion by 2018.
The local companies make printed circuit boards and other products for computers, consumer electronics and medical devices. Some serve niche markets for products with military, aerospace and industrial uses.
Products made here end up in a wide variety of devices, including computers, aircraft, smartphones and medical gear.
Many contract electronics makers started here decades ago to serve a single customer and stayed competitive by designing and building prototypes or producing small batches on quick turnarounds for more diverse customer bases.
They compete against a bevy of Asian competitors that produce less-complex boards and systems made in large volumes and at cheaper prices.
• Perennial No. 1, Santa Ana-based Express Manufacturing Inc., cut 35 positions to end the period at 750 employees, down 4.5% from a year ago.
Hong Kong Shift
The company shifted some consumer electronics-related work to its Hong Kong-based subsidiary, EMI Asia Ltd., which expanded its equipment line late last year.
“That’s one of our reasons that we see headcounts being reduced,” said Chief Executive C.P. Chin. “Some of our programs just don’t fit here in the states.”
The company, which makes industrial and telecommunications products and handles a lot of new-product work, is aiming to rebound from a down year in 2013 marked by budget cuts of governments, part of its client base. Chin said he expects a stronger performance this year fueled by renewed interest in local manufacturing, particularly in the high-end, low-volume work EMI handles in Santa Ana.
“Our future is still very bright,” he said. “Some of the programs are coming back to the United States.”
• TTM Technologies Inc., which has long held the No. 2 spot, added 11 employees here in the past year for a total of 444.
The Costa Mesa-based company’s restructuring and factory closure in China this year has helped the printed circuit board maker improve manufacturing efficiency under new Chief Executive Tom Edman.
Edman, who in January replaced Chief Executive Kenton Alder after his retirement, has cited strong demand this year for the company’s high-density and rigid-flex circuit boards used in smartphones, tablets and e-readers.
The nation’s largest printed circuit board maker recorded sales of $1.4 billion in 2013, up 7.7% over 2012. Adjusted profits fell 26.8% to $51.3 million, primarily due to production inefficiencies and unneeded plant space.
• Cal Quality Electronics Inc. moved up one spot to No. 5 after adding 10 employees for a total of 175 workers, up 6% from a year ago.
The Santa Ana-based company secured a three-year, multimillion-dollar contract in April to supply printed circuit boards and advanced assembly for specialized radios made by Boeing Co. in Huntington Beach for military search-and-rescue missions. The deal was its first major contract with the Chicago-based aerospace and defense giant.
Cal Quality specializes in low-volume, high-complexity production runs for the medical, industrial, communications, aerospace and defense markets.
“We continue to stay very focused on pursuing opportunities in key market segments,” said Ken Haney, vice president of sales and marketing. “The medical sector, as well as our defense/aerospace segments, are growing for us. We are seeing strong business from existing customers, as well as significant contributions to our growth from new key customers.”
• No. 11, Montreal-based MX Electronics Manufacturing Inc., is the only newcomer to the list. Its new Santa Ana manufacturing unit added 15 people for a total of 65 employees.
The contract electronics manufacturer and custom designer was established last year as part of a broad corporate rebranding and reorganization effort by parent Memory Experts International after its strategic acquisitions of Inter Electronics Inc. and Electronic Manufacturing Technology Inc.
• Irvine-based printed circuit board maker Multi-Fineline Electronix Inc. dropped three spots to No. 15 after cutting 10 employees for a total of 44 local workers.
Money-Saving Move
The company recently consolidated factories in China and closed a research and development center in the U.K. as part of a widespread restructuring plan intended to return the company to profitability.
Multi-Fineline, better known as M-Flex, projects it will save about $50 million annually through the consolidation and regain profitability in the second half of the year.
Sales in the last three quarters were down more than 23% to $460 million as the company lost market share and production in its smartphone, tablet, and consumer electronics business lines, according to regulatory filings.
M-Flex posted a $20.7 million loss in the June quarter. It has cut about 1,000 employees companywide in the past year.
The losses weren’t enough to offset overall gains in the industry, as companies on the list added 1,184 positions, good for 101,875 companywide, a 1.1% increase.
Five companies added employees, four cut workers, four were flat from a year ago, and five were Business Journal estimates.
