Two East Tennessee entrepreneurs have acquired an underutilized television-making facility and plan to use its electronics manufacturing, injection molding and warehouse-distribution capabilities to capture contract business.
``This plant can manufacture both the plastics and the electronics in one place,'' said George Taylor, president and a co-owner of holding company GC Capital LLC of Greeneville, Tenn.
On May 9, Philips Consumer Electronics Co. of Knoxville, Tenn., sold the 1.1 million-square-foot plant to the limited liability company and committed to buy television sets from the new owners. The Greeneville site, known as Philips' plant No. 3, employs about 1,200. At its peak it employed 2,000.
The plastics operation uses 15 Cincinnati Milacron and two HPM injection molding machines, all equipped with robots, with clamping forces of 357-1,500 tons and shot sizes of 32-362 ounces. Philips moved the molding operations from Arden, N.C., between late 1995 and June 1996.
Philips plant No. 3 has produced about 1.2 million television sets annually. Current production uses about 50 percent of the plant's capacity. The site was established in the 1960s to make Magnavox products.
Philips owns two nearby facilities. One makes printed circuit boards and is for sale, and the other is a TV refurbishing plant that was idled because quality improvements made it unnecessary, the company said. Work was transferred to other facilities in Arkansas and California. Parent company Philips Electronics NV is in the Netherlands.
Philips has adopted a strategy to concentrate on TV design and, for the most part, exit manufacturing. Competition has cut prices for color TV sets, forcing manufacturers to seek lower-cost sites such as Mexico's Ciudad Juarez and Tijuana.
GC Capital set up three stand-alone operations to expand services:
Five Rivers Mfg. LLC seeks contract electronics manufacturing business in board stuffing, wave soldering, assembly, testing and packaging, and manufactures color TV sets under a three-year contract with Philips.
Creative Moldings LLC markets the injection molding capabilities to firms using plastic components for consumer goods, electronics and computers, and makes TV housings under a contract with Five Rivers.
Distribution Services LLC offers warehousing, inventory management and product distribution.
GC Capital projects 1997 sales of about $600 million. Officials want to diversify into medical and automotive products in addition to other consumer electronics.
Taylor and Charles White, GC Capital co-owner, secretary and treasurer, bought the plant after reaching an abbreviated agreement with the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers.
Negotiations for a new contract with IUE Local 796 may begin in late June, said William Knight, grievance committee chairman.
``We've lost the pension plan, and insurance is going up, but we come in with the same wages.''
Workers average 52 years of age.
Union members rejected agreements with GC Capital in December and February and, temporarily, the company withdrew a bid to purchase the plant. Lacking a buyer, Philips indicated it would close the plant by June 1998.
In 1995, Taylor and White purchased Philips' 1 million-square-foot woodworking facility in Jefferson City, Tenn., now operating as JC Cabinet Co. LLC. The site makes cabinets, entertainment centers and office furniture and had 1996 sales of about $32 million.