InteSys Technologies Inc. experienced a form of whiplash in December when a major customer cut back an injection molding program.
``One day [we were] throttle to the floor, and the next day [we were] standing on the brakes,'' Greg Layne, president and chief executive officer, said in a telephone interview from his office in Gilbert, Ariz.
``Into the third and fourth quarters [of 1997], we were ramping up for a big program,'' Layne said. Then the customer re-evaluated its options. InteSys had to dismiss about 100 workers directly tied to the contract and 50 more staff workers, he said, nearly all of whom were hired for the ramp-up.
Layne declined to name the customer, but outside industry sources cited Intel Inc. of Santa Clara, Calif.
The abrupt change startled the community and raised financial-stability questions.
``InteSys squelches bankruptcy rumors,'' said a headline in the Feb. 11 issue of the Gilbert Independent. The weekly newspaper quoted Nicholas Smeed, InteSys vice president for human resources and corporate development, who explained the reality of fluctuating business cycles and denied the rumors.
As a business, InteSys had ``a good year in 1997'' with consolidated sales of about $157 million and ``expects 1998 to be 10 percent better,'' Layne said. He indicated the good performance applies to both sales and profit.
InteSys molds and assembles products principally for automotive and telecommunication end uses. Neither segment accounts for more than 35 percent of the company's business, Layne said. Other output involves business machines, medical devices and consumer products.
Major customers include Motorola Inc., Qualcomm Inc., General Motors Corp.'s Delphi Packard Electric Systems division, Hewlett-Packard Co., Chamberlain Manufacturing Corp., Alcon Surgical Inc. and 3M Corp.'s medical products unit.
In Arizona, InteSys employs 1,100 and operates 80 injection molding machines with clamping forces of 28-750 tons.
``We're comfortable between 1,000 and 1,200'' at the 250,000-square-foot Gilbert facility, Layne said.
A 2-year-old satellite operation in labor-rich Empalme, Mexico, employs 500, occupies a total of 45,000 square feet in two buildings and is dedicated ``primarily to value-added assembly,'' he said.
The recent addition of six molding machines brings the Empalme site to eight presses with clamping forces of 75-385 tons.
The company also has a 65,000-square-foot leased molding plant in Costa Mesa, Calif. That plant employs 169 and operates 50 presses with clamping forces of 28-500 tons.
InteSys bought the former Cimco Inc. molding operations from M.A. Hanna Co. of Cleveland in July 1996. Since that purchase, InteSys sold three former Cimco buildings and vacated one leased site in California, and sold a 110,000-square-foot plant and 15 acres at a former Cimco site in Dayton, Nev.
InteSys takes total product responsibility, and has strong connections with suppliers of metal stamping, painting and electronic shielding, Layne said. ``We've formed relationships with teeth,'' he said.
``We don't have to acquire metal'' capability to meet customer needs, he said. If any acquisition occurs this year, InteSys may ``buy more plastics.''
InteSys' management team owns a majority of the company stock. Boston investment banking firm Berkshire Partners took a minority ownership stake as part of a 1995 financial restructuring that permitted some senior partners to retire, Layne said. In the restructuring, endowment-investor Harvard Management Co. and France's Banque Nationale de Paris assumed debt.