Everett, Wash.
Published: Friday, July 11, 2008

Everett's Intermec shedding 180 jobs

Assembly and repair work long done in Everett will be outsourced to Asia.

Mike Benbow, Herald Writer

 EVERETT -- An estimated 180 employees at Intermec Corp. in Everett will lose their jobs in the coming months as the company outsources its production work to Asia.

Company officials said it was a tough decision to make but one that was essential if the company was to remain competitive.

"This was a difficult decision for the company," said Dennis Faerber, a senior vice president, global supply chain. "We're trying to do everything we can (for employees). We felt this was absolutely necessary to compete going forward."

Intermec, an electronics firm that was a pioneer in the barcode business, has gradually shifted to producing computerized devices that help businesses and governments label, identify and track products and other items.

Venture Corporation Ltd., a global electronics supplier which already makes subassemblies for Intermec and has designed and made some products, will take over all of its manufacturing in Asia.

Faerber said the company already buys most of its materials in Asia and sends it to Venture, which sends its work on to Everett for completion.

"It made a lot of sense to move the assembly to where the supply chains already are," Faerber said. "We had a very expensive supply chain model."

In addition to outsourcing its assembly, the company is also moving repair work that it does in Everett and in Cedar Rapids, Iowa, to existing locations in Charlotte, N.C., and Monterey, Mexico.

Mike Wills, executive vice president of sales, said it makes sense to consolidate the repair work in one location because it's more efficient. He said Intermec products are lighter and faster these days and can easily be shipped overnight, eliminating the need for regional repair sites.

Faerber said most of the changes will take place during the next six months.

"We really wanted to give people time to understand their future in the company," Faerber said.

The changes affect about 260 people. Some will be retrained for other jobs.

In Everett, about 180 people will lose their jobs, the company said. Intermec is planning to offer counseling, resume writing workshops, career fairs and other activities to help workers whose jobs will be eliminated.

Intermec, which once made larger, more complicated equipment, is now producing devices that are smaller and more like other consumer products. That has changed the company's business and made things more competitive, Wills said.

"Every new device that comes out is packing more and more," Wills said. "But if you look at what customers paid for these devices 10 years ago and what we pay today, it's pretty much the same.

"Where we have the opportunity to raise the price, we do," he added. "At the same time, we are constantly looking at ways to improve our productivity."

Faerber noted that the company is well-known for making rugged, quality equipment and that level of care will continue with Venture.

Patrick Byrne, Intermec's president and CEO, said in a news release that the changes will help the company be more productive and efficient while reducing costs.

The restructuring is expected to cost $7.5 million to $9 million, including $3.5 million in employee termination expenses.

The company's stock closed at $16.08 on Thursday, down $4.14, or 20.47 percent.
© 2009The Daily Herald Co., Everett, WA