Durel Division moving to China after demand for technology falls
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July 11, 2007
A swift change in technology has left Rogers Corp.'s Chandler-based Durel Division in dire straits.
The company said Tuesday that a rapid decline in sales of its keypad backlights has prompted it to lay off 200 of 275 employees in the division and move the operation to Suzhou, China.
Durel's products are used in Razr cellphones and other hand-held devices.
After riding Motorola's hot Razr to record profits, Rogers has watched demand for its hair-thin electroluminescent, or EL, lights wither as manufactures opt for new competing technology that is cheaper and uses less electricity.
"Unfortunately, the speed of our success with our EL cellphone products comes with an almost equally speedy decline," Robert Wachob, Rogers president and chief executive officer, said in a statement.
Ed Joyce, a spokesman at the company's Rogers, Conn. headquarters, said most of the layoffs in Chandler would occur in the next two quarters and most employees would be offered severance.
The company's Advanced Circuit Materials Division, also in Chandler, is unaffected by the downsizing at Durel.
The division employs 350 people and makes materials used in the fabrication of printed circuit boards.
Durel Corp. was formed as a joint venture between Rogers and 3M Corp. in 1988. It developed the EL technology.
One of its first applications was the Timex Indiglo watch with an illuminated dial, which helped a man lead a group of people down 34 flights of stairs in the dark after the first World Trade Center bombing in 1993.
Rogers bought out 3M's stake in Durel in 2003 and watched sales soar as demand for smaller and lighter hand-held devices skyrocketed.
But late last month, the company said that sales of its EL products were much lower that expected and that its second-quarter profit would fall below estimates.
"Due to the magnitude of the sales decline, we are making some significant changes to reduce expenses," Wachob said. "The result of these difficult actions positions Rogers to return to reasonable levels of profitability while preserving our ability to grow."
Altogether, the company is eliminating 400 jobs in its Custom Electrical Components Division, which includes Durel.