Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, November 5, 1993 TAG: 9311050137
SECTION: BUSINESS PAGE: A-11 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
The restructuring is being undertaken to increase the value of FiberCom's stock for its shareholders, said Albert Bender, FiberCom's chairman and leader of the planned new commercial enterprise.
"It very important after 12 years of operation that we provide liquidity to our stockholders," Bender said.
FiberCom is a privately held company formed by Bender, Robert Martinet and Jack Freeman, all former employees of ITT Corp.'s Roanoke plant. FiberCom has about 40 stockholders in the Roanoke Valley.
With the changes, Martinet takes charge of FiberCom's core contracting business in Roanoke and Freeman stays with the contracting business as sales and marketing manager.
Dividing FiberCom into three separate units should help each perform better, Bender said. Each business unit requires different skills from employees and has a distinct corporate culture, he said.
"Everybody is excited, because now everybody can focus in the area they've got the greatest skill," he said of the proposed organization.
Roughly 20 of FiberCom's 215 employees in Roanoke will be affected by the changes. Employees were told of the plans in meetings last Friday and Monday.
FiberCom's core contracting business designs and builds customized networking systems for clients such as the Department of Defense, NASA and the Boeing Co.
Contracts represented $24 million of Fibercom's $28 million in sales last year, the company reported.
FiberCom is building a networking system for Marconi, a British company hired by United Airlines to install seat-back personal computer and television entertainment systems in its new Boeing airliners. Those planes, which will start rolling off the production line in 1995, also will contain a FiberCom-designed plane-wide computer networking system.
The business to be sold provides networking equipment for IBM mainframe computers. It has five or six employees, mostly engineers. Dave Gallagher, who has been with FiberCom five years, heads up the IBM-related operation.
FiberCom is actively seeking a buyer for the mainframe unit. A possible leveraged buyout by employees also is under consideration, Bender said.
On the other hand, the commercial operation, which involves 13 engineers including Bender, will spin off from FiberCom's contracting business only if sufficient financing can be found to pay for it, he said. The company hopes to find the money by March 30.
"If we don't get financing, we're not going to do anything," he said.
Commercial work is "less rigorous" than contract work in documentation and testing, Bender said. Defense contractors often fail in trying to move into commercial markets because they are accustomed to higher production costs than commercial companies and aren't competitive in pricing, he said.
FiberCom plans to move its commercial operation into a separate building, possibly outside of Roanoke.
Moving to another city could make it easier for the commercial unit to recruit the technically skilled employees it needs, Bender said. The company has found it hard to coax qualified administrators, engineers, computer scientists and software engineers to move to Roanoke, he said.
The problem is not the quality of life or cost of living in Roanoke, but the lack of other high-tech companies and jobs in the area, he said. Because FiberCom's commercial plans are risky, those people are reluctant to move where there are no other potential jobs available should the FiberCom enterprise fail.
"FiberCom's No. 1 problem in Roanoke has been to attract people," Bender said.
If the commercial group is going to move, now would be the cheapest time to do so because the company is as small as it's going to be, he said.
Bender hesitated to discuss specific plans for future commercial projects. In the past, the company's commercial business has included installation of computer networking systems for Readers' Digest and Rockwell International, where FiberCom's network ties Rockwell's 3,000 computers together.
The commercial unit would continue to use the company's Roanoke plant for manufacturing so there would be no loss of manufacturing jobs in Roanoke, Bender said.
It has been an eventful past few months for FiberCom. In September, Richard Popp, president and CEO for the past five years, resigned in a disagreement with the board.
"There comes a time when the president of a company has the interests of employees at heart as well as the shareholders," he said.
Popp said Thursday that plans to restructure the company had not been developed during his tenure.
"I certainly would not have been the one to propose that," he said, adding that he had not found Roanoke a major obstacle in recruiting employees.
by CNB