Siemens to sell?

By Thomas Wilson
STAR STAFF
twilson@starhq.com

   JOHNSON CITY -- One of the largest and last major manufacturers remaining in Carter County is in negotiations to sell a facility employing hundreds of Tri-Cities workers and generating more than $200,000 in property tax revenues for the county.
   A Siemens company spokesman confirmed Thursday that the company is talking with a potential buyer for the Siemens Electronics Manufacturing Center (EMC) located on Bill Garland Road in the Okolona area of Carter County. The site also lies within the corporate limits of the city of Johnson City.
   "We are talking to an interested party now," Steve Morgan, spokesman for the Siemens Energy and Automation office in Atlanta, said Thursday afternoon. "We announced some time ago we were selling the facility."
   The Johnson City Siemens EMC facility has been on the market for over one year, according to Morgan. He said Siemens officials had been in talks with "several different interested buyers" regarding the facility. He declined to comment on the identity of the buyer or discuss the progress of negotiations.
   A division of the multinational Siemens AG conglomerate, Siemens EMC presently employs 480 workers at the Johnson City facility. Whether a potential sale could mean closure or layoffs of workers is unknown. Morgan said Siemens wants to protect the existing workforce and find a buyer interested in continuing operations at the plant.
   "It has been our goal of finding somebody who recognizes we have a good workforce and a productive facility," he said.
   He stated the company has actively sought a buyer interested in taking advantage of the facility's profitability and existing manufacturing contracts. Siemens EMC won a $10 million contract in April from Knoxville, Tenn.-based IdleAire Technologies to assemble key components of its Advanced Travel Center Electrification (ATE) system marketed to the trucking industry.
   "We have a good workforce; we have a good facility, and we have a good contract with IdleAire," Morgan said. "We don't think the facility is going to close."
   Siemens EMC operates a second facility located in Lebanon, Ohio that employs 103 workers. Morgan could not speculate if both facilities would be sold as a package deal. The two operations have produced electrical assemblies for dozens of companies such as General Electric, IBM, General Motors, Intel and Siemens.
   He said when Siemens originally purchased the Johnson City facility, the site's manufactured product was being outsourced to the United States from Germany. The facility was a contract manufacturer and the product identified the site as a "center of competency" for the company selling to several global customers. That center has moved back to the Siemens AG's corporate headquarters in Germany.
   "It is a profitable operation," said Morgan. "It just doesn't match up with Siemens center of competency."
   Siemens EMC represents an important corporate citizen for Carter County's property tax base. The company paid real property taxes of $93,240 and personal property taxes totaling $110,811 for the 2003 tax year, according to the Carter County Trustee's office.
   Like scores of U.S. manufacturers big and small, the company's workforce that once reportedly neared 1,000 employees has dwindled considerably in recent years - a phenomenon Morgan said mirrors the company's energy group and entire manufacturing operation.
   "We have reduced head count everywhere including at our location in Atlanta," said Morgan who added that the last employee reduction at EMC was voluntary.
   A division of the multinational Siemens AG conglomerate under the Energy and Automation group, Siemens EMC built its current facility in Carter County during the mid-1990s shortly after the company purchased the Texas Instruments company in 1991. A five-time Tennessee Quality Award winner, the Siemens EMC facilities manufacture high complexity electronics manufacturing services (EMS) including tinted wire circuit boards and other computer control and interface technology. Since production began in 1995, EMC's Johnson City site has manufactured more than 2.5 million programmable logic controllers and peripheral devices.
   With operations in more than 190 countries and a 2003 fiscal year net income of $2.8 billion, Siemens AG conducts business in seven groups: Information and communications, automation and control, power, transportation, medical, lighting and financing and real estate. The electronics and engineering giant announced June 8 it planned to consolidate sales and service operations in Germany under a single executive on Oct. 1.
   Siemens AG also owns the Siemens Westinghouse Specialty Services located in the Watauga Industrial Park, which employs roughly 40 people.