ACW Technology founder details factors in Durham plant’s closure

Feb. 25, 2013 @ 06:32 PM

A severe downturn in its United Kingdom business and other factors led to the shut-down of contract electronics manufacturer ACW Technology’s plant in Durham, the company’s founder and executive chairman said Friday.

The majority of the assets of United Kingdom-based ACW Technology Limited were sold to another United Kingdom based company, TT electronics. Equipment in a plant in Durham that is no longer operational was not included in the sale to TT electronics, and neither were a factory and purchasing office in China. The equipment from the Durham plant and those businesses in China are being sold separately.

“It’s really a distress sale,” Chris Woods, founder and executive chairman of the company, said in an interview Friday.

The Durham plant was set up as a contract manufacturer to supply high-tech electronics to other American companies, Woods said. The company refurbished the facility, bought new equipment and opened the plant in 2010.

The company was approached a by a “large LED lighting company” that had a made-in-America requirement for work for the Durham plant. So Woods said ACW recruited staff, and had about 50 people working in the plant.

But Woods said ACW Technology was unable to asses cost of the work that was being undertaken. It turned out it was not profitable, and the customer would not pay more, he said. He said ACW couldn’t modify the design to make it more cheaply.

“So we lost a lot of money, and we had to say goodbye to a lot of people,” Woods said. “It was rather sad. Then we went back to our original plan of trying to build up slowly, and unfortunately, the parent company in the U.K. has had a severe business downturn, and we could no longer afford to put the resources in to keep the plant open until we reached a point of profitability.”

Woods declined to name the company that contracted ACW. But Cree, an LED company that sells light-emitting diodes, or LEDS, along with LED lighting systems, components and chips, is based in Durham. A spokeswoman said Monday that Cree officials declined comment for this story.

Woods said the plant made lighting products until the spring of 2011, and then he said they went about their original plan, which he said was to try to win new customers.

That continued through 2012, but the company was still not profitable, Woods said. With the large downturn in the United Kingdom business, he said the company couldn’t afford to keep the Durham plant running.

“The real, the intended plan, had been to find high-tech electronic customers with electronics manufacturer requirements in the U.S., some of them companies we already knew from our United Kingdom business, and to win business form them, and bring it into the plant as a very well-equipped, competent organization, with good systems and good people,” Woods said. “It’s very sad that we failed.”

In December, TT electronics announced the acquisition of the majority of the business and assets of ACW Technology Limited. The company said in a news release that it acquired ACW’s manufacturing operations in the United Kingdom.

Separately, ACW’s manufacturing subsidiary and a purchasing office in China are being sold, according to the website for holding company ACW International. Woods said the business from the facilities in China is being transferred to TT electronics.

In addition, equipment from ACW Technology’s former 30,000-square-foot facility in Durham is scheduled for auction Wednesday, according to the website, http://www.thebranfordgroup.com/DNN3/Auction/ACWT0213.aspx.