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Sunday, July 15, 2001

By Jim McKay, Post-Gazette Staff Writer

Three floors of manufacturing space housing 155 workers is all that's left of the former Contraves Goerz Corp., once one of Western Pennsylvania's high-tech stars with more than 1,100 employees.

	Contraves Inc. President Ty Eggemeyer says the company, which designs and manufactures high-tech assemblies, has hired 40 people over the last year and a half and intends to hire another 75 over the next 15 months. (Darrell Sapp, Post-Gazette)

Yet Ty Eggemeyer has reason for optimism about the company, which was renamed Contraves Inc. after a 1990s restructuring that saw it abandon the cyclical defense business.

Eggemeyer, 42, Contraves' president, has in four years transformed the company into a contract manufacturer of high-tech circuit boards and electromechanical systems and sees opportunities for growth.

"It's companies like us, 100 other companies like us, that are going to grow Pittsburgh," said Eggemeyer, who took the job as Contraves president in 1997 after working for McKinsey & Co., the management consulting firm, and as director of business development for a manufacturing firm.

Contraves has hired 40 people over the last year and a half and intends to hire another 75 over the next 15 months as it grows its business of designing and manufacturing printed circuit assemblies.

The company today occupies 140,000 square feet of a sturdy brick building that was once part of the Westinghouse Electric Corp. plant in East Pittsburgh, now the Keystone Commons industrial park.

"This is a clean, safe plant," Eggemeyer said. "These are good-paying jobs that give people technical skills. They are the kinds of jobs that Pittsburgh wants and needs, I think."

Human resources manager Ellen Marino was hesitant about revealing salaries, but said experienced assembly operators, the plant's largest group of employees, can earn an average of $9 to $10 an hour while technicians can make on average $13 to $14 an hour. The company also employs about 10 electrical engineers.

Hobbled by an aggressive expansion program and a slowdown in military contracts, the company started retrenching in the 1990s. Its three-building campus in the RIDC Park in O'Hara was sold. Defense businesses were jettisoned, including a Pittsburgh maker of telescopes and electro-optics systems now known as Brashear LP.

"Contraves basically was a military company, a thousand people, and never made any money," Eggemeyer said, declining to divulge specific numbers. "They lost a ton of money, real money even to a corporation."

	The Profile Company name: Contraves Inc. Business: Designs and manufactures high-tech printed circuit assemblies and systems Headquarters: Keystone Commons, East Pittsburgh History: Contraves is the successor to Contraves Goerz Corp., which once employed about 1,000 people in Pittsburgh. The name Contraves was developed in 1974 from the combination of two companies: the Fecker Systems Division of Owens-Illinois (from the J.W. Fecker Co. established in 1881) and the Goerz Optical Co. Employees: 155

When Eggemeyer arrived, the worst of the cutting was over, although he initially reduced staff too. The surviving business was building optical bottle inspection equipment for a major glass maker.

By Eggemeyer's admission the company had a deteriorating relationship with its sole customer, whose name he does not want to see in print. He said that relationship has since turned around.

Although that business required electronic assembly, the technology was old and limited to hand work. There was no capacity to do high-speed machine assembly of circuit boards, or surface mount technology, and Eggemeyer quickly decided that new investment was required.

"That was our only chance of survival," he said. "The plant was within two months, three months, of closing at the time."

Unaxis, the Swiss parent formerly named Oerlikon-Buhrle Group, was not about to pour more money into upgrading a venture that had been unprofitable, Eggemeyer said. Contraves would have to raise its own cash and did.

"In a nutshell, we rationalized head count, kept the best performers and put in place training programs. And we started focusing on higher reliability electronics. It's an entire business makeover."

Contraves has transformed parts of the old Westinghouse building it occupies into a modern well-lighted assembly area. Anti-static floors were installed, and windows and work stations have been replaced. The size of middle management was reduced and manufacturing work was organized into cells.

Hand soldering is still done, but the factory buzzes with newer machinery that robotically places the electronic components onto boards before individual inspection and testing. Contraves will design the circuit board or make a board of customer's design.

In addition to the board assembly and layout, the plant builds related wire and cable assemblies. It also includes machine and paint shops that can manufacture and repair complete systems.

Eggemeyer said the company has been consistently profitable since his arrival with sales expected to be in the neighborhood of $30 million to $35 million this year. He optimistically projects a sales range of between $45 million and $50 million next year with a target of $100 million within five years.

"We may even make some strategic acquisitions because this business is geographic," Eggemeyer said, adding that most of his customers are based in Pennsylvania, Ohio, Michigan, Indiana, New Jersey, Virginia and Washington, D.C.

Employees interviewed randomly during a tour acknowledged that the business appeared to be swinging upward after a near brush with death. Away from Eggemeyer's hearing, they give him credit for the accomplishment.

"We were on a down slope," said Margareta Glunt, an assembler who started with the company 20 years ago at the RIDC Park when it was much larger and flush with defense contracts. "He brought it back up, and he's still bringing it up with new equipment, new customers and employees."

Eggemeyer grew up in Texas on a small farm that grew cotton and feed grain for cattle. It was a life that he wanted to leave.

"We called it a jack-rabbit farm because a jack rabbit would starve to death on 40 acres," he said. "It was just a dry land farm."

Early in his career he worked as a merchandise manager for Target, the department store. After graduate school, he took a job with McKinsey, where he worked for five years, and then joined Precision Cast Parts, a manufacturer. He learned of Contraves from a director who was a McKinsey alumni.

He says his best reward so far has come from long-time employees who have noticed the changes.

"What makes you feel good is when someone from the shop floor tells you that you saved the company and thanks you. That's what gets you charged up. You can't imagine the feeling."