C-Cor.net Closes Out U.S. Manufacturing Operations

(Telephony) Hammered by the painful combination of existing customers who are cutting back on orders and new customers who are ceasing to exist, old-line cable transmission equipment manufacturer C-Cor.net said today it will close down its last major U.S. manufacturing facility.

The company's manufacturing will now be done primarily in Tijuana, Mexico, and through a variety of outsourced operations. The shutdown of the company's Tipton, Pa., manufacturing facility will account for about 90% of 500 job layoffs the company plans as part of an overall staff reduction of 700. When completed, State College, Pa.-based C-Cor.net will have about 1200 employees.

Concurrent to the facilities shutdown, C-Cor.net also said it was acquiring MobileForce Technologies, a privately held corporation that develops and markets workforce management applications and wireless mobile computing solutions. The company will use the 65 Pleasanton, Calif.-based MobileForce employees to further its move into the services business, said David Woodle, chairman/CEO.

Although not coincidental, the two moves do not indicate C-Cor.net is abandoning the transmission manufacturing business it has pursued for more than 50 years, Woodle emphasized.

"We're still investing significantly in R&D and are moving forward in the products side of our business. We're not going to disband that, not going to move away from it," he insisted.

On the other hand, when existing customers such as AOL Time Warner start holding back orders and new overbuild customers disappear from the landscape, there must be another source of revenue, he continued.

"We're [transmission equipment vendors] all in that life cycle," Woodle said. "The reason we reduced the infrastructure for capacity and equipment isn't because we're getting out of that business, it's because there's no orders for that business."

Woodle said C-Cor.net has been pursuing a five-year "four-step plan to [place] 50% of our business in the service and management side and 50% of our business from the products [side], both optics and electronics for RF."