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Carmanah Technologies


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#1 VicHockeyFan

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Posted 25 June 2008 - 03:35 PM

Carmanah cuts staff, closes Victoria plant
High tech success story suffers blow; new facility to close by Feb. 2009
Darron Kloster, Times Colonist
Published: Wednesday, June 25, 2008

Carmanah Technologies Corp. is slashing its staff by 40 per cent and closing its production facilities in Victoria.

The solar powering and lighting company announced the sweeping changes at a press concference this afternoon, saying the staff reductions and closure of its enterprise manufacturing facility in Saanich are part of a "strategic renewal process" designed to return Carmanah to profitablity.

Carmanah employs 260 people. They are employed at its manufacturing plant, in research and design, marketing and administration at its Harbour Road headquarters as well as in smaller distribution and sales offices in California and Calgary.

There will be 85 staff laid off across the company, including the executive level. There were 24 staff laid off today and 72 local jobs will be gone by the end of the year with the remainder of the positions eliminated by February.

The enterprise facility in Saanich - opened just two years ago - will close by February 2009.

Outsourcing of some Carmanah products began six months ago, resulting in early layoffs.

The distribition centre in California will close in September and the office in Calgary will shut by October, with administrative positions in those offices moving to Victoria.

"With the implementation of these initiatives, the company's employee population is expected to decline by approximately 40 per cent by early 2009 as a result of workforce reductions and attrition," Carmanah's website said.

"The majority of these reductions, which relate to the production outsourcing initiative, will be started by July 1, with final reductions, which have already been planned and communicated for required staff involved in the transition of the Victoria manufacturing, Calgary, Alberta, and California facilities, carried out by December 31."


Carmanah, which trades on the Toronto Stock Exchange, has been struggling financially for years with operating costs high, net earnings spiralling downward and its share price languishing in penny stock territory. Chief executive Ted Lattimore, who took over the top post last year froim Art Aylesworth, started making changes to his executive and product line late last year. Aylesworth resigned as chairman of the board last week.

Lattimore announced today the company will outsource manufacturing and distribution of its solar technology products to Flextronics International Ltd. Headquartered in Singapore, Flextronics is an electronics manufacturing services provider which delivers complete design, engineering and manufacturing services to automotive, computing, consumer digital, industrial, infrastructure, medical and mobile originbal equipment manufacturers.

Carmanah said it will focus on the sale of its products, rather than than the manufacturing and distribution end. The company has solar lighting products for the marine, avaiation and traffic industries in more than 125 countries, including major contracts to supply the U.S. military and coast guards.

"The initiative ... will enable Carmanah to better serve its customers across its key markets, while improving operational efficiency, controlling costs, and focusing resources on key revenue-producing activities," said Lattimore in a statement. "Management continues to take a measured approach to our business in this year of our transition. The restructuring should allow us to maintain revenues at approximately $60 million and provide a positive EBITDA before restructuring costs in 2008, as stated in earlier guidance. Overall our metrics will improve as we move forward, as a result of the strategic lighting business becoming a bigger portion of the future revenue mix."

Lattimore also said the company's sales force will be reduced to a "regional model," which is expected to create new opportunities for the company

Carmanah said based on the restructuring, a provision of $3 million is expected to be charged to earnings over the next several quarters with about half estimated to be recorded in the quarter ended June 30. The one-time charge includes a $2 million write down of assets and a provision of $1 million for cash payments relating to employee, facility and lease-termination costs.

"This transition, while difficult, is essential to Carmanah becoming a more efficient Company," said Lattimore. "Carmanah has come a long way in recent month. The Company has solidified the balance sheet, and achieved a return to profitability in Q1 2008," said Lattimore.

"To maintain this positive trend and ensure the long-term success of the Company, we need to adapt to the realities of our competitive global marketplace - we can do this as a more agile and responsive business, by focusing on our core strengths, keeping costs low, and increasing the scalability and efficiency of our supply chain."

#2 G-Man

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Posted 25 June 2008 - 03:36 PM

I guess the Mayor of Central Saanich will be pleased as punch.

#3 VicHockeyFan

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Posted 25 June 2008 - 03:38 PM

Really this is the way they had to go. Sales is the only thing you ought to be doing here, not manufacturing. That can be done offshore for a fraction of the price.

Now you can see why Aylesworth left, and you can't say Lattimore hasn't put this perennial money-loser onto a better path for the shareholders.

#4 G-Man

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Posted 25 June 2008 - 03:50 PM

Yeah I agree too bad the head office moved though.

#5 VicHockeyFan

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Posted 25 June 2008 - 04:10 PM

Yeah I agree too bad the head office moved though.


The distribition centre in California will close in September and the office in Calgary will shut by October, with administrative positions in those offices moving to Victoria.


I'm not sure what you mean....

#6 UrbanRail

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Posted 25 June 2008 - 04:52 PM

Really this is the way they had to go. Sales is the only thing you ought to be doing here, not manufacturing. That can be done offshore for a fraction of the price.

Now you can see why Aylesworth left, and you can't say Lattimore hasn't put this perennial money-loser onto a better path for the shareholders.

Sweet now more jobs are being lost to asia.
With gas prices going up, is it really smart to be outsourcing to even farther areas of the planet?

#7 Holden West

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Posted 25 June 2008 - 04:58 PM

A Business Examiner article from just a few weeks ago said Carmanah burned through tons of money manufacturing elaborate custom-made devices for their customers when standard or even off-the-shelf solutions would have made more sense.
"Beaver, ahoy!""The bridge is like a magnet, attracting both pedestrians and over 30,000 vehicles daily who enjoy the views of Victoria's harbour. The skyline may change, but "Big Blue" as some call it, will always be there."
-City of Victoria website, 2009

#8 VicHockeyFan

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Posted 25 June 2008 - 04:58 PM

Sweet now more jobs are being lost to asia.
With gas prices going up, is it really smart to be outsourcing to even farther areas of the planet?


Yes, it is very lucrative.

#9 rjag

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Posted 25 June 2008 - 06:10 PM

I guess the Mayor of Central Saanich will be pleased as punch.


Saanich

This is typical of most of the high tech companies on the Island. No matter how Viatec spins it, this is an expensive place to do business. IVL went this route more than 5 years ago and they are a ghost of what they used to be. Contech just merged with another company and is moving most of their production elsewhere.

Until our Provincial and Municipal "leaders" wake up to the fact that the current model doesnt work on the south island, you will read more and more of these stories.

Admittedly, our strong Loony probably has a lot to do with this, but we just have to learn to do more with less to compete.

Wait for a few months to see what a mess the Tourism side of our City is in

#10 spanky123

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Posted 25 June 2008 - 06:28 PM

Good thing UVIC is planning to spend $20M to expand the tech park!

#11 VicHockeyFan

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Posted 25 June 2008 - 06:28 PM

Saanich

This is typical of most of the high tech companies on the Island. No matter how Viatec spins it, this is an expensive place to do business. IVL went this route more than 5 years ago and they are a ghost of what they used to be. Contech just merged with another company and is moving most of their production elsewhere.

Until our Provincial and Municipal "leaders" wake up to the fact that the current model doesnt work on the south island, you will read more and more of these stories.

Admittedly, our strong Loony probably has a lot to do with this, but we just have to learn to do more with less to compete.

Wait for a few months to see what a mess the Tourism side of our City is in


Anyone know the health of Power Measurement?

http://www.pwrm.com/

EDIT: I forgot, they got bought out. They are part of a huge co. now.

#12 osmich

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Posted 26 June 2008 - 07:05 AM

It was almost like a newspaper headline read to capture the reader that VicHockeyFan displayed.

Did Carmanah say they were closing, like finished? I don't think so. Shifting strategies more like it. Why the scary headline?

#13 spanky123

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Posted 26 June 2008 - 07:35 AM

Darren and Andrew don't like to be screwed around with.

Go ahead and feed them fluff about how well your company is doing and all of the gerat things that you are accomplishing but then don't complain when they get through the BS and make you pay for it.

#14 Ms. B. Havin

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Posted 26 June 2008 - 07:54 AM

^ <snore...> @spanky123: you don't really believe that the reporters get to make up their own headlines, do you?

That's the editors at the T-C, stirring the pot to help sales.

PS: if you think you know Darron so well, at least spell his name correctly.
When you buy a game, you buy the rules. Play happens in the space between the rules.

#15 Holden West

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Posted 26 June 2008 - 08:00 AM

Executives say worst is over for Carmanah Technologies

Darron Kloster, Canwest News Service
Published: Wednesday, March 12, 2008

VICTORIA -- Carmanah Technologies Corp. reported an $8.9-million year-end loss Tuesday, but executives say the worst is over for the Victoria-based solar power and lighting company.

"We've weathered the storm of 2007 and have a stabilized approach to 2008 with a strong balance sheet," CEO Ted Lattimore told analysts in a conference call.
"Beaver, ahoy!""The bridge is like a magnet, attracting both pedestrians and over 30,000 vehicles daily who enjoy the views of Victoria's harbour. The skyline may change, but "Big Blue" as some call it, will always be there."
-City of Victoria website, 2009

#16 spanky123

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Posted 26 June 2008 - 04:05 PM

^ <snore...> @spanky123: you don't really believe that the reporters get to make up their own headlines, do you?

That's the editors at the T-C, stirring the pot to help sales.

PS: if you think you know Darron so well, at least spell his name correctly.


Never said I knew Darron.

As Holden pointed out, Carmanah management stated not once but many times (as recently as last month) that the worst was behind them and that the cost cutting and restructuring was done. Employees purchased cars, bought homes, and left other careers because they trusted management and believed that the future was brighter.

Now we find out that for the past 6 months management was in fact planning to chop a huge part of their workforce again. Both the media and employees were played for suckers hence I think that the headline was deserved.

#17 maniac78

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Posted 21 August 2008 - 02:54 PM

Management took the right actions to protect the share holders of the company and return the company to profitability. That's the only choice they had. If nothing was done they would have lost their jobs. That's how it works in a publicly traded company.

#18 spanky123

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Posted 21 August 2008 - 04:05 PM

Management took the right actions to protect the share holders of the company and return the company to profitability. That's the only choice they had. If nothing was done they would have lost their jobs. That's how it works in a publicly traded company.


Nobody is disputing that. What I said was that it was wrong to tell employees and the media that everything was under control and that no more cuts were coming when in fact they were planning to cut their workforce.

#19 VicHockeyFan

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Posted 21 August 2008 - 06:27 PM

Nobody is disputing that. What I said was that it was wrong to tell employees and the media that everything was under control and that no more cuts were coming when in fact they were planning to cut their workforce.


Sadly, you have to do that too, to protect the share price.

#20 Nparker

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Posted 21 August 2008 - 07:03 PM

Sadly, you have to do that too, to protect the share price.


It's simple math really.

Shareholders = good
Employees = bad

however...
Company - (all) Employees = zero (profit for shareholders)

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