High-tech jobs move north
High-tech manufacturing jobs are headed out of the Rogue Valley following the sale of Advanced Machine Vision on Wednesday.
The company's new owner, Key Technology of Walla Walla, Wash., says it will move the manufacturing operations at Medford's SRC Vision to Walla Walla beginning later this year.
SRC Vision, a subsidiary of Advanced Machine, employs roughly 150 people. Key has yet to say how many jobs will be eliminated as the two companies come together, but layoffs are expected. In addition to manufacturing jobs, administrative and sales positions will be cut.
Advanced Machine Vision has 176 full-time employees between its Medford corporate headquarters, SRC Vision and a small Eugene-based subsidiary called Ventek. The corporate headquarters and the manufacturing operation in Medford will close, though the company won't disappear from Southern Oregon.
There will still be an SRC Vision in Medford and employees in Medford, said Key spokeswoman Anita Funk.
Funk said a research and development operation will stay here. Thirty-nine of Advanced Machine Vision's employees work in research and development, though it's unclear whether all are assigned to the Medford office and Funk declined to provide details.
Key plans to make a more detailed announcement today about the future of operations in Medford and Walla Walla as the two companies are combined.
The company was sold for roughly $35 million in cash and stock under a deal approved by shareholders of both companies at separate meetings Wednesday. The merger was first announced in February.
Both companies make sophisticated optical electronic equipment used in manufacturing to spot defects. The systems are used in food processing as well as the tobacco, plastics and wood product industries.
When the deal was announced, Advanced Machine officials said some layoffs were likely to eliminate redundancies but that nothing drastic was being considered.
A merger proxy document filed with the Securities and Exchange Commission by Key says the company expects to see substantial cost reductions by combining the company's sales, marketing, research and development and corporate staff.
It also breaks down the assignments of Advanced Machine's 176 employees: 58 work in marketing and sales, 45 work in manufacturing, 39 in engineering research and development and 34 work in general administration.
Of the $5 million Key says it expects to spend on the merger, $2.9 million of it will be on relocation and severance costs.
As of Wednesday, the company hadn't filed a required legal notice that would precede a mass layoff or the closure of the Medford operation, so the move doesn't appear to be eminent. Under federal law, companies that lay off more than 50 employees or close a plant must give 60 days? notice to state and elected officials.
The upper management of Advanced Machine Vision will be let go and a new manager for SRC was appointed by Key on Wednesday. Rod Larson, who joined SRC as vice president of sales and marketing last spring, is the new general manager.
However, the former top managers will get some help cushioning the fall.
Advanced Machine President and Chief Executive Officer William Young, Chief Financial Officer Alan Steel and SRC Vision President James Ewan get to split $2 million in change of control payments, according to the SEC document.
The trio and Veener Technology — the former owner of Ventek — will get to exercise restricted stock, which works out to 234,524 shares of Advanced Machine stock. That stock was included in the merger and, based on the terms of the deal, is worth more than $527,000.
Advanced Machine has been on the sale block since late last year. The company lost $2.9 million in 1999 and another $1.6 million in the first three months of this year.
Under the deal, Advanced Machine shareholders will get $1 in cash per share along with Key stock and stock purchase warrants. The warrants and the stock have a value of at least $1.25 per share of Advanced Machine stock after two years, so the deal works out to $2.25 a share.
Advanced Machine's stock closed Wednesday at $1.88 a share, up 6 cents. The stock has been delisted and folded into Key, which trades as KTEC on the Nasdaq. Key stock closed at $9.75, down 25 cents a share.