ROCHESTER HILLS – Energy Conversion Devices on Thursday announced its board has unanimously approved a restructuring plan to shift focus from an R&D-based company to one that commercializes its alternative energy products to take advantage of growing interest in solar power and hybrid electric vehicles – and more importantly make money in 2006. But the restructuring will result in some layoffs among the staff of 350.
ECD CEO Robert Stempel, the former General Motors CEO, said the restructuring plan will increase EDCs product revenues while enabling the company to carry out major cost-reduction measures, including significant reductions in the workforce to right size activities to support our core commercial businesses. Stempel didnt say how many employees would be eliminated, but said that announcement would be made in October.
“Our strategy is to move ECD from a highly successful research-oriented company to the next phase of development, which is to commercialize the products we have developed and concentrate on growing sales revenues and equity value in our core commercial businesses, the company said in a press release. Our goal is to move the company into a position of sustained profitability by July 2006.”
Company founder Stan Ovshinsky said as ECD transitions to a more commercially focused business, the company will need to change the mix of skills within the organization.
Despite our commitment to fast growth in our core commercial businesses, we will unfortunately be losing some good people over the next few months, Ovshinsky said. We appreciate our colleagues’ many contributions to the company and look forward to the future.”
He said the market for photovoltaics is expanding at 20-25 percent annually and United Solar Ovonic is experiencing strong demand for its products with sales up more than 70 percent in Fiscal Year 2004 compared to Fiscal Year 2003.
Whats more, a successful battery settlement agreement among ECD, Ovonic Battery, Cobasys, Matsushita Electric Industrial Co., Panasonic EV Energy (PEVE) and Toyota Motor Corporation provides for technical cooperation between Cobasys and PEVE and offers important advantages for Cobasys in North America, Ovshinsky said.
ECD will seek to develop advanced energy and information products, form joint venture companies and strategic alliances to transition these activities into commercial businesses, and strengthen its equity growth. Increased license and royalty income will be sought from its extensive Intellectual Property portfolio.
But non-core business activities will be downsized, licensed or spun off to improve cash flow, which will in turn help fund advanced development activities to provide future innovative business opportunities, to maintain and extend the company’s extensive Intellectual Property base, and to transition new inventions into commercially viable products.
The core commercial businesses on which ECD will bet its future include:
United Solar Ovonic Corp., a wholly owned subsidiary, manufacturing and selling its proprietary lightweight flexible Ovonic solar panels and photovoltaic systems for a variety of applications into a rapidly expanding market;
Cobasys, a 50-50 joint venture with ChevronTexaco Technology Ventures LLC (ChevronTexaco) that manufacturers and markets proprietary prismatic Ovonic NiMH batteries for hybrid vehicles, telecommunications, and stationary energy-storage applications. These battery systems are the enabling technology for the rapidly growing hybrid vehicle market;
Ovonyx, Inc., 41 percent owned by ECD, develops and licenses its proprietary Ovonic Unified Memory (OUM), a non-volatile memory technology that is currently being commercialized by Intel, STMicroelectronics and BAE;
Texaco Ovonic Hydrogen Systems, a 50-50 joint venture with ChevronTexaco that is developing and commercializing its proprietary reversible solid metal-hydride-based low-pressure hydrogen storage systems for a variety of stationary and transportation applications.
