Troubled Cushman Electronics to Halt Production in San Jose

As part of a companywide restructuring program, Cushman Electronics in Newport Beach said it will close its production facility, located in San Jose, idling 30 of the company’s remaining 66 workers. The factory is to be closed by the end of the month, the company said Wednesday.

In addition, the loss-ridden company will discontinue several unprofitable product lines that account for 50% of sales, said Vice Chairman Mark K. Howlett. The products include monitors and maintenance instruments for two-way radios.

Howlett said the scaled-down company will retain its profitable businesses, which include factory service, customer-funded research and distribution of cellular radio test sets, which will be manufactured by Mexican suppliers.

Deal to End Lease

Cushman has negotiated out of its five-year lease at the 40,000-square-foot manufacturing facility that it once owned. It sold the building in 1985 for $5.2 million to pay off debts. In 1985 the company employed more than 150 workers, mostly in San Jose.

Remaining operations will move to a 4,500-square-foot advanced development facility in the Riverside County community of Rancho California and to a 6,000-square-foot site for product service in San Jose. Corporate offices will remain in Newport Beach.

Howlett said that by concentrating on profitable businesses, the company will return to profitability. But he declined to speculate on when profits might come.

Cushman’s troubles began in 1984 when its introduction of cellular radio test sets was followed by production snags and a weak market. The radio test sets have since become profitable.

Cushman has lost money since 1985, and restructuring expenses will contribute to a substantial loss in its fourth quarter and in fiscal 1987, which ended Sept. 30, Howlett said.

For fiscal 1986, Cushman reported a net loss of $642,000 on sales of $7.7 million.