Bush to Visit O.C. Survivor of Recession
When George Bush visits Odetics Inc. in Anaheim this afternoon, he will see not just robots and satellite recorders, but an example of the Southern California defense and aerospace industry in transition.
Once dependent on federal contracts, Odetics has cut its reliance on the government to just 37% of revenue. And the 600-employee company has doubled its investment in research and development in the face of plunging profits.
As White House advance teams and communications specialists roamed the company’s production facilities Wednesday, company Chairman Joel Slutzky made no secret that he was already overwhelmed.
“This would probably be different if it were Rockwell or Hughes,” said Slutzky, the bearded, white-haired co-founder of the company that is only a block east of Disneyland. “They probably would have a group that could handle this. You talk about being overtaxed. Our communications group is made up of three people.”
But the Bush team said it didn’t want to call on the larger, high-tech giants, battered by cutbacks in the aerospace and defense industries. Although Odetics has taken a few hits itself during the recession, its move away from a downsized defense industry to broadcast, cable and computer communications appears to have been the factor in softening the blow.
“I don’t know all of the reasons why we were selected,” Slutzky said. “I would like to think it was the creativity of the company. I tell our associates to take pride, that it is due to them that we were selected.”
Odetics now has a diverse product line of space data recorders and video security systems as well as an automated video and computer tape storage system. As far as politics goes, its only link to Washington is an Odex Robot on permanent display at the Smithsonian Institution. Company executives decline to publicly support candidates.
Even so, Odetics employees--termed “associates”--won’t be acting like Stepford workers when Bush comes. As one employee put it, the Bush campaign “wanted to see a successful thing with his face on it.” On Wednesday, some thought of questions to ask Bush, in the event he holds a question-and-answer session.
“My question would be simple: ‘How do we get the economy moving again?’ ” said Margaret Lamb, 58, vice president and director of operations for the company’s space division. “I can’t see us tolerating four more years in the downtrend, especially in aerospace. I can’t see it.”
Lamb, who supported Bush in 1988, has yet to decide on her choice for President. But she said that she has been concerned about her two college-age daughters, who have to depend on her because they are having trouble finding good jobs.
But the economy wasn’t on everyone’s mind. Val Johnson, 31, an engineer, said he would ask the President how he would resolve the abortion issue. He plans to support Bush, mainly for his anti-abortion stance.
“I have serious questions about (Bill Clinton’s) character, his family values,” he added. “It is an important issue.”
Even so, company executives are treating Bush’s speech as strictly a presidential visit, rather than just a stop on the campaign trail, and want to stay out of the political fray. They plan to hold a press conference after the speech, hoping to capitalize on the media attention to outline Odetics’ array of products.
“I’m not surprised that Bush picked a company like (Odetics),” said William Gibson, a senior analyst with Cruttenden & Co., an investment banking firm based in Irvine. “It is one of the most creative companies out there. It has the lowest turnover rate of any electronics company in California. And they have a Japanese-like dedication to quality.”
Odetics was founded in 1969 when Slutzky and five co-workers in the aerospace industry quit their jobs to create tape machines that record data in space. Updated versions of the product are used on satellites and space shuttle missions.
When the company started, all of its work was done through government contract. Now, Slutzky is quick to point out, no one product line accounts for more than 30% of its sales.
Even so, profits have been marginal, largely because of the cost of developing new products. Odetics came dangerously close to posting a loss in fiscal 1992.
“We have walked a fine line between maintaining our 22-year operating profits and developing new products and jobs during what was a tough time last year,” Slutzky said.
The company’s profits fell 91% to $89,000 in the 1992 fiscal year ended March 31, compared to $1 million in net income a year earlier. Revenue fell 3% to $70.3 million. Meanwhile, the company spent $5.6 million on research, compared to $2.8 million in 1990.
But the company decided that being dependent on government contracts or a single product could be devastating.
The company developed its first robot in the early 1980s, and banked on selling it to defense and aerospace companies for use in clearing mine fields or working in hazardous mining jobs, said Gibson, who works in Cruttenden’s Santa Barbara office.
But the market still isn’t there, so, instead, Odetics applied the technology to automated videotape storage systems, in which robotic arms deliver tapes into drives, making it possible to program an entire day’s worth of television broadcasts on computer databases, he said.
More recently, Odetics introduced automated storage libraries for mid-range computer systems, a $4-billion market that could help triple the company’s sales by 1995, Gibson said.
But the mid-size company’s array of technical gadgets--which are well-known nationally--at times have played second fiddle to its enviable work environment. It was once rated one of the top 100 companies to work for in the United States. (In Orange County, Disneyland was the only other company named.)
“You have to have the flavor of the individual,” Slutzky said. “The real story here is the environment, the people. It is what fosters creativity.”
The offices include an indoor heated pool and exercise room, and the lobby is furnished with footstools in the shape of human feet.
In fact, company officials breathed a sigh of relief when they found that the President was coming on Thursday, not Friday as first thought.
Friday is casual-attire day, meaning no ties or suits, he said, and “we haven’t changed that for anyone in the history of the company.”
