White City transformer firm will lay off 110

WHITE CITY — Volatility is nothing new for Pacific Crest Transformers, which said this week it plans to layoff 110 employees in November.

The company, which designs and constructs liquid-filled distribution electrical transformers at its plant on West Antelope Road, has rolled with the economic punches since it was built in 1969. Transformer industry insiders suggest the layoffs are a prelude to a potential bankruptcy filing.

Los Angeles-based equity firm OpenGate Capital acquired the plant from French conglomerate Areva for $7 million in February 2005. Pacific Crest serves more than 200 customers in 50 states.

The manufacturer grew to more than 150 employees before the Great Recession forced layoffs. But the company rebounded, with employment returning to historic highs and reported back orders just a couple of years ago. In 2016 it added a component plant in Monterrey, Mexico.

But this week the rank-and-file were rocked when Pacific Crest said it would lay off about three-quarters of its staff. The union representing its hourly workers received a WARN (Worker Adjustment and Retraining Notification) notice from Chief Financial Officer Bruce DeLine.

"Due to financial reasons," DeLine wrote, Pacific Crest Transformers is substantially reducing the size of its workforce. Union and non-union employees will be permanently terminated on or about Nov. 13.

The notice was sent to Banjo Reed, business manager, for International Brotherhood of Electrical Workers Local 659 in Central Point.

Reed didn't respond to telephone messages at the union office or on his cellphone.

Juan Carlos Escobar, PCT's interim CEO, was in Mexico, and unavailable for comment. Other employees declined comment, saying they were told not to talk with reporters.

The mass layoff notice is the 23rd involving Oregon employers this year, but it's the first in Jackson County since MAG Retail and Media Groups pulled the plug on Motorcycle Superstore's Medford operations in 2015. The state's largest layoff announcement this year was by Nike, saying it was terminating 745 employees.

While Pacific Crest was mum about its future, there was speculation by outsiders with a handle on the industry that the company's ailing finances were leading it toward bankruptcy court protection.

That despite an IBEW report to its membership heading into 2014 that said Pacific Crest Transformers "continues to do well with a backlog of orders for the custom-built transformers it ships worldwide."

In December 2015, the company said it had doubled the size of its largest transformer, with the capability of manufacturing transformers up to 30 mega volt-amps after adding new testing equipment and coil winding machines. In early 2016, PCT said it would double its Jackson County output by opening a manufacturing facility in Monterey, Mexico — where several major transformer manufacturers are clustered.

Jack Roberts, president and CEO of Pacific Crest Transformers at the time, said the Monterey facility would produce transformer components for final assembly here. Roberts is now president of another OpenGate Capital operation, Power Partners, in Athens, Georgia.

— Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, and on Facebook at www.facebook.com/greg.stiles.31.

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