By Andrew Larson, Republican American
WOLCOTT — A $1.5 million loan from the state will help Devon Precision Industries, the country’s largest privately owned producer of Swiss machine screws, to stay in business in town.
The manufacturer, with headquarters at 251 Munson Road, was on the verge of closing and moving South, where production costs are cheaper. Its chief competitor in the United States, Iseli Company of Terrvyille, recently opted to move to Michigan.
The low-interest loan, granted by the Connecticut Development Authority, will allow Devon and its sister company to restructure their debt, saving 128 jobs between them.
Devon and its companion, Alden Corp., at 1 Hillside Drive, are separate entities, but share resources. The loan means that all current employees at both locations will be retained.
“If we wouldn’t have gotten that money, we would have to lay off lot more people than we did,” said Chief Operating Officer Yvon J. Desaulniers.
The two Wolcott manufacturers have been especially hard hit by the recession, having laid off about 40 percent of their work force in the last two years. Desaulniers said it would be difficult to close the doors of the family business in Wolcott he’s owned for 43 years. For the town, the benefits are mutual.
“They employ an awful lot of people who live in our area and their people not only collect salaries, but spend a lot of money in the area, pay a mortgage and patronize our restaurants,” said Rep. John S. “Corky” Mazurek, D-Wolcott, who helped secure the loan.
Devon, which produces sophisticated gears and other tiny parts, relies on automotive sales for much of its business.
Its components are used in windshield wipers, antilock braking and cruise control systems. Because of lagging car sales, the demand for those items has plummeted.
“We had customers buying every week and now they haven’t bought in six months,” Desaulniers said.
Devon also makes gun parts, including safety arming devices for smart weapons, firing pins and locking devices. Demand in the weaponry sector has stayed relatively constant, Desaulniers said, but it hasn’t made up for the shortfall.
Alden sells products such as the Drill-Out power extractor, which removes broken bolts, and X-Out, which removes damaged screws. They’re sold at stores such as Home Depot, Lowes Home Improvement and Sears — whose sales also are lagging.
Meanwhile, Devon’s facility in China has virtually shut down production, and only employs a skeleton staff. The loan will not be used for the China plant, which may be shut down soon, Desaulniers said.
On top of the 128 jobs in Wolcott that will be retained, he said he expects to create 30 jobs within the next two years. He expects an uptick in orders within the next six months, and said the companies have already hired three new sales positions to prepare.
Under the terms of the loan, the companies must retain their employees, as promised in the application to the CDA. Also, the loan must be repaid, with interest, after 10 years. A clawback provision protects the state’s investment and penalizes any company that doesn’t meet the requirements, said Marie C. O’Brien, president of the CDA.
She said that the loans are only awarded to companies that have viable business models and show a strong likelihood of recovering from their financial problems.
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