Electronics: Wired Workforce
The electronics industry is full of stories of whiz-kid entrepreneurs who amassed fortunes from good ideas. Such is the case of Cabletron, a computer networking firm born in a garage in Rochester, N.H. The company is the brainchild of Craig Benson, then 25, who had never been to college, and cofounder S. Robert Levine.
Cabletron went from 0 to $1.1 billion in sales in just 14 years. It now owns 30 percent of the computer networking hardware and software market. Going public in 1989, the company has chalked up 32 consecutive growth quarters and annual revenue gains in the range of 28-35 percent. Cabletron's two-man start-up team has grown to 6,600 employees, including 1,500 engineers, seven R&D centers across the U.S., over 100 offices worldwide, and the industry's broadest product line. Most important, Cabletron is the only company in the local area networking industry performing its own manufacturing (others outsource production).
Part of the company's high-flying success resides in Ironton (Lawrence County), the most southerly of the Appalachian Ohio communities. It was here that Cabletron, which had run out of available labor in Rochester, put its first plant outside of New Hampshire in 1988.
Cabletron set up shop in an old multi-story shoe factory in Ironton. It knew the area had sufficient labor to handle its mach-speed growth. And it knew the area's reputation for reliable and trainable labor. The initial 20-employee work force has bloomed to 460 working two shifts.
"The people who came down from New Hampshire to train that first group were astonished at how good the employees were," recalls plant manager B.J. Hannon. "The trainers scheduled a week-long session to teach the new employees what they needed to know about electronics. By Wednesday morning the trainers reported the employees were ready to go out on the floor. We started in February 1988 and by June the corporate office told us we were doing better than the work force in New Hampshire -- and we had all inexperienced people with no prior knowledge of electronics."
Last year, for the first time, Ironton shipped more product than any other location, reports Hannon. "We also had the lowest failure rate -- both perceived and actual -- of any Cabletron location," he says.
Two other elements make this story unusual. The time came when manufacturing in layers at the old shoe factory was a handicap. The company needed a bigger, more modern facility. Knowing that level industrial sites in Lawrence County were scarce, Cabletron scoured neighboring Kentucky and West Virginia for sites.
But Ironton wasn't going to let this one get away. "I casually mentioned to a city official that we needed a new site and joked that the only one available in Ironton was the baseball field." recalls Hannon. "Within half an hour I got a call saying 'it's yours.' We were happy -- even though we got fantastic offers from neighboring states, we didn't want to move out of this area because we didn't want to lose our work force."
At 120,000 sq. ft., the new facility is big enough to hold the 160 additional employees Cabletron will hire over the next couple of years, and then some.
The project taps a financing package composed of five different funding sources. Put together by the Lawrence County Economic Development Corp., the package uses the state's "166 loan program," which is based on liquor profits. In addition, there is funding from the Appalachian Regional Commission, a Community Development Block Grant, use of Ohio's road and infrastructure funding program and, finally, a commercial bank loan.
One of Ironton's largest employers, Cabletron is a generous corporate citizen. In one project, the local schools won a pilot program for internet links with Athens, Columbus and other stations. School officials asked Cabletron to help, and the company was pleased with the opportunity to showcase its products and contribute to education upgrades. The original estimate for the networking equipment was $120,000, but when all was said and done Cabletron donated about $300,000 more equipment. "This contribution opens new horizons in education for Lawrence County," says Lawrence County economic development executive Pat Clonch. "For example, we didn't have classical languages in our high schools, but with this technology we can tap into Athens or elsewhere and give our students access to many opportunities. This makes us part of a bigger community."
| One of the features Cabletron likes about Ironton is access to the cultural, education and shopping opportunities in the tri-state area. There is an Ohio University regional campus and a hospital in Ironton. Across the river in Huntington, W.Va., are Marshall University and the wealth of shopping opportunities a good-sized metro area provides. |
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And, of course, what company wouldn't be pleased with Lawrence County's property taxes: the rate is the lowest of Ohio's 88 counties.
