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Saturday, July 27, 2002

Brush Wellman feels brunt of telecommunication industry decline


Staff writer

ELMORE -- The decline of the telecommunications industry has pulled Brush Wellman down with it -- and company officials for the Elmore plant are mum about the future.

The corporation, however, received somewhat good news with the second-quarter earnings report, released Thursday by parent company Brush Engineering Materials Inc.

That report showed while the Cleveland-based corporation was about 22 percent off its sales in the second quarter compared to the same time last year, numbers did improve from the first quarter 2002.

That's somewhat encouraging, especially considering numbers have steadily climbed since a woeful fourth quarter to end 2001.

So what does it all mean for local Brush Wellman workers at the Harris Township plant near Elmore?

Unknown, said company spokesman Patrick Carpenter on Friday.

In a statement released Thursday by the company, cost cutting measures were mentioned as a way to continue to keep Brush Engineering Materials profitable.

"It's hard to say in terms of the future," Carpenter said. "The lack of growth is having an impact on Elmore's production level and employment.

Elmore's ability to add orders and production is going to be dependent on growth in those markets."

"Those" markets include large companies in the electronics, cell phone and cable business that heavily depend on Elmore's plant to make copper beryllium strips.

The strips of flat-rolled copper beryllium are used in everything from switches to components that make up cell phones, pagers, personal digital assistants, semiconductors and other gadgets.

The telecom and computer industries make up about 42 percent of Brush Engineering Materials' sales, Carpenter said.

The problem is, after the events of Sept. 11 and the financial dip the economy suffered, the telecom industry isn't exactly thriving -- and the picture doesn't look much brighter for the last half of the year.

"We expect that to be a tough market for the balance of the year," Carpenter said. "We have not seen the pick-up we anticipate in the second half."

The dive started last year, and resulted in about 140 layoffs over a two-month period at the Elmore plant, which specializes in beryllium-based product.

Since then, the market has started to regroup, and sales have steadily increased. Brush Wellman posted a gain of 12 percent in sales from this year's first quarter to the second quarter.

"I am encouraged with the sales growth we experienced during the second quarter," said Gordon Harnett, president and CEO of Brush Engineering Materials in a statement released Thursday. "Our cost and manufacturing initiatives implemented last year are beginning to improve our bottom line, even at these lower sales volumes."