Pelco management announced to its employees today that in consideration of the current economic situation, the company will stop all production of access control products and shutter its facility in Indianapolis.
The aggressive action is intended to allow Pelco to better concentrate its resources on supporting its core video security business.
“As the general economic outlook continues to worsen and as forecasts call for a prolonged challenge throughout 2009, we as a company are forced to continually adapt to market demands,” Pelco President and CEO Dean Meyer said in a press statement. “In response, we have initiated the necessary planning to exit the electronic access control (EAC) business with our Intelli-M product line. This decision requires that we explore the options to sell or spin-off the Intelli-M EAC business, as well as to close the EAC business in its entirety.”
Pelco noted these options are being explored, and that regardless, the company will be closing the Pelco Indianapolis facility, which primarily houses the resources for its access control development along with elements of general product support and training.
Pelco for several years had attempted to develop and market its own access control technology prior to being acquired by Schneider Electric in 2007. After the acquisition, Schneider moved quickly to consolidate its Indianapolis-based access control company Integral Technologies into Pelco.
“They are smart to focus on what they do best and that is video,” Sandra Jones, founder of the consulting firm Sandra Jones and Co., tells SECUIRTY SALES & INTEGRATION. “They have a lot of partners in the access control business, so if they can manage to do a great job in building their video business they will make a better partner to other access control companies.”
The consolidation of Integral Technologies was intended to drive Pelco toward integration, however, the company had trouble gaining traction in the marketplace.
“Access control is very difficult, a much more complex business. It takes not only years to develop but then years to test it and prove it in the field,” Jones says.
While it is not currently known how many employees will be affected by closing the Indianapolis facility, Pelco said it has informed workers impacted by its decision. Those placed on layoff status will be offered severance, outplacement and counseling services. The company will also provide additional information to its customers on future plans for product support, warranty, repairs, etc., within the next 30 days.
“What is meaningful here is they have elected to focus on the business that they are in and they know and find profitable,” says Jones. “This is a good business decision. The time is now to really focus on the business that you have and make sure what you have is profitable and if it’s not, get rid of it.”