VES lays off four, will shutter central station

Thursday, June 25, 2009

KING OF PRUSSIA, Pa.--VES has laid off four workers and is preparing to shutter its central station, which employs 12, VES director of sales Andy Johannsen told Security Systems News on June 22.

The layoffs occurred on June 15, as did the announcement to the staff that the central station would be closed over the next few months. The total number of employees before that reduction in force was 35.

The news is not all bad, however. Johannsen said the business is sound and will emerge stronger as the result of these cost reductions. He also noted that VES is introducing new products that will allow its dealers to break into different markets.

VES has undergone a lot of changes in the past 18 months. UK-based Kentec Electronics acquired the fire panel manufacturer, formerly Viking Electronic Services, from Viking Corporation, in May of 2008. A new senior management team was put in place shortly thereafter, and in November of 2008, VES announced plans to upgrade its central and offer third-party monitoring.

At that time, Johannsen told Security Systems News "we need to generate somewhere in the neighborhood of $50,000 of RMR for the business to break even, so we're going to be in the wholesale monitoring business."

Why the decision now to shut down the central? "It's really related to the current economy," said Johannsen. "We're going to try to be lean and mean and fight our way through [the economic down turn]. The truth is, it's not a great time for fire alarm manufacturers, whether they admit it or not."

As the company prepares to close the central it is ensuring that its current dealers are transitioned to other monitoring stations. VES expects to place its central station employees at other local central stations.

Asked about Kentec's commitment to VES, Johannsen said it is strong and "they're continuing to invest in the business."

Viking's specialty has always been larger networked systems, but in this economy "a lot of the big jobs are being put on hold." VES is launching a smaller panel that Johannsen said will "open up other sales channels and new business [for current dealers]."

The panel has gone through UL testing and should be UL-listed by July. The new panel "is a platform that will open up sales in the smaller job market ... it's ideal for a pizza shop, strip mall stores or small office that does not need one of bigger engineered systems," Johannsen said.

Aside from the central station closing, it will be business as usual at VES, he emphasized: "We're not a big player in the U.S. now, but we'd like to be, and we're going to build the business and build it more methodically now."