Spokane’s Output Technology Corp. breaks the NAFTA stereotype.
The North American Free Trade Act (NAFTA) is vilified by its opponents as a mechanism by which U.S. companies send their manufacturing operations - and the jobs that go with them - to Mexico, where labor is cheaper.
OTC, however, has reversed the process.
“I would say this is almost unheard of,” says Warren Rainer, OTC vice president of sales and marketing. “It’s the Key Tronic experience in reverse.”
Since June, OTC has been manufacturing printers for ATI de Mexico, S.A. de C.V., located in Mexico City.
The arrangement would not have been possible without the NAFTA agreement, Rainer says.
“This (deal) represents the spirit and intent of free trade as envisioned under NAFTA,” Rainer says. “This is a case where goods manufactured in the U.S. have found a new market thanks to more liberal trading status between the United States and Mexico.”
The Spokane-based manufacturer of high-speed computer printers supplies ATI with its 850 model printer, “which,” Rainer says, “is our bread-and-butter product.”
The unusual arrangement exists, he says, because the 850 is a relatively unique product offered to a niche market. Being a small manufacturer, OTC’s survival is based on its ability to find these niches that aren’t of much interest to their larger competitors.
The 850 is a business printer aimed at the financial and accounting industries. It prints checks, invoices, billing statements and other high volume, text-based batch runs.
If a mass market existed for the printer, undoubtedly a Third World manufacturer would have offered a cheaper version years ago, Rainer said.
Although the ATI contract represents only a small volume of business in OTC’s overall sales, Rainer says the deal holds a broader potential “because we haven’t done a lot of business in Mexico.”
OTC, which emerged from bankruptcy just a few years ago, has been gradually strengthening its base since then, Rainer says. The company, which employs about 140 and does annual sales in the $20 million range, is ready to leap ahead, he adds.
“We are very close to releasing a new product line that has been under development for some time,” he says.
The product line, which may be ready by year end, involves a higher-end printer “that is more suited for today’s graphics than our earlier products.
“We anticipate that the new product line will give us the ability to grow the company and increase overall revenue and sales on a long-term basis,” Rainer says.