Key Tronic, Gateway Cut Deal Agreement Could Generate $10 Million In New Business

Key Tronic Corp. Wednesday announced an agreement with Gateway 2000 Inc. that could produce $10 million in new business for the Spokane maker of computer keyboards.

Executive Vice President Ron Klawitter said Key Tronic could produce up to half of the two million keyboards shipped with Gateway computers each year.

The units are priced at just under $10, he said.

Klawitter said Key Tronic outbid a longtime Gateway vendor for the contract. Besides price, he said, the South Dakota company was attracted by Key Tronic’s reputation for quality and its North American manufacturing base, which will shorten delivery times.

The keyboards will be assembled at Key Tronic’s Mexico plant, but some components will be made in Spokane, he said.

Although no major change in employment is expected, Klawitter said the contract is a breakthrough for the company, which has pursued a Gateway contract for years.

“It is very difficult to break into a new account,” he said. “It’s a good chunk of business.”

Gateway, with its offbeat ads playing up its rural location, is one of the biggest makers of personal computers in the country. Almost all are sold by mail-order.

The company did $5 billion in business last year, netting $250 million. Gateway employs 9,700 in the U.S., Ireland and Malaysia.

Vice President Bart Brown said the Key Tronic keyboards will have features that go beyond the traditional keypad.

“The PC is fast becoming an appliance for communication and entertainment, requiring a clean and simple switch from one application to another,” he said.

Key Tronic sold $184.9 million in keyboards and other input devices in its 1997 fiscal year. Major customers include IBM Corp., Toshiba and Hewlett-Packard Co. The company employs 2,860 in Spokane, Mexico and Ireland.

, DataTimes