Telect chairman sees greener pastures in Texas

Is Telect Inc. moving?

The family-owned company, which once was one of Spokane County’s largest employers, will move most of its operations from Liberty Lake to Texas, company co-founder and Chairman Bill Williams said in published reports and in an interview Friday.

But his son, Wayne Williams, CEO of Telect, took issue with his father’s statements, saying that Telect has not discussed moving its headquarters.

“It isn’t accurate that we are moving the company to Texas,” he said.

Bill Williams said the decision to move was based on the need to cut costs – and to find a more supportive state in which to do business.

“Texas has a whole lot more friendly attitude and climate than Washington state,” he said in an interview.

Telect last year bought California-based Hendry Telephone Products, which has a production facility in Plano, Texas.

Bill Williams said in a letter to the editor published in the March-April issue of Washington Business magazine that “Telect and the newly purchased company (Hendry) are in the process of moving to Texas so our Mexico facilities can remain in business and competitive in a global economy.”

Williams said he’s not sure where in Texas the company will be headquartered.

Reached by phone later Friday, Wayne Williams denied that Telect has discussed moving the rest of its operations out of Liberty Lake. He pointed out that Telect has shifted nearly all its production work from Liberty Lake to its factory in Guadalajara, Mexico. The final segment of that shift occurred last year, he said.

“That was last year and that’s old news,” Wayne Williams said.

Telect now has about 180 workers in Liberty Lake, with most of them involved with procurement, sales, management, engineering and support, he said. The company has a global work force of about 800, Bill Williams said. In 2000, the heyday of the telecommunications industry, Telect had more than 1,200 local workers.

Bill Williams and his wife, Judi Williams, started the telecommunications-equipment manufacturing company in 1983 and saw it grow as the telecom industry went through deregulation in the 1990s. The company roared forward through 2000, seeing orders for its equipment grow to more than $300 million annually. It considered selling stock in an initial public offering in 2000 to continue the momentum. Then the telecommunications industry crashed, slamming the brakes on Telect’s growth.

Wayne Williams became company CEO in 1994 and president in 1997.

After hearing about the letter written to Washington Business magazine, Wayne Williams said his father’s words were an exaggeration for effect, not a statement of a planned move.

“We are not even having a dialogue about this topic,” Wayne Williams said. But earlier Friday, when asked if Telect’s headquarters would leave Liberty Lake, Bill Williams said, “Once our building here is sold, it won’t be here.”

Telect has three buildings in Liberty Lake totaling about 340,000 square feet. Telect uses one-third of the largest building, another is vacant and the third has a tenant, although that company, Itronix Corp., is moving to Spokane Valley later this year.

“They’re for sale or lease,” Bill Williams said, adding, “but they’re not the hottest item right now in Spokane, or in Washington for that matter.”

Bill Williams said Telect hasn’t discussed moving the company with its employees.

Once the company’s headquarters is moved to Texas, Bill Williams said, the work now being done at Liberty Lake will move to one of Telect’s other facilities. The options, he said, include the company’s sites in Plano, Texas; Mexico; or Poland. He added that it’s possible a research and development office of perhaps 50 workers could remain in Liberty Lake.

For many years, Bill Williams has railed against the tax and regulatory burdens that he says have plagued Washington companies. In the letter he sent to Washington Business magazine, he said moving Telect stems from no longer being able to battle “a monumental list of anti-business-friendly laws and regulations that have broken the backs of small- and middle-size manufacturing and industrial businesses.”

Juli Wilkerson, director of Washington’s Department of Community, Trade and Economic Development, disagreed with Williams’ assessment of the state’s business climate.

“Washington’s business climate is the strongest it’s been in a long time, thanks to recent improvements in workers’ compensation, regulatory reform and tax incentives,” she said via e-mail. While admitting the state still has work to do in helping business owners, she noted that Washington was rated the fourth-most entrepreneur-friendly state in a recent survey by the Small Business and Entrepreneurship Council.

Moving out of Liberty Lake will be difficult, Bill Williams said.

“It’s disappointing. What we’ve always wanted to do is benefit the community, the state and our employees,” he said. “This is our home.”