A smaller Sparton seeks second life in Schaumburg

Sparton Corp., a 109-year-old Michigan maker of circuitry for defense jets and other products, aims to avert bankruptcy by streamlining operations and relocating to a much-smaller headquarters in Schaumburg.

Cary Wood, the chief executive officer since last November, aims to keep the longtime company viable and reach profitability later this year.

"We're looking to have a fully functional headquarters here by October or November," Wood said during an interview this week. "And by the (fiscal) second quarter, which is October through December, we could start turning a profit."

Turning a profit is something the company hasn't done for at least the last three years. Spartan posted a third-quarter net loss of $763,000, or a loss of 8 cents per share, on sales of $54.6 million. This compares to a net income of $634,000, or 6 cents a share, on sales of $58 million from a year earlier.

So far, the company has cut its work force from about 1,200 to 900.

Also, Spartan has five manufacturing facilities: Jackson, Mich., scheduled to close by late July; Strongsville, Ohio; Brooksville, Fla.; DeLeon Springs, Fla.; and Ho Chi Minh City, Vietnam. Production from the Jackson, Mich., facility is being transferred to Florida and Vietnam.

Also, the headquarters in Jackson, Mich., had about 200 workers, but only 15 will be in the new office suite on the 20th floor of the Woodfield Corporate Center, 425 N. Martingale Road, Schaumburg. Of the 15 workers here, about half will be local hires. The Schaumburg headquarters will include the top executives, human resources, information technology, accounting and finance, Wood said.

"We plan to continue to grow with our defense and medical businesses, and want to stabilize our electronics business," Wood said. "Moving to Schaumburg, puts us in proximity to a lot of our Chicago-area customers."

Spartan appears to be making strategic and sound decisions with its new management team, some analysts say. Wood is a big advocate of using the Lean Six Sigma Methodology to streamline processes, and he also plans to introduce new products, an imperative for the company's survival, said Mary Rose Hennessy, executive director of Naperville-based Business and Industry Services at the University of Illinois.

"They have landed some good government contracts, and if Spartan is able to improve its cash position, they could come out of it stronger than before and start growing again," said Hennessy. "Wood is giving the company a drastic fresh start because it's too late for incremental improvement."