Jon Koseff, company CFO, tells GlobeSt.com that the move is due to "operational consolidation." He says that the facility in Salem is leased and the company, which designs and manufactures flexible interconnect products, is looking to sublet the space but so far there has not been a lot of interest. He declined to reveal when the company's lease on the space is up, only noting that it's a "fairly short window."

The company owns its 200,000-sf facility here. Peter J. Murphy, president and CEO of Parlex, says that the company's "primary objective continues to center on profitability through consolidation, cost control and revenue growth." As part of that consolidation, much of Parlex's high volume flexible circuit business, which was based in this building, has been moved to China, resulting in excess capacity in the local facility.

Murphy emphasizes that shipments from China increased from $3.3 million to $5.2 million in the last quarter and are expected to continue to increase over the next several quarters. "While we have had to absorb, in fiscal 2002, significant transfer and learning curve costs, China is a key element of our profitability objective as it combines our unique technologies with a highly efficient labor force," he points out, adding that Parlex is "ramping a number of significant programs there."

The transfer of the cable operation out of Salem is expected to result in a one time charge of $1.5 million, and after that the company anticipates that the move is expected to reduce costs by $1.2 million annually. Certain portions of the laminated cable business will also be transferred to Mexico resulting in additional savings.

Kosheff notes that the laminate manufacturing facility was originally based in the Methuen facility before it was transferred to Salem. He also points out that the two facilities are with 10 miles of each other. All employees will be shifted to the Methuen facility.