(Press Democrat, The (Santa Rosa, CA) Via Acquire Media NewsEdge) July 27--With 1,200 new employee badges and an expansive row of new executive offices, the Santa Rosa facility of Agilent Technologies stands poised to serve as headquarters to the world's top electronic measurement company.
On Friday, the hilltop campus on Fountaingrove Parkway is slated to unveil signs proclaiming itself the home of Keysight Technologies.
The creation of a new company means splitting up Agilent's life sciences and electronic measurement divisions, with the hope each business can grow better on its own. Keysight's new leaders and staff have spent 10 months helping prepare more than 10,000 customers, 3,000 suppliers and 9,500 employees for the new day.
For the next three months, Keysight will operate as a wholly owned subsidiary of Agilent. But in November, Keysight is scheduled to become an independent, publicly traded company, a global business based in Santa Rosa.
It all amounts to the latest chapter in the story of Sonoma County's fifth-largest employer, which began here four decades ago as part of technology giant Hewlett-Packard. Under both HP and Agilent, the electronic measurement facilities brought the county the benefits of a high-tech workforce. But they also offered front-row seats to the upheaval caused when a company sends thousands of manufacturing jobs overseas.
For this next act, Keysight will take center stage as the largest company ever based in the county, one whose annual sales of $2.9 billion nearly equals a quarter of the world's electronic measurement market.
"We have a global player headquartered now in the county," said Dick Herman, president of 101 MFG, a Petaluma-based alliance of manufacturing executives. "And that's pretty significant. Because decisions aren't made anywhere else now. They're made here."
Since last fall, a core team of roughly 1,000 Agilent employees have worked to make sure that by Friday both the new and existing companies will be ready to operate on their own. For Keysight, the 316 days of preparation has been a time for such diverse tasks as creating 15,000 new email addresses and gaining permission to do business in 30 countries.
At the million-square-foot campus in Santa Rosa, construction workers have converted 15,000 square feet of space for executive offices and a "stakeholder center" that will welcome the company's new board members, as well as high-profile customers, stock analysts and investors.
"We wanted a headquarters that had a look and feel of the world's leading electronics measurement company," said Hamish Gray, Keysight's chief of staff and the manager leading the changeover.
Keysight looking ahead
Keysight will bring to Santa Rosa about 70 new workers as part of its headquarters operations, in addition to the roughly 1,175 already here. Seven of the nine members of the executive management team will be housed locally, including President and CEO Ron Nersesian.
Company workers in Santa Rosa speak of the intense effort it has taken to split up a company and create new legal, finance, human resources and information technology divisions. But Keysight officials already are looking ahead.
"This is an exciting new day, but just the first of many on our journey of excitement and passionate efforts to deliver something extraordinary to all involved," Nersesian said in a statement.
Keysight already proclaims itself the global sales leader of electronic measurement equipment in three key sectors: aerospace and defense, communications, and computers and semiconductors. As well, the company proudly traces its heritage back 75 years to innovators Bill Hewlettt and Dave Packard. The Santa Rosa campus even displays one of the 1938 HP audio oscillators that Walt Disney Studios used to test theater sounds systems for the 1940 movie "Fantasia."
However, the electronic measurement division also has been pushed aside twice in the search for greater profits.
The first breakup came in 1999 when Hewlett-Packard split off the Santa Rosa campus and the company's other electronic measurement plants to form Agilent. That allowed HP to focus on its then-sizable computer and printer business.
This time, the split will allow Agilent to give attention to its life sciences division that now accounts for the majority of the company's revenues. Both Agilent officials and stock analysts have maintained that the company's current makeup forces shareholders to invest in both the life sciences and electronic measurement businesses. They contend that has resulted in a devaluation of the company's share value.
Hard lessons learned
As officials prepare to launch Keysight, they say they have learned the hard lessons that followed Agilent's expansion and contraction in the years after leaving HP.
By 2000, the year in which the dot-com bust first clobbered the technology sector, Agilent had 47,000 employees worldwide. Five years later, it had declined to 21,000, roughly the same size as today.
The downsizing hit hard in Sonoma County, where Agilent at one time employed more than 5,000 workers. The company had operated a second campus in Rohnert Park for two decades. But that property closed in 2004 and its manufacturing work was transferred to Malaysia. Nersesian said last fall that Keysight will continue to manufacture its products at factories in Asia, but will employ engineers around the world, including Santa Rosa.
The electronic measurement business remains tied to the booms and busts of the tech sector.
But Agilent leaders say that in recent years their efforts have better controlled expenses and kept the electronic measure division profitable even in downturns. They have done so partly by handing over a portion of sales and manufacturing work to outside contractors -- making payments to such businesses only when products are made and sold.
Local workers generally speak optimistically of the new company's prospects and say it helps that they know and respect the executive team. All nine members of that team have experience working in the electronic measurement sector, Gray said.
As well, workers said, Nersesian and his team have spent considerable time making their case to employees. Keysight's new officials have cast a vision of a company that can chart its own destiny, that won't be sending its profits off to separate business units and that can give new focus on innovation and performance in a highly competitive industry.
Looking at future growth
Now investors and analysts will be watching how well Keysight can grow.
Ross Muken, senior managing director and partner of New York-based ISI, said the general economy and the plans of testing equipment customers "seem to be pointing to a better environment for growth." But a key question for Keysight is whether it will recapture lost market share and "prove that you are back."
That would include winning back business with a major player -- iPhone maker Apple, according to Muken. Agilent officials last year said they had halted business with an unnamed company because a proposed contract could have forced them to choose between paying significant performance penalties or failing to keep commitments to other customers.
Gray declined to speak about growth efforts. But he suggested that Keysight's workers this year once more demonstrated their ability to perform well by their timely creation of a new company.
"Many people wouldn't believe we could do what we did," he said.
Benefits for the county
Local business leaders are predicting that the presence of a global company's headquarters will mean new benefits to Sonoma County.
Jonathan Coe, president and CEO of the Santa Rosa Chamber of Commerce, said the Santa Rosa headquarters will send a positive message about the county's business climate. It will draw visits by executives of other companies who could come away thinking, "Keysight can be successful there. So can we."
The county also can anticipate more community involvement from the company due to the new workers brought in to staff the headquarters, Coe said.
"They've been leaders in that already," he said of the existing Agilent staff, "and I think that will only be enhanced."
Both business leaders and company officials credit Hewlett and Packard and their "HP Way" for instilling in the workers here an ethos of giving back to the community.
"We will absolutely carry that on in Keysight Technologies," Gray said.
You can reach Staff Writer Robert Digitale at 521-5285 or firstname.lastname@example.org. On Twitter @rdigit
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