by Timothy McQuiston, Vermont Business Magazine Ed Sawyer, President and CEO, of SBE, Inc in Barre has confirmed to VBM that SBE is winding down operations and has dispersed the SBE assets. He also confirmed that he is ramping up a new company that is using his patents for electronic components vital to the electric vehicle industry. The new company is called Advanced Power Conversion Solutions, Inc. It will occupy the same relatively new plant at the Wilson Industrial Park in Barre, though on a smaller footprint. Sawyer said he was able to retain most of the SBE employees. The story was first reported by the Burlington Free Press.
“There has been some interpretation that we are laying off some people. We are not,” Sawyer told VBM in an email exchange. ”The people that were laid off occurred over the past few months. Everyone that was here last month is still working and we plan to keep them all and expand in 2020.”
“The company, SBE, is only operating in a financial wind-down and information capacity. Advanced Power Conversion Solutions is now functioning as the builder of parts shipping out using equipment, inventory, and space negotiated directly with the secured parties of SBE. So operation is now. We have 15 people employed right now in Vermont.”Â
“SBE is supplying initial designs for Rivian truck (Ford and Amazon) and Rimac (Porsche and other high performance cars) as well as new eMotorbike designs. And we have been supplying the Truck and Bus market for year. The problem is that the volumes are a fraction of what was anticipate by the DoE when they funded the plant. And you had to build it to their specifications to win the grant.”
SBE received a $9.1 million federal matching grant in 2010 with the expectation that electronic vehicles and hybrids would take off. While EVs have gained ground in the US automobile market, sales have not yet reached expectations.
But SBE also suffered a financial blow when Tesla discontinued using SBE as a supplier of proprietary capacitor technology and signed a deal with Panasonic, which left SBE and its creditors in a hole.
“VEDA confirmed that SBE does not owe them anything in the [BF] article. This is correct,” Sawyer said. ”SBE owes no State or Federal agency any money. The town of Barre was granted $1 million from HUD to be part of the funding in 2010. They then loaned the money to SBE. SBE made roughly $500,000 in principle and interest payments against the loan but there is an outstanding balance. Those payments are not paid back to HUD because it was grant to the Town of Barre. I have no idea where those payments actually go within the town budget. What I do know is they donât go back to the Fed. Also the building that was created from a greenfield back in 2010 has paid well over $500,000 in Real Estate taxes so far. And of course that has been additional income to the town of Barre. So Barre has received about $1 million in funds from this deal and SBE over the past decade and owes nothing back to the Fed. Because the loan is still outstanding, the lawyers will say that SBE defaulted and owes the town. Technically correct. But since the town only received the money to lend because HUD wanted to contribute and this was their only way to do it, that is a gross misrepresentation of the reality.”
As for the local suppliers, Sawyer said, “I am not able to comment on Vermont suppliers and what is owed.”
Sawyer, President and CEO, and Mark Browning, Vice President, purchased SB Electronics, Inc in 2002 and formed SBE, Inc. The company then raised over $16 million from accredited and qualified private investors, $9.1 million from the ARRA grant program administered by the US Department of Energy during the Obama Administration and over $7 million from a variety of federal, state and local sources.
According to its Website, SBE Inc is a leading developer and manufacturer of film capacitor solutions that “provide a much higher degree of reliability, higher power density, and simpler cooling infrastructure, in demanding applications, particularly for automotive/transportation, alternative energy, military/aerospace, medical equipment and power supplies/laser.”
Originally a Sprague Electric Plant, which was based in Massachusetts with plants across the Northeast, SBE has been manufacturing capacitors for over 50 years producing over a billion capacitors, including the renowned Orange Drop. The Free Press story said at its peak, the Barre plant employed nearly 1,000 workers.
With the development of its DC Link Filter Power Ring Film Capacitor, SBE Inc was awarded that $9.1 million grant by the US Department of Energy (as part of a $18 million dollars overall project) to build a world-class facility for the manufacturing of this line of capacitors used in Drivetrain Inverters for Electric Drive Vehicles, Wind and Solar System Inverters, Power Conditioning/UPS Systems and Datacenter Network Infrastructures.
The plant capacity was configured and capable of manufacturing 40,000 Power Ring units a year and had the ability to rapidly increase production to well over 100,000 Power Ring units with additional personnel, tooling and fixturing.
Post time: Jul-06-2020