Nortek Security CEO Out, Company Pivoting

By Dan Gelinas, John Honovich, and Brian Rhodes, Published May 28, 2019, 11:49am EDT

Nortek Security's CEO, Michael O'Neal is out, after 8 years leading the company, in what Nortek described to IPVM as them having 'pivoted strongly from [their] factory roots'.

However, as their owner admitted, Nortek Security's "business endured a difficult year in 2018'.

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****** **** ****, ** examine:

  • ******'* *********** *** *'****'* departure
  • ****** *********'* ************ ** difficulties
  • *** *** ******* ** moving ********** *** ** China
  • ******* ********** ********
  • *** **** ******** ******* illustrate ********

Company *********

****** **** **** **** removing *'**** *** **** of ** ****** ** "pivot" **** ******* ***** to * **** *************** innovative *******:

** ** **** ******* strongly **** *** ******* roots ** *** ********** innovator ** *** ********, the ********* **** **** a ****** ** ********** was ******. *** ** us ** ****** ******** & ******* ***** **** for *** ********** **** the **** *+ *****. Mike ********* *** **** through ************, ******* *** many ****** **********. *** presence *** ****** ******* style **** ** ****** and ** **** *** the **** ****.

Difficult ****

** **** * ** their**** ****** ************ ******* ******* **********, which ****** ****** ** 2016, ***** "*************** **********" as *** ** *** problems **** ****** ** improve:

*** ********** **** ********** from ***************, * **** in *****, *** ******* in ******** ******** **********. We *** ********** ****** brands *** ******** ****** each ** *** ****** businesses, *** **** ********** operations ***underperforming **********, and we saw opportunities for significant improvement. [Emphasis added]

****** **** ****** **** a '********* ****' ****** headwinds:

*** ******** ******* * difficult **** ** ****. Whilst ****** ************ ***************, it ********* *** **** to *** *** ************ in **********, ************* ************* and ****-****** ********* ** well ** ************* ********* its ******** *** *********** capabilities.

************, *** ****** ****** notes ** **** **, that *** ****** "*** declined" *** *** ******* faces ********* ***********:

***’* **** ** *********** security ****** *** ******** in **** *** *** become **** ***********.

*************

*** ****** ****** **** notes ********** ******** ****************** ********* *** *******'* product *****, ** **** in *** ********* ***** from **** **:

**** *** ******* ******** through *** *********** ** IntelliVision, * ********** ****** in ********** ************, ***** cameras, *** ****-********-***** ***** analytics ******** ***** ***** the ******** *** **** Smart ************ ****** *** product *****.

*******, ************* *** ************ been * ****** **** analytics ******** *** ** have **** ********** ***** the ***** *** **** they **** ******* ******.

Move **** **** *****

******* **** ********* *** ongoing **** ** ********** away **** ***** ** escape *******, ** **** on **** **:

*** ******** **moving ********** **** **** ***** in response to the onset of higher tariffs, which will also reduce inventory requirements and increase supply chain flexibility. [emphasis added]

Product ********** ********

****** ** ******'* ******** are ********, ****, *** poor ******* ********** ** its *** ********* ** companies.

**** **** *** ******* of ******* ********** '*-******' ******* ****,********** * ******** ****** security **** ********* **** four ***** ********* *********** ********* ******** sensors, ******/**** ******** ******* have **** ****, **** even ******* ******** ******* taking ***** ****** *******.

** ******** ** ******* ********* ********, ** *** '*****-**********' GC3 *****, *** ******** internal ********* ****** *** still ********/ ******, *** improvements **** ****** ************ and * ********* ****** only ****** ********* ***** after *******.

**** **** *** ***** launches *** *******, *********** has ***** ********. *** example, ******** *** **** / Motion ******** ******, ****** ************ ** a **** *** *** many ***** ** ****** firearms **** ****** **** dangerous *** ********** ** negligent **********.

*** *****'* ********** ********************** ** **** **** was * ****** *******. The **** *** ******* been************, ******* ******** *** brand's *** *** ******** in *** *********** ****** market.

Poor ******** *******

******* ** ********* ***** an *********** ********* ********** ** ****** with *** ******** ** 117 ******* ********* **** 1 **** *** ******* trend ***** *** ** decline ***** ****, ** seen *****:

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********** ******* ******* *** issues **** ******* ****-** **** ************, ** **** *****:

* **** **** ******* at ****** ******** & Control ****-**** *** **** than * *****. *** old **** *** *****, management *** ****** **** good. *** **** * years **** * ******** spiral ** ******* **** H1B ************.

**** **** **** *** executives ** ****** *** "no ****" *** **** anyone *** ***** ***** employees *** ******* ****, as **** ** *** review *****:

********** ** ****** **** no **** **** ** really *********, ******* ***'* (3 ** **** *** 1 ******* ** ****), all *** ****** ********** that ***** ***** ***** the ****** ******* ** NSC *** ****.

****** ********** **** ** prepping ****** *** ******** sale, *** ******* *** laying *** *********** ********* to **** *** "****** line **** ****":

***** ******** ** *** sale, ** ****** *** bottom **** **** **** by ****** *** *********** employees.

***** ****** ******* *** the **** ** ********* success ** ******** *** to **** ******* ********** and *************, ******* ** a ******* ** ******** morale:

** ****** ***-******* ******** have **** *********** ********** when ******** ********** *** to *** ********* ** understand *** *******, ************** project ********** ********* **** an ******** ** *************** and ********** ********* ** schedules ** ***** *******, and ** ******* **********. Employee ****** ********* ** decline ** ************* ****** of **********.

Employee ***** ****

****** ********'* ******** ***** dropped *% ** *** last * ******,********* ** ********, ** **** ** the ***** *****:

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*******

****** ***** * ****** of ******** **** ******* management, **********, *** ******** of ********** *** **********.

* *** *****, *** GCNext, ** ********* *** later **** *******. ** it ********, ** *** help *** ******* ******* against ******' **** ********* offerings *** ******'* ********** challenges ******** **********.

******* ******* *** ******** to **** ********** ******* and ******* ****** ** Nortek ******* ** ** seen.

Comments (4)

Our Company is one of only a few Independent Security Distributors left in the U.S. who helped build the brands of some high quality and very popular US Companies during the early 1990s to around the 2010 time frame. A few of the brands many will remember is Channel Plus, Open House, Caddx, ITI, M&S Systems, and so many other top sellers during this period. These small companies were constantly pumping out new and improved products at record paces.These were also some of the brands that let Independent Distributors battle it out on a level playing field with the ADI/Ademco and Anixter type Big Box Distributors. In turn customers were given a choice about where to spend their money. 

Manufacturers like Linear/Nortek,  GE & others rapidly acquired, dismantled and moved production overseas for these small American Companies. These successful U.S. companies along with thousands of American Jobs were doomed before the ink was dry on the contracts. Some of their names are still around but most are sadly destined for the junk heap.

independent Distributors always have the advantage of building personal relationships with their customers whereas the top leaders of ADI, Anixter and the like have no clue who their customers are and probably have never met one. The lack of cash flow, and reasonable profit is their greatest disadvantage. 

Too bad some of the Corporate Executives do not take a few lessons from their customers about how to take care business.

37+ Years & Kicking

Agree: 3
Disagree
Informative: 4
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Funny

I find most manufacturers a challenge to deal with today.  Lots of great people who truly care and want to do good work, mired in corporate red tape, earning reports, late night calls to a foreign land and shareholder mandates.  No one wants to wait for the payoff anymore.  This industry used to be fun with occasional issues, now we spend a great deal of time chasing problems, figuring out how product really works and has legs and trying to still be profitable.  Let alone finding techs that can digest a 200 page operating manual, pull cable and be a network expert at the same time.  Massively over complicated this industry has become.   I see a major issue being that the cost of entry to any significant business now is so massive that most won't undertake the endeavor or the risk.  Great for those already in the space, bad for innovation and the entrepreneurial spirit.  There appear to be fewer and fewer players out there that can move fast, respond to the customers and build a top quality product.  Most larger groups have become marketing, engineering and software firms with production relegated to a foreign job shop, some with questionable quality and ethics.  You can't live in the past, but I truly miss the days of ESL, ITI, Caddx, Linear, Infographics, Lenel, Kalatel, Sentrol and the other privately owned businesses that did great work in their day.  It was a please and you could get an engineer on the phone to figure issues out immediately.  Now we don't know who will get fired, leave or bought out tomorrow.  How can any business plan with that much uncertainty?

Agree
Disagree
Informative
Unhelpful
Funny

At least the BIG BOX distributors have web sites that actually work, put on excellent trade shows and have good tech support / quoting. I can't say that there is much of a difference in my market between the regional and national distributors regarding relationships. 

Maybe its time to stop bashing the competitors and provide more value?

Agree: 2
Disagree
Informative: 2
Unhelpful
Funny

We've gotten a lot of mileage out of the Linear brand radio products and would be disappointed to see them fail.  It may be unfair to Nortek but it seems like a case of someone seeing a quick looking dog being walked behind a bicycle and assuming that the same dog would do just great behind a sports car.  Pretty soon someone is left holding an empty leash. 

Agree: 2
Disagree
Informative
Unhelpful
Funny
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