The announcement that Roscor Corporation, reseller and renter of audiovisual equipment, on Friday, Oct. 28 closed its rental and service departments and mass fired 100 of its 130 employees, sent shockwaves through the Midwest AV industry.
The 35-year old Mt. Prospect-based company, owned by brothers Paul and Mitch Roston, president and CEO/CFO respectively, said it would restructure as an engineering design firm. Its mission would be to designing integrated systems based on the best-value equipment, while providing tech support.
Mitch Roston called the Reel Monday –- he nor anyone else at Roscor could be reached Friday — and in a brief interview said there will be “some form of reconstruction,” but he did not clarify whether or not that meant financial or internal changes.
“I can’t get into it at this time,” he said, “because frankly, I don’t know.”
The Rostons have seen dramatic changes in equipment sales and rentals ias profit margins were squeezed, due to intense competition and the proliferation of cheaper capture and post equipment. “As these margins shrunk, it’s been very difficult if not impossible to generate enough profit to pay for the infrastructure that was built.”
The Rostons see Roscor taking on a new business model and going forward “more as a service company that will consult and install”. The key engineering and installation staffs and the key project managers remain on staff,” Roston said.
Other situations have not been decided yet, such as the issue of health insurance, he said. “I don’t have the answer yet, but we should know by the end of this week and everyone will be contacted and given that information.”
Sounding exhausted and frazzled, Roston said that last week had really been an ordeal in having to lay off several employees who had been with the company for more than 30 years, many more over 20 years and a large majority with 10 years tenure.
Commenting on the story backlash in the Backtalk section, Roston said, “People who are complaining were fired years ago,” noting the writer who said he had to clean toilets “was hired to clean toilets. The people making these comments are not our current employees.”
Roston promised that he would inform the Reel when the financial status and the new direction of the restructured company have been clarified.
Speculation that Roscor assets are now owned by a bank
Given Roston’s admission that they don’t know the status at this time gives some credence to unconfirmed speculation that an area bank owns all of Roscor’s assets and its owners are in an “undefined position of day-to-day leadership.”
One source, a former Roscor employee of long standing, said a loan reportedly had been on the table that would have helped finance Roscor for an additional 60 days.
“It looked as if the deal were going to be accepted; however this deal was either voided or reneged on a Sunday night, perhaps Oct. 23, but past whatever deadline the Rostons were up against,” the source said.
One former employee speculated that the main duty of the remaining workers will be to collect money owed on outstanding invoices, complete projects and liquidate all remaining assets in order to decrease Roscor’s bank debt.
“Once this has been accomplished, the bank will close whatever version of Roscor there is” and the remaining employees will be eliminated, he posited.
Satellite offices in LaCrosse and Cleveland have been dissolved and Roscor’s regional sales offices in Milwaukee, Farmington Hills, Cincinnati and Jakarta, India probably have closed.
Cheaper equipment and sharp competition factors
Noted technology expert Gary Adcock, speaking in general about the current state of the equipment reseller/rental industry: “The increasingly lowered cost of broadcast and capture equipment has been impacting the traditional rental market for the past several years.”
Roston admitted that Roscor couldn’t complete on hardware prices with large national equipment sellers, “and that’s what affected our sales staff.”
“Through technology, equipment is much cheaper and companies that used to rent gear for, say, conventions or internal training purposes, can now afford to buy and own their own equipment,” Adcock said.
Positions offered to former Roscor staffers
Comments about Roscor by former employees and clients have been pouring into the Reel (see all stories on the subject) since news of the Roscor firings was posted Friday afternoon.
Those comments also include job openings from companies looking for qualified candidates: SmartSource in Glendale Heights has two permanent positions in a new national “rerent” purchasing department. Contact email@example.com.
AlphaVideo of Minneapolis has several positions open and moving is not mandatory for all positions. Contact firstname.lastname@example.org, see www.alphavideo.com.
Z Systems, a pro video dealer in the Twin Cities, is also looking for account managers. www.zsyst.com.
Full Compass Systems is always looking for smart, motivated and qualified employees. Please contact our HR Department: www.fullcompaass.com.
Contact ProVideo Systems with details. Linda@provideosystems.com.