Teradyne to leave Hub for suburbs
Firm will also sell connector unit as it consolidates
Correction: Because of a reporting error, a story in Wednesday's Business section on Teradyne Inc.'s plan to move from Boston said incorrectly that the news was first reported by the Boston Herald. It was published first in the Oct. 10 issue of the Boston Business Journal.
Forty-five years after it opened for business in Boston, the world's leading microchip-testing firm is getting out of town.
Teradyne Inc. will abandon its headquarters in the city and consolidate around its factory in North Reading. The shift, set for completion by the end of 2007, will move about 900 high-tech jobs out of Boston.
Teradyne will also stop making complex electronic-connector systems by selling its New Hampshire-based Connection Systems business for $390 million to rival Amphenol Corp. of Wallingford, Conn. The sale will allow the company to concentrate on its main business -- making complicated and costly gear for testing silicon chips and telecommunications networks.
The move to the suburbs, first reported in this week's Boston Business Journal, is not a reflection on the city, said Teradyne spokesman Tom Newman, but a concession to workers weary of commuting between Boston and North Reading. ''We have operations currently in Eastern Massachusetts spread across several locations and the employees voted pretty firmly that they could all do a better job if they were sitting under one roof," Newman said.
Founded by Massachusetts Institute of Technology graduates Alex d'Arbeloff and Nick DeWolf in 1960, Teradyne established itself as the leading maker of chip-testing equipment. The company's machines, which can cost millions of dollars each, automatically test the billions of microcircuits on a silicon wafer, ensuring that chips made from the wafers will work properly.
Over the years, Teradyne diversified, moving into telecommunications-testing gear and the manufacture of sophisticated electronic and optical connectors.
But the company was hit hard by the computer-industry slump earlier this decade. It has cut hundreds of jobs and shut down a number of facilities. In July, Teradyne reported a loss of $45.5 million for the second quarter, compared to a profit of $80.5 million for the same period in 2004. Also in July, Teradyne said it would lay off 400 workers, including up to 160 at its Boston and North Reading sites.
Two years ago, the company ended its manufacturing operations in Boston, moving them to North Reading. But many of the engineers who designed products have still been based in Boston.
Newman said the company told Boston Mayor Thomas M. Menino of its decision last week, and that the city made no effort to persuade it to stay. Newman said Teradyne could have remained in town only if it was able to combine management and manufacturing functions in a larger facility. There is no room near the company's Boston offices for such an expansion, he said.
The North Reading campus included seven buildings, but as part of cuts announced earlier, one has been sold and another is for sale. The remaining five buildings can absorb the Boston workers located at 321 Harrison Ave. and 179 Lincoln St. while leaving room for manufacturing, the company said. The company will continue to operate a separate sales facility in Waltham.
To ease the transition, Teradyne will operate shuttle buses from Boston to North Reading. Newman said the company hopes to retain affected workers by making the change as painless as possible. ''We do not want to lose any people as a result of this," he said.
Mark Maloney, director of the Boston Redevelopment Authority, said he wasn't surprised by Teradyne's decision. ''They've had not the best year. They're looking to consolidate," he said.
The city's relationship with the company has always been amicable, Maloney added. ''We think that as they consolidate and get stronger, they'll be looking to come back," he said.
Meanwhile, Teradyne will sell its electronics-connector business, even though it generated 23 percent of the company's revenue last year. Newman said management wants to focus resources on the company's original electronics-testing business. ''We've come to the conclusion over the last year or so that we'd be a lot better off if we just focused on our knitting," he said.
Teradyne expects to close the sale of the connector business to Amphenol before the end of the year.
Hiawatha Bray can be reached at bray@globe.com. 
