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Wednesday, Oct 4, 2023

Making Waves

It was an embarrassment to the government when it was revealed this year that listening devices had been installed in rooms used by suspected terrorists at Guantanamo Bay to meet with their attorneys. But it was a badge of honor of sorts for Louroe Electronics, the small Van Nuys company that made them. Though unaware of their classified application, executives know just how powerful those particular devices were: capable of clearly picking up voices 30 feet away. “For the one person who says, ‘Isn’t that wrong?’ there are five people saying, ‘No, not as long as you do it right,’” said Chief Executive Richard Brent, who assumed his post in 2010. The company’s line of audio surveillance equipment are also installed in far less exotic venues – hospitals, stores and police departments, to name a few. By last count, Louroe has sold some 700,000 microphones during its 33 years in business. But now, after several years of flat sales, Brent is determined to turn up the growth with new products and an expansion into Latin America. Working with a division of the U.S. Department of Commerce, the company is putting a priority on exporting its one-way and talk/listen microphones, speakers, base stations and other support equipment. Louroe microphones can resemble a light switch plate with a quarter-inch hole to capture sound or a smoke detector mounted on a wall or ceiling, which was the model used at Guantanamo Bay. Other models don’t disguise the intended use and can be set on tabletops or next to a patient’s bed in a hospital to communicate with the nursing station. The basic Louroe microphone sells for a suggested price of $150, with elaborate systems such as sound-activated alarms reaching $10,000. The most common products are priced between $400 and $600. In an increasingly insecure world, security system services are a $16 billion industry with a forecast of moderate growth over the next two years, according to First Research, an Austin, Texas market analysis firm. Louroe did not release sales figures, but it is small and overshadowed by the larger players that install and monitor security systems. Still, the company has a leading position in the audio surveillance niche. Louroe sells to distributors and companies that integrate the equipment into larger security systems that are then sold to the end user, which the company often doesn’t know. “Cards are played close to the vest in this business,” said Cameron Javdani, the market relations manager. Close to home, the equipment listens in on prisoners at L.A. County Sheriff’s Department courthouse holding cells, which is typical of their use – being installed in locations where there is little expectation of privacy. Richard McMillan is president of MCM Integrated Systems, the Van Nuys company that installed them. “There’s not a lot of competition so they are the dominant company in that market,” he said. Increasing professionalism With just 33 employees, Louroe operates out of a 16,000-square-foot building adjacent to the Van Nuys Airport combining administrative functions with research and development, assembly, quality control, and shipping and receiving. Brent came to Louroe through family connections. His uncle, Louis Weiss, founded the company in 1979. Brent was named trustee of the estate after Weiss passed away in July 2009. But it is Brent’s Fortune 500 background having worked for a subsidiary of Caterpillar Inc. that brings the most value to the company and has resulted in improvements to the operation. Brent has reconfigured space on the second floor for a call center to handle customer service, invested $40,000 in a modern soldering machine to replace two older machines, boosted employee training programs and increased the company’s contribution to a 401(k) plan. “We consider how to grow as a business so we can manage expectations to meet or beat them,” Brent said. The inventory system is set up so that the vast majority of products are shipped in five days. The change has not gone unnoticed by vendors. EW Electronics in Chatsworth has supplied electronic components to Louroe for at least 30 years. Following the death of company founder Louis Weiss in 2009, EW Chief Executive Rich Friedman began to notice the business was better operated. EW received clearer directions on what it could supply and seminars for vendors showed better planning, Friedman said. “Virtually everything they do now is of a more professional nature to the benefit of their success,” Friedman said. South of the border Now, Brent feels the company is ready for international sales, specifically the Latin American market. And he is planning to hire up to eight more employees throughout the year in assembly, quality control, inside sales and engineering. The preference is to hire Valley locals who are found at job fairs and by scouring area technical schools like ITT Technical Institute and DeVry University for qualified graduates. “Those kids are the top of the line,” said Philip Gayatin, the chief technology officer, of ITT students. Louroe is making the move at a time when U.S. exports are growing, rising to $2.2 trillion last year from $1.8 trillion in 2010, according to the U.S. Commerce Department. Javdani is leading the initiative starting with visits to Mexico to make contacts and attend trade shows, and getting Spanish-language ads into Latin American security industry publications. The company will need to build a sales base from scratch, but once those sales representatives are in place, Louroe can then move into Central America. It is working with U.S. Commercial Service, a trade promotion division of the Commerce Department. “We are talking to the U.S. Commercial Service to see what countries are good markets, the trade policies with these countries and what are the practices and customs for doing business,” Javdani said. Mexico and Argentina were identified as the two biggest security markets in Latin America in a 2009 study by the Security Industry Association, a Silver Springs, Md.-based trade group. But the study also identified absence of unified industry standards, lax government regulation, and low awareness about security measures as inhibitors to penetrating the Mexican market. Still, Su Kohn Ross, a federal regulatory attorney with Mitchell Silberberg + Knupp LLP in Los Angeles who works with U.S. exporters, said Latin America is an attractive market for U.S. makers of security devices. “The sophistication of the marketplace is rising and as you expand the market things get better,” Ross said. But for a company such as Louroe that works with distributors, he noted, it will face a challenge in vetting its business partners, if it wants to protect its trademarks, copyrights and other intellectual property. “From a standpoint of purely protecting your brand, you need to know who your buyers are and what they are doing with your product,” Ross said.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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