Leadership Grit: Straight Talk from UEC Electronics CEO, Mark Matthews

Mr. Matthews has years of experience in energy storage and battery technology. He started his career with EaglePicher as a Product Engineer and has also worked in various technical, business development and management roles within the power industry including Vice President of Sales and Marketing at both Ultralife Corporation and EaglePicher Technologies.

Recently, Matthews joined UEC Electronics as their CEO with a focus on continued growth and operational excellence.

The former product Engineer graduated Cum Laude from the Missouri University of Science and Technology, earning a degree in Engineering Management with an Emphasis in Chemical Engineering.

In a recent interview with South Carolina Manufacturing, Matthews took time to answer a few more questions about his new role.

1) We understand that UEC Electronics designs and manufactures advanced electrical products, but what capabilities or niche market areas differentiate the company from other similar contract manufacturers?

Our comprehensive hardware and software design capabilities, agile and automated electronics manufacturing capabilities, and lean processes allow us to deliver sophisticated, cost effective, solutions and products.

These core manufacturing and design principles, when applied to new product design and development, result in not only a product that hits the mark in terms of performance but a product that is designed for manufacturability from the conceptual phase forward.

UEC is inherently vertically integrated with a diverse and talented engineering team, in house rapid prototyping, (providing the ability to do quick turns which compresses design time), manufacturing capabilities (ranging from low rate to full production), and in-house T&E team which can provide custom test equipment as needed.

Our most recent investment is in environmental testing (temperature, shock, vibration) capabilities to meet the needs of our aerospace and defense customers, while further improving our product development times with the ability to perform in house validation testing on our new products.

UEC’s ability to develop, or enhance customer products, provide rapid prototypes, and quickly transition to production has been our strength as a “contract manufacturer”.  We continuously strive for cost reductions, while optimizing value.  Combining this approach and capabilities with our own internal expertise in energy collection and power management led to the product line now offered by UEC.  These hybrid power solutions provide significant fuel and logistics savings to our customers while providing safe and reliable power.

Our recent acquisition by Arotech further enhances our product capabilities as we are consolidating with their battery products and power solutions to offer a broader spectrum of products and services.

Arotech has an excellent vision for growth and with UEC is positioned as the cornerstone of the Power System Division we feel are now able to aggressively develop and sell our own product lines for a large variety of power and energy applications.

2) UEC has AS9100 certified aerospace quality systems.  What does UEC do for the aerospace industry and why is this market important to the company?

We do a large variety of products and manufacturing services for the Aerospace industry, ranging from power distribution to batteries and cables.  One of the large differentiators for our Aerospace customers is that UEC is not only building the solution but we also have the engineering and design capabilities to help solve our customer problems.

3) UEC has also developed their own proprietary line of mobile power battery systems for military field applications.  Can you tell us more about this product, how it was developed and what it does for your customers?

During the last five years, UEC has focused on developing our own intellectual property and product lines and is diversifying into more of a product based company.  UEC is a solution provider of energy collection, energy storage and power management systems for off-grid power and mobile applications.

We have delivered our hybrid power and vehicle power management solutions as a program of record to the USMC.  UEC’s products include primary and secondary battery packs, renewable and hybrid energy systems, and combat vehicle electrical systems for the Department of Defense and OEMs.

UEC Electronics’ Tactical and Edge Series Power Solutions are scalable, modular and easy to use. This product line consists of 300-watt (W) – 1,000W renewable power solutions as well as 1-kilowatt (kW) – 10.5kW hybrid power solutions. The differentiator between UEC Electronics systems and others on the market is their energy storage and system intelligence.

Each battery has 1,300 watt-hours of energy storage, weighs only 40 pounds (lbs.)/18 kilograms (kg), and is approved for commercial air shipment. The control software we developed for our systems intelligently collects, stores and distributes energy to insure power reliability and optimal system efficiency. UEC Electronics’ solutions have been used by the U.S. military for years and have a high reliability.

There are many locations both domestically and internationally where grid power is not reliable and generator usage is problematic. UEC Electronics understands and has spent years developing a line of products to provide power in even the most remote locations.

Rather than simply harvesting energy from the sun, UEC Electronics also stores that energy collected on a lightweight battery array for use when solar is not available. These technologies are coupled with fuel-fired generators to alleviate wet-stacking and reduce fuel consumption in remote areas.

4) Battery technology has certainly garnered a lot of attention over the past few years, ranging from the infamous fire on the Boeing 787 Dreamliner in 2013 to Elon Musk’s introduction of the Tesla “PowerWall” for the home market just last year.   What technology trends and advancements do you see in the future? 

We are currently tracking two trends in the battery industry that will drive customer adoption of our systems:  cost and safety.  The evolution of lithium ion battery and their superior performance has allowed our solutions to offer capabilities that previously were not achievable with traditional rechargeable battery chemistries.

We are closely tracking the cost of these batteries to such that we are able to provide better and better ROI’s for our customers, thereby opening new market opportunities.  That said, lithium batteries (particularly large lithium batteries) have a negative track record in terms of safety events.  As the technology continues to mature its safety record has to improve for acceptance over a large range of environmentally stringent markets.

5) Will UEC continue to invest in R&D for additional battery related product expansion? 

Yes. UEC is continually investing in our products lines, IP and manufacturing capabilities.  We are developing a customer centric new product development process to align our internally driven products to the evolving needs of our customers.

By including our customer’s voice early in the design process we are able partner with them to ensure we are meeting their needs and foster a better relationship between our business development team and our customers.  We are focused on co-developing solutions not simply pushing our latest developments to an existing customer base.

In April 2014, the 17-year old UEC which was founded by husband and wife team, Phillip and Rebecca Ufkes, was sold to Michigan-based Arotech Corp, which is a publicly traded company (NASDAQ: ARTX).

We know that many successful small companies like UEC grow over the years to the point where additional outside investment or even acquisition is needed to help expand and further propel the organization to greater heights.

6) As a new CEO that was brought on board post-acquisition and now with a little over a year under your belt, what was your key strategy and objectives?  What did you focus on during the critical first year and why?

As UEC has grown from our early years we have continually valued three things: efficient and cost effective manufacturing, maintaining a superior technical capability to solve our customer’s problems and creating a team environment to allow us to grow quickly and strategically.

As a new CEO, I wanted to maintain the culture that created UEC’s success in the first place and interject my vision of product development activities and a business development resources to continue to grow the business.

Getting these aspects of the company off the ground and fully functioning was my main focus in my first year.  In terms of what was most critical in year one, it was working to gain the trust and buy in of the employees.  I felt it was essential to learn what makes our business work and aligning the organization behind our expanded vision.

 

7) What advice could you give other new CEO’s that may be in a similar position, stepping in to lead a company after an acquisition?

Take time to listen to your employees and customers to understand what they like about the company and what areas can be improved.  By fostering an open environment where all opinions are valued accelerates a new CEO’s learning and builds trust with all parties.

I felt I needed to resist the urge to make immediate changes until I had a good grasp on where the true issues lied and how we can improve.  I found that the more involved I was with understanding the “why” and not just the outcome made it much easier to work on the issues that needed to be addressed.

 

8) A common question readers often ask us, especially if the acquiring firm is headquartered elsewhere, is “will the local division continue operations or be relocated in the future”.  What can you share about Arotech’s interest in maintaining and ideally continuing to grow UEC’s footprint in South Carolina?

UEC is fortunate that we are located exactly where we need to be.  We actually consolidated other Arotech businesses / locations into our facility.  It is clearly our long term plan to be located in South Carolina and as the core of Arotech US Power Division.

 

9) As a CEO of a growing company that could create more, higher wage advanced manufacturing jobs in the future, what advice would you give the state’s legislators and economic development leaders?  While there are many state issues grabbing headlines, from a CEO’s perspective what are the top two or three areas that deserve the most attention?

I would hope to see a continued investment in growing the technology infrastructure and assisting small to medium size businesses as they face the issues with growth. We have been fortunate to get help from organizations like SCMEP and the Charleston Metro Chamber of Commerce as we face issues around international business and go to market strategies.  The fact we were able to get assistance in those areas is huge for a growing company like UEC.

10) Manufacturing is a large and growing part of South Carolina’s GDP, but a shortage of trained workforce is a common problem frequently mentioned, especially as more of “baby boomer” generation nears retirement.  Can you give a few job roles found at UEC and the education and skills needed?  What steps and tactics is UEC taking to deal with future employment needs?  Also do you have any key workforce development partnerships in place?

At UEC we have a diverse workforce that ranges from all varieties of engineering, manufacturing, program management, technicians and skilled labor that you would expect to see an advanced DoD / Aerospace manufacturer.

To be honest, we feel lucky that we have been able to acquire and maintain the talent that we need, but we do share resources with other companies in the Charleston area and keep an open dialogue with our customers and other local manufactures to make sure we can maintain our workforce and skills we need.

11) As CEO with an engineering degree, what advice could you relay to parents, teachers, school counselors, and others about the importance of STEM education?  What can we do better to get more youth interested in manufacturing careers?

I am biased (obviously) but feel that an engineering degree provided me with the problem solving skills that continue to serve me every day at UEC.  As a parent of a 6th grader I am extremely passionate about the importance of giving our young students a foundation in a STEM based education.

It is vital to the continued economic growth of South Carolina to not only give students the STEM driven tools but also to demonstrate the applicability of those tools early on in the education process.  It is the responsibility of local government, community and industry to help in create the passion for the engineering and technology fields in our children.