This Long Island Industry Is Beating the Recession; Demand Remains Strong for Alarms and Security Systems to Keep Burglars Away - The New York …
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`April 8, 1992
`
`This Long Island Industry Is Beating the Recession;
`Demand Remains Strong for Alarms and Security
`Systems to Keep Burglars Away
`
`By N. R. KLEINFIELD,
`
`SYOSSET, L.I.— Don't get jumpy if you think that something is watching you.
`
`Lots of things are.
`
`Wandering around the thick maze of unprepossessing buildings occupied here by the Ademco Security
`Group is not for the paranoid. The low-slung, stark complex is amply outfitted with passive infrared
`motion detectors and control communicators. There are wired and wireless alarm systems. It is small
`wonder that no one can remember the last time there was a break-in.
`
`Ademco happens to be the world's largest manufacturer of security and alarm devices, and along with
`Napco Security Systems in Amityville, it is part of an industry that is something of a Long Island secret.
`
`To many people, manufacturing on Long Island means the beleaguered military contractors (some
`people think it simply means Grumman). And, in fact, the three largest manufacturers on Long Island
`are companies that make fighter planes and other weapons of war. But next in line is Ademco.
`
`While many manufacturers have been rudely bruised by the recession, Ademco says it has managed to
`hold its own and grow a bit, albeit slowly. The company employs some 1,400 people and does 80 percent
`of its manufacturing in its sprawl of buildings here; the other 20 percent is done in Mexico.
`
`Napco, with 900 employees, is smaller than Ademco, but it, too, is holding its own, said Kevin S. Buchel,
`the company's vice president for finance and administration. Managing to Stay Ahead
`
`"The economy is still floundering," he said, "and yet we are managing to stay even or a little ahead of
`where we have been." Napco was founded in the 1970's in Farmingdale.
`
`A third alarm company is also prospering on Long Island, National Security Systems of Manhasset,
`which has 27 employees and supplied the security system for the Taj Mahal casino in Atlantic City.
`
`John W. Walter, the company's president, said his company was the Ferrari of the security systems
`industry -- small, fast and expensive. Ademco is the industry's General Motors, he said, and Napco it's
`Ford.
`
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`This Long Island Industry Is Beating the Recession; Demand Remains Strong for Alarms and Security Systems to Keep Burglars Away - The New York …
`In its complex here, Ademco makes just about any sort of intrusion sensor known to thieves -- sensors
`that detect a door opening, sensors that pick up motion, sensors that go off at the sound of glass
`breaking, floor mats that squeal if someone walks over them, shock sensors that are touched off at the
`jolts created when someone pounds a sledge-hammer against a wall.
`
`The company was founded in Brooklyn in 1929 by Maurice Coleman. Back then, it made very elementary
`mechanical alarm systems, the kind that would trigger a loudly clanging bell in the event of a break-in. In
`the early days of alarm services, "runners," when an alarm sounded, would hurriedly scamper to a house
`to see what was amiss.
`
`Ademco is now owned by the Pittway Corporation, a billion-dollar enterprise based in Northbrook, Ill.,
`that also makes hair sprays and deodorants, publishes trade magazines and provides delivery services.
`Selling to the Russians
`
`Even the Russians find Ademco's products of some interest. The company said it recently signed an
`agreement with Ohrana, the security agency, to sell alarm systems to the Russians, who appear to be
`more interested in security products because of rising crime fomented by the economic upheaval. But
`Ademco's chief executive officer, Leo Guthart, a former Harvard Business School faculty member, is
`dubious about how much business may result in the immediate future. "There's an economic question,"
`he said. "Can they pay for anything?"
`
`Ademco behaves emphatically like a security company. When queried in certain areas, Mr. Guthart gets
`extraordinarily bashful about information.
`
`"What are Ademco's sales?"
`
`"I can't divulge that."
`
`"How about its profits?"
`
`"I can't say."
`
`"What is its market share?"
`
`"I wouldn't know."
`
`After a certain amount of polite fencing, Mr. Guthart grudgingly concedes that Ademco does hundreds of
`millions of dollars worth of business and has a market share that approaches 35 percent.
`
`Ademco has lived through radical change in alarm technology. Earlier intrusion sensors were disturbingly
`imprecise. They were generally ultrasonic motion sensors that had difficulty differentiating between a
`fluttering curtain and a fearless burglar. The cat could bring the police.
`
`Today, infrared sensors that pick up body heat are commonly used, and they are arranged in "point
`identification" systems, in which every window and every door becomes a separate point that is guarded.
`Thus the systems can determine that someone just crawled in through the second window in the den, has
`moved across the room and is now standing by the expensive stereo in the living room. False Alarms
`
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`This Long Island Industry Is Beating the Recession; Demand Remains Strong for Alarms and Security Systems to Keep Burglars Away - The New York …
`The improvement has substantially reduced the spate of false alarms, always a rankling issue in the
`industry. Security services and the police are never enthusiastic about dashing to a home to find nothing
`more menacing than a fluttering drape.
`
`In its efforts to outsmart burglars, Ademco's focus, applied with near missionary fervor, is to rid security
`systems of wires and telephones. For most of its existence, the alarm business has deployed wire to
`connect sensors to a control, which is the brain of a system. Then the telephone has been relied on as the
`means of communication to a security monitoring station.
`
`Wire requires expensive skilled labor to install. And the telephone has its vagaries and weaknesses. A
`storm can topple telephone poles. A thief can slash the wires. Ademco likes to point out familiar
`escapades like a phone call to report a burglary being greeted with the recorded message, "I'm sorry, all
`circuits are busy. Try again later." Or the time burglars stole $2 million from a Chicago jewelry maker
`after cutting the cables linking the alarm system to a Wells Fargo Alarm Services office.
`
`Ademco prefers radio. Rather than run wires through attics and walls of a house to connect sensors,
`Ademco encourages the use of sensors equipped with radio transmitters. And then, rather than have
`those sensors communicate to a security company over telephone lines, it makes systems that broadcast
`radio signals.
`
`In the early 1980's, Ademco acquired a cluster of Federal Communications Commission licenses to gain
`access to unused radio frequencies and then set up a cellular network so it could privately broadcast news
`of burglars sneaking into houses to security companies.
`
`Wireless systems are now the fastest growing portion of the alarm business. Not that any system is truly
`impenetrable. There are ways to interfere with radio signals in a wireless system. But people in the alarm
`business prefer to brush aside the subject. "We don't like to talk about defeat," Mr. Guthart said. "Listen,
`the C.I.A. system could be defeated by the K.G.B. if it put enough effort into it."
`
`Basically, money buys comfort. A decent but simple home system today runs in the neighborhood of
`$1,000 to $1,500, though you can also spend several times that. In addition, there are monthly fees to
`alarm companies.
`
`Lasting success in the alarm business is a matter of hustling and wrangling. Steadily cheaper prices are
`instrumental. Smoke alarms have plummeted in cost from about $200 in 1970 to as little as $3.99 today.
`People expect the same of burglar alarms.
`
`"Nobody wants to buy an alarm system," said Steven Winick, a vice president of Ademco. "They buy it
`because they're afraid of something. So whatever an alarm system costs, it costs too much."
`
`Photo: The Ademco Security Group in Syossett, L.I., is the world's largest manufacturer of security and
`alarm devices. Leo Guthart, above, the chief executive officer, says the company does hundreds of
`millions of dollars worth of business and has a market share that approaches 35 percent. (Michael Shavel
`for The New York Times) (pg. B2)
`
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`This Long Island Industry Is Beating the Recession; Demand Remains Strong for Alarms and Security Systems to Keep Burglars Away - The New York …
`
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