Brett R. Larsen has started his duties as the new president and CEO of Spokane Valley-based Key Tronic Corp., taking the reins from Craig D. Gates who stepped down in June but remains on the company’s board of directors. 

Larsen joined the electronic manufacturing services tech company in 2004 as the company’s manager of financial reporting. He then served as Key Tronic’s controller for three years before leaving the company in 2008 for a two-year stint as the chief financial officer of FLSmidth Spokane Inc., an engineering concern that designed and sold large-scale materials-handling systems.

He returned to Key Tronic in 2010 and served as vice president of finance and controller. In 2015, he took on the roles of CFO, treasurer, and vice president of administration and served in them until recently becoming the company's highest-ranking executive. Before joining Key Tronic, Larsen held auditing and supervisory positions with Grant Thorton LLP and was an audit manager for the public accounting firm BDO Seidman LLC, where he had Key Tronic as a client. 

Larsen, 51, was born and raised in Yakima, Washington, and is a certified public accountant. He holds a bachelor's and master's in accounting from Brigham Young University in Provo, Utah. Larsen and his family moved to the Spokane area in 2000. 

Key Tronic (Nasdaq: KTCC) is headquartered in Spokane Valley. The company has about 260 employees in the Spokane area and 4,100 companywide. Originally founded as a keyboard manufacturer, the company moved into contract manufacturing about 25 years ago. 

The Journal recently sat down with Larsen to talk about what he wants to accomplish in his new role, the state of the contract manufacturing industry, and what obstacles lie ahead. 

You were a public accountant before joining Key Tronic. What interested you about joining the company? 

I really liked Key Tronic because it was fast paced. You get a really wide breadth of experience with all the different customers and industries we serve. We’ll build a medical product, an industrial product, and an exercise product all within the same facility. It gives you a chance to learn a little bit about those different industries and what makes them tick and what makes them successful. I’ve liked understanding accounting and finance acumen and being able to apply that knowledge in operations, strategy, coding, and other different types of things.

You’ve held many positions over the years. Can you tell me about your new role as CEO? 

It’s been in the process for a number of years. I’ve worked very closely with Craig. I learned a ton from him, and it’s great that he is still on the board; so is (former Key Tronic CFO) Ron Klawitter. My two mentors are just a phone call away. Craig had an engineering background, and it combined well with my finance and business background. I learned a ton from him about how to grow and oversee the overall business.

I think the best thing Craig did was leave Key Tronic with a strong management group. The average tenure of our officers and directors is 10 years here at Key Tronic. We have a lot of people who have knowledge and experience, and I just want to take it to the next level where there’s a whole new level of collaboration between us to push the ball even further.

What would that look like? 

The development of our employees is critical. For example, we kicked off a brand-new innovation program here that is going live next week. In our strategic planning, we recognized that we have a lot of smart people here, and we want them to know they are thought of highly. They’ve got ideas and ways to improve the things they do on a day-to-day basis. So we’re kicking off this innovation award that incentivizes people to come up with new ideas to say, here is a better way, a new way. The award is not just engineering based, it’s across the board; we had an estimator come up with this unique way to estimate a bill of materials, and all of a sudden, our quote throughput is two times as quick.

We want to be a part of the community. We are bringing on more internship capability. We’re trying to grow local talent to stay here at Key Tronic. Our internships are across the board in engineering, accounting, and purchasing. Once people are here, they stick around because there are so many different opportunities, and it's difficult to get that global experience of a big public manufacturer in Spokane proper.  

Reshoring has been a global trend in manufacturing lately that Key Tronic has benefitted from. Is that process still happening? 

There is still growing demand for building things in North America. A lot of people want to nearshore; they want to build their products as close to their customers as possible. We’re seeing a lot of people willing to pay a little extra to keep their manufacturing service provider in the U.S.

Spokane is the command and control for the whole company. We’ve got engineers, program managers, commodity folks, purchasers, and accounting. All of that is centralized here in Spokane. We’ve got our tool shop, which builds complex mold tools here in the industrial park. Downstairs we have a design group, which is a bunch of engineers that can take anything from an idea on the back of a napkin to ultimate design and build it in one of our facilities. A lot of design and engineering is what has helped Key Tronic grow. It has helped grow our business relations. We’re going to continue to invest in growing that design team. It’s up to about 50 people now, double the size it was just five years ago.

What are the obstacles ahead of you?

Probably our biggest concern is we are coming out of a huge supply chain constraint. We had to change our business model so we didn’t become overinventoried. With inflation, the impact that has had on interest costs, and the cost of capital, we’re really going to have to be very nimble going forward to make sure we have enough liquidity. I foresee us growing. We’re just going to have to make sure that we’re very cautious with what we spend because it’s really expensive now to get a loan.

That financial management relates to the effort of wanting to empower people. Every week, I sit down with our program managers who will have a report on how their program is doing. We walk through the opportunities, threats, weaknesses, and how to grow our customer relationships further.

As CEO, it’s fun to see all those building blocks being used in empowering our people to become essentially mini-CEOs of their own programs.

This interview has been edited for length and clarity.