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Ancon Gear & Instrument Corporation is initially leasing space from Honeywell, but eventually plans to buy property for its operations. The price of land was a factor in the decision for Ancon.

"One acre of land on Long Island costs about a half million. Here it's about $25,000," said David Serafini recently from his office on Lake Street. Serafini is purchasing manager for Honeywell. The supplier will also have a much easier time finding machinists, Serafini said.

"On Long Island machinists are not readily available." Not so in northern Michigan. The supplier has already received more than 50 job applications. At the outset, only two or three positions will be offered by Ancon, Serafini said.

Honeywell, a Fortune 100 company, has a long-standing relationship with its supplier, going back to 1982. Ancon supplies about 40 different parts a week to Honeywell.

But, because of distance, as well as other factors, the parts were not delivered to Honeywell as quickly as the company needed them. Serafini, Dario Primo and others at Honeywell began research to find a solution.

"We looked at the options," Serafini said. "They (Ancon) had the capability, but needed to do their business differently."

Honeywell looked at other successful companies and found that Toyota, for one, always had its suppliers right next to them, Serafini said. So, in October 2006, talks began that resulted in Ancon's decision to open satellite operations in Boyne City.

The arrangement is mutually beneficial. Transportation costs are eliminated for Honeywell and Primo conservatively estimates a 50 percent reduction in the time it takes to get manufactured parts to customers. Costs are reduced for Ancon in its business with Honeywell as well.

"They knew this is an opportunity to grow their business. They will get a broad audience here," Serafini said. "The benefits are very positive." Ancon's president, Joe Markiewicz, is also pleased.

"It's a little tight to find workers here (Long Island) and we think we can grow our business there," he said.

The companies plan to begin productivity in the second week in October.

Honeywell produces precision aerospace components for Boeing, the U.S. government, other Honeywell sites and other customers. It is one of the largest companies in the world with more than 120,000 employees worldwide. Its Boyne City location employs about 195 workers.