More OEMs sell facilities to contract manufacturers

By Staff -- Purchasing, 5/20/1999

The move by contract manufacturers to acquire the manufacturing facilities of original equipment manufacturers shows no signs of abating. Flextronics International says it will purchase Ericsson's Visby, Sweden operations and Solectron is acquiring the manufacturing assets of Trimble.

The Ericsson facility focuses on manufacturing for the mobile systems infrastructure, primarily radio base stations. Under the terms of the agreement, Flextronics will acquire the entire facility, including equipment and materials, and has agreed to offer employment to all 900 employees currently employed at the Visby plant. The transfer is planned to be effective July 1.

Ericsson says it is selling the facility because high-volume manufacturing and production of telecommunication products is not its core competency. Rather, the company will focus on intellectual property issues and design.

Meanwhile, Solectron has announced it will acquire the manufacturing operations of Trimble in Sunnyvale, Calif. Trimble makes global positioning satellite products for mapping, military, commercial aviation, mining and automotive industries.

GPS is a new market for Solectron. The contract manufacturer expects to integrate Trimble's operation into its California campus within six to 12 months. It will soon begin manufacturing operations in Trimble's 85,000 square foot facility.

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