IBM sells off Greenock manufacturing plant

By Steve Malone

Posted on 8 Jan 2003 at 11:02

IBM has pulled out of the manufacture of low-end PCs and servers. Instead, it is outsourcing its range of low and mid-range eServer xSeries systems and IntelliStation workstations to Sanmina-SCI in a $3.6bn three year deal.

As part of the deal, Sanmina-SCI will take over the manufacturing facilities in Greenock, Scotland along with 650 employees. The Greenock facility currently supplies IBM hardware to Europe, the Middle East and Africa. Another 3,000 employees at Greenock in the call centre, customer ordering, tech support and logistics will continue to work for IBM.

During the three year contract, Sanmina-SCI will distribute and fulfil orders for IBM NetVista desktop systems, ThinkPad notebooks, and eServer xSeries systems, and configuration for some ThinkPad notebooks for customers in EMEA.

Sanmina will also be taking over a similar plant in Mexico which supplies the north and south American market. Top end systems will continue to be built in Pondicherry, India and Thinkpads in China.

The 650 IBM employees will be offered jobs with Sanmina-SCI with `the same salaries and competitive employment benefits.` IBM says that everyone will have private talks over the next six weeks to discuss their employment terms.

The announcement follows several days of speculation that the Greenock manufacturing facility might be closed altogether and production moved to another country, for example in Eastern Europe, where wage costs are lower. At the time of writing we were unable to contact Sanmina about its long-term plans for the Greenock plant and whether it can be competitive in the fierce global market.