Cover Story
OEMs Put Products on Fast Track to Low-Cost Regions
Market Data
Market Trend
Expired Date Codes Equal Big Savings
News
Sanmina-SCI To Add Medical Site in Israel
Display Company Makes EMS Move
Solectron Launches Automotive Unit
Time was when OEMs followed a phased approach to launching production in low-cost regions. NPI runs, pilot production and early volume production were done in high-cost regions to stabilize the product before it was transferred to a low-cost center. Now that more and more OEMs are gaining confidence in outsourcing to low-cost geographies, they want to move their products there as quickly as possible. The faster the products get there, the sooner the OEMs can start capturing cost savings.
"What they're really driving is to do the development in the US or Western Europe. Then they want to do the launch of their product in the low-cost regions," said Vince DePalma, Ph.D., Solectron VP of NPI and technology. So the early production that might last six months or so in the US or Western Europe is disappearing.
"The real issue is where to do the pilot, and product complexity is a significant factor in that decision," said DePalma. OEM designers "still prefer to do the pilots in the NPI centers because you're still going to have those last few engineering changes," he noted. But OEM operations people want the pilot done in low-cost regions to avoid a product hand-off and obtain the lowest cost on pilot runs. "Right now it's a battle between operations people and the development people," said DePalma. Nonetheless, some Solectron customers have opted for pilot runs in low-cost regions.
The need for faster product transfer to low-cost regions can be bad news for a provider doing volume production in a high-cost location. Take Plexus, which has several new programs from Powerwave in Plexus' San Diego, CA facility. The customer recently notified Plexus that it would move these programs to competitor facilities in Asia that were already manufacturing for Powerwave rather than qualify Plexus' Malaysia facility to do the work (see also p. 6). While it is not clear how much time would be needed to qualify the facility, it appears that Powerwave was unwilling to spend any time on it.
To accelerate product transfer to low-cost regions, providers such as Solectron and Flextronics are adding front-end capabilities there. Most recently, Flextronics opened a Technology Center on its industrial park in Guadalajara, Mexico. This center does, among other things, reliability testing and failure analysis for products in development. Flextronics is also planning to add Technology Centers within its parks in Gdansk, Poland, and Shanghai, China. The capabilities of these centers are especially useful for communications infrastructure products.
Flextronics also plans to double its design and development staff in Asia by March 2003. The staff will increase from 150 to about 300, with the majority of this growth occurring in China at the company's Guangzhou, Shenzhen and Shanghai facilities. Solectron has also been building up design capabilities in Asia and Central Europe.
By offering front-end capabilities such as DFX in low-cost regions, providers can facilitate the transfer from product development to volume production.
Although global providers are in a position to support faster transfers to low-cost locations, smaller providers in the US and Europe could end up victims of this trend. In the past, it was often these local or regional providers who acted as a bridge to low-cost production elsewhere. More and more OEMs now want to bypass that bridge.
Citing a delayed recovery in end markets, Technology Forecasters Inc., or TFI (Alameda, CA), has lowered its EMS market forecast for 2002 through 2005. The consulting and market research firm has changed its outlook from slight growth of 3.0% this year to a decline of 9.0% (table). For 2003, TFI has reduced its projected growth rate from 21.0% to 7.0%.
Eric Miscoll, TFI's COO, explained that "our optimism for the recovery in 2002 was not realized. Growth in outsourcing will certainly continue, both to EMS and ODM [markets], but recovery in end markets is further out than we thought last year."
Combining TFI's new numbers with previous estimates of two other firms yields a new set of average estimates for EMS market size and growth (table). The average estimate of 2002 market size is now $92.7 billion, increasing to $102.8 billion in 2003. For the 2002 market, the mean decline predicted by the three firms works out to 5.4%. Next year, the market is expected to grow by 10.8% on average. That's down from a previous average of 15.5% (Oct., p. 2).
While market size estimates are within $5 billion of each other for 2002, they show a significant spread by the end of the forecast period. For 2006, they range from $136.5 billion to $201.7 billion, indicating differences in projected growth rates among the three firms. The average of the 2006 estimates is $169.4 billion, corresponding to a CAGR of about 16% from 2002 to 2006.
At the same time, North America will lose share of the supply side of the global EMS market, predicts TFI. The shift of EMS capacity away from high-cost regions will leave North America with a 17% share in 2006, down from 33% in 2001. Of course, Asia will benefit from this shift as its share will rise from 29% of EMS supply in 2001 to 42% in 2006. TFI also forecasts that Europe will lose four points of share and end up with 24% in 2006. Interestingly, the firm sees Japan's share increasing over the forecast period from 3% to 8% of supply.
ODMs have also attracted market researchers. TFI sees the ODM market growing steadily from 2001 to 2006. The firm estimates that the ODM business this year amounts to $36.4 billion, up from $32.5 billion in 2001. For 2003, TFI is forecasting ODM market growth of 14.8% to $41.8 billion. The firm expects the ODM business to continue to expand, increasing to $49.4 billion, $59.3 billion and $72.4 billion in the following three years.
The EMS industry, starting with the largest providers, is being tempted to break its own rule against using components that are more than two years old. And the reason is simple. A lot of money can be saved.
Independent distributors are offering large discounts on components whose date codes indicate an age beyond the two-year limit. What's more, the pool of such parts is already large. The downturn created excess inventory, estimated at $20 billion or more. "I can guarantee that a large portion of that, maybe 50 or 60 percent, is still out there in the independent channel," said Jim Magee, president of America II Electronics (St. Petersburg, FL), an independent distributor. Excess parts that were bought during the inventory buildup of 2000 have reached the two-year limit.
How much can be saved by buying parts with expired date codes? Magee won't reveal America II's discounts for competitive reasons. But he did say, "The people we've talked about on the date code [price] reduction feel that it's material to their overall profit."
Some of the largest providers have already begun to take advantage. "A couple of the big guys have been successful. It's program by program; it's not across their whole operation," said Magee. "Obviously, there are certain customers that don't want to hear anything about it."
Still, according to America II, not everyone is aware of the discounts. "I'm convinced the second-tier and lower guys have no idea what's going on," said J.P. Androff, worldwide director of contract manufacturing services at America II. Magee pointed out, "It's probably a more significant issue for them because of the possible cost savings."
In light of these savings, people are starting to take a closer look at the two-year limit. "When these requirements were initially put in place, a large percentage of the mix was DIP packages. And DIP packages come basically in open tubes...," explained Magee, who has discussed this issue with many people at the large EMS companies. "The main reason obviously for the date code restriction is for corrosion and the ability to solder the leads. Because the mix now is upwards of 85 to 90 percent surface mount and all that stuff is tape and reeled and also comes in vacuum-sealed bags, people are starting to question whether or not it's a real issue right now."
Some time ago, the National Electronic Distributors Association addressed the date code issue with a white paper, posted on the NEDA web site. The paper states, "Product does not wear out, deteriorate or age on the shelf to an extent that could adversely affect performance, and a product inventoried by an authorized distributor, using NEDA guidelines on packing and handling, will have suffered no deleterious effects over time under modern conditions of storage."
At issue is lead solderability, which can be compromised by oxidation or the growth of intermetallic layers. "Oxidation and intermetallic layer growth are both a function of time and temperature. Oxidation is also a function of humidity. If the components are stored in moisture sealed packaging and stored in a conditioned stockroom environment, the components should last almost indefinitely," said Phil Yates, CTO of Nextek (Madison, AL). Nextek is an EMS provider that also offers analytical services.
Another defect that can occur over time is the popcorning of plastic IC packages due to moisture absorption. But the EMS industry has learned how to prevent this problem.
Although expert opinions like those of the NEDA and Phil Yates show that the two-year limit may be outdated, questions remain. What happens if parts aren't stored in a conditioned environment? In that case, does risk increase over time?
America II's Magee believes that relaxing the date code restriction should be part of a risk assessment program within EMS companies.
Sanmina-SCI (San Jose, CA) has signed an agreement to acquire Elscint Limited's manufacturing, assembly, engineering and integration operations in Ma'alot, Israel. Mainly for medical imaging equipment, these operations in Northern Israel are associated with Elscint's business in subassemblies and components. Sanmina-SCI describes this factory as manufacturing high-end complex medical systems and other high-end industrial products. Principal customers include GE Medical Systems and Philips Medical Systems, both of whom are existing customers of Sanmina-SCI. Financial terms were not disclosed.
But in November when Elscint announced an agreement to sell the operations to an unnamed buyer, the deal was valued at about $34 million. This figure consisted of asset book value of the business less liabilities plus a goodwill payment.
"This operation, which will become part of our recently formed Medical Systems Division, significantly strengthens our service offering in this fast-growing market sector. In addition, it furthers our goals of diversifying our customer end markets and expanding our total turnkey service capabilities," stated Jure Sola, chairman and CEO of Sanmina-SCI.
"The facility will support the strong, local medical R&D activity and enable us to deliver leading-edge CT and nuclear medicine systems to key OEMs globally," said John Hendrick, executive VP of Sanmina-SCI's Medical Division.
The division was announced in July, and Hendrick, a former medical executive, was brought in to run it.
According to a profile by Hoover's, Elscint had already sold off its medical imaging systems manufacturing before going into the hotel development and leisure business. That move left the company with a subassemblies and components business. Elscint, a majority-owned subsidiary of Israel's Elbit Medical Imaging Ltd., also invests in biotechnology companies.
Publicly-held Three-Five Systems (Tempe, AZ), a manufacturer of display products and systems, has acquired ETMA, a privately-held EMS company in Redmond, WA. Three-Five paid $38 million in cash for ETMA, which is expected to generate sales of about $65 million and EBITDA of about 10% in 2003.
With six SMT lines, ETMA serves OEMs in the computer/server, medical monitoring and Internet security industries. Key customers include Avocent, a producer of keyboard, video, mouse switches; Medtronic Physio-Control, a Medtronic division that makes defibrillators and monitors; WatchGuard Technologies, a developer of security software and firewall hardware for virtual private networks; and Spacelabs Medical, a maker of healthcare systems and medical devices.
According to Three-Five, this acquisition is part of its effort to expand its Integrated Systems Business. This business has designed and manufactured custom module subsystems in display-centric applications such as front panel assemblies and handheld products. Asian manufacturing locations are included in these services.
"Three-Five and ETMA have very complementary strengths," stated Jack Saltich, president and CEO of Three-Five Systems. "Three-Five provides expertise in display-related design engineering and high-volume offshore manufacturing in Asia. ETMA provides core manufacturing expertise in higher-level systems integration."
With the acquisition of ETMA, Three-Five is now a full-fledged EMS provider as well as a supplier to the EMS industry.
Crane Co. (Stamford, CT), a diversified manufacturer of engineered industrial products, has expanded its EMS capabilities with the acquisition of General Technology Corp., or GTC, an EMS provider in Albuquerque, NM. Crane Co. bought all of the outstanding shares of GTC from an ESOP (employee stock ownership plan) trust for a purchase price of $25 million in cash and assumed debt.
GTC is a hi-rel contract manufacturer serving the aerospace, aviation, medical, communications and defense markets. Last year, GTC rang up sales of about $22 million. The 21-year-old company operates a 72,000-ft2 facility in Albuquerque and has about 200 employees. GTC will become a subsidiary of Crane Co. and be integrated with Crane's Aerospace Electronics business segment.
"This acquisition supports the electronic manufacturing solutions strategy of our Aerospace Group Electronics business segment," stated Eric Fast, president and CEO of Crane Co. "General Technology is a profitable business that will expand our capabilities in the growing military and defense market, as well as expand our geographic footprint."
With a focus described as military and defense, GTC counts among its customers Honeywell Defense, Lockheed-Martin, Northrup Grumman, Raytheon, Boeing and TRW Space & Electronics.
Crane has engaged in EMS through its Interpoint operation, which manufactures custom microelectronics, medical electronics, radiation-hardened space electronics, DC-to-DC converters and filters. "Clearly, GTC is an extension of our custom microelectronics business," said Pamela Styles, director of investor relations and strategic planning at Crane Co.
Traded on the New York Stock Exchange, Crane recorded sales of $1.59 billion in 2001. Of that amount, electronics accounted for about $100 million. Prior to the GTC acquisition, Crane's Aerospace Electronics segment consisted of Interpoint and part of Eldec, a component manufacturer. The electronics segment serves the EMS, custom medical and power supply markets.
GTC is unusual in the EMS industry in that it was entirely owned by its employees. The company's ESOP acquired all outstanding stock in 1998.
New programs...Flextronics (Singapore) has done the embedded design for Fossil's new watch-sized PDA. Flextronics also serves as the product's manufacturer....Celestica (Toronto, Canada) and Corvis (Columbia, MD), a supplier of optical networking solutions, have entered into a multiyear outsourcing agreement, under which Corvis will move all of its manufacturing to Celestica except for final assembly, system integration and testing. The transition is expected to be complete in Q2 of 2003. Also, Celestica is working with RackSaver (San Diego, CA) on the development of its 1U Intel Itanium 2 server, which is rack optimized....Viasystems (St. Louis, MO) will manufacture 61,000 disposable CDMA cell phones for Hop-On (Irvine, CA). The order is the first phase of a volume manufacturing and component sourcing agreement for production in China. These cell phones are also fully recyclable....Nam Tai Electronics (Hong Kong) has received orders to produce color LCD modules for mobile phones. Producing these color modules represents a new business for Nam Tai, which expects more and more handset manufacturers to switch from monochrome to color displays next year....DRS Technologies (Parsippany, NY) has landed a $2.1-million turnkey contract to provide circuit card assembly, cable and wire harness assembly, and all subsystem integration for signal processors, pedestal controllers and power amplifiers within the Electronic Support Measures System used by the US Navy's P-3C Orion surveillance aircraft. This work will take place at the company's DRS Laurel Technologies unit in Johnstown, PA. The system was developed by EDO Reconnaissance and Surveillance Systems (Morgan Hill, CA)....DRS Power & Control Technologies, a unit of DRS Technologies, has awarded LaBarge (St. Louis, MO) a follow-on contract to make card assemblies for the US Navy's next-generation attack submarine. The contract is valued at more than $1 million....Amex-listed Winland Electronics (Mankato, MN) has signed a new three-year manufacturing agreement with its largest customer, Select Comfort Corp. Winland focuses on three markets: EMS, environmental security products and DC motor controls, and its business includes proprietary products for the security/industrial marketplace. For the first nine months, the company reported net income of $662,249 on sales of $13.4 million.
Solectron (Milpitas, CA) recently unveiled its integrated offerings to the automotive electronics industry under a new umbrella, Solectron Automotive. The new automotive unit underscores Solectron's pursuit of automotive electronics business as part of a diversification strategy.
"We are investing in and expanding our automotive services. The automotive sector is a key market for Solectron, and we are building a long-term position in this important industry," stated Brian Antell, senior VP of Solectron and president of Solectron Microsystems.
It could be argued that Solectron's automotive thrust started with its 2000-2001 acquisition of two Sony facilities engaged in the production of automotive navigation systems and car audio systems, among other products (Oct. '00, p. 5). The early 2001 takeover of EMS provider NatSteel Electronics added other products to the automotive portfolio. As a result of these two deals, Solectron produces control modules for airbags and anti-lock brake applications, and designs and manufactures car audio products and vehicle navigation systems.
But Solectron made perhaps its biggest move in automotive electronics when it acquired C-MAC Industries in 2001 (Aug. '01, p. 1-2). C-MAC had been following an automotive strategy of its own that combined automotive capabilities such as hybrid microelectronics with acquisitions. In 2000, C-MAC's acquisitions included Invotronics, a manufacturer of automotive parts, and Kavilco, a sensor supplier. So the C-MAC deal gave Solectron automotive technology and products expertise in such items as electronic pressure sensors, under-the-hood hybrid microelectronics, data bus and body electronic controls, actuators, switches, telematics, RF modules, GPS modules, and simultaneous voice and data (SVD) protocol.
SVD technology enables the sending of data and voice simultaneously over a channel normally used only for a cellular call without degrading audio quality. Navox, a Solectron company and a former C-MAC subsidiary, has used its SVD technology to develop audio-band voice and data modems. Now Navox has landed a supply agreement with Chapman Technologies, which will use Navox's SVD technology in Chapman's GPS/cellular mobile security devices. As part of the agreement, Solectron will provide manufacturing, repair, logistics and contact-center services for Chapman's new automotive products such as its Vehicle Locator.
In automotive electronics, Solectron sees a large market that is growing with the increasing use of electronics within cars. According to a 2001 study by the Freedonia Group (Cleveland, OH), OEM automotive electronics amounted to a $70-billion global market in 2000. The study forecasted a 6.8% growth rate for this market through 2005, when it would reach $97.5 billion. Note that these numbers did not include the aftermarket for automotive parts.
When it comes to outsourcing of automotive electronics, system integrators occupy the driver's seat because 90% of what the car companies outsource goes to these integrators, according to a recent report from Technology Forecasters Inc. (Alameda, CA). EMS providers pick up the remaining 10%. But the tier-one suppliers who mostly provide this system integration do not themselves outsource to a large extent. TFI estimates that tier-one suppliers are 21% outsourced this year and will increase their outsourcing level to 29% in 2006. In addition, TFI finds that EMS providers account for only 45% of outsourcing from tier-one suppliers. The majority, 55%, goes to a combination of system integrators (28%) and ODMs (27%).
Solectron Automotive currently supports automotive OEMs as well as tier-one, tier-two and tier-three suppliers. The new unit made its debut at Convergence 2002, a transportation electronics conference held in October.
The automotive business has long been a niche market within the EMS industry. Jabil Circuit (St. Petersburg, FL) was founded as an automotive contract manufacturer, and midtier players such as Kimball Electronics Group (Jasper, IN) and Saturn Electronics & Engineering (Auburn Hills, MI) have derived substantial portions of their revenue from that market. Providers outside the US have also penetrated the automotive market. They include Finmek Group (Padova, Italy), which acquired a division of Magneti Marelli; Surface Mount Technology (Holdings) Limited (Hong Kong); VIDEOTON Holding (Szekesfehervar, Hungary); and VOGT electronic (Obernzell, Germany).
Although Jabil Circuit continues to eschew vertical integration, it does have an enclosure unit. At the beginning of the year, Jabil quietly gave its enclosure skills a name, Jabil Enclosure Integration Services (JEIS). Now the name is gaining visibility as Jabil promotes JEIS's ability to provide a process and expertise for building level-3 enclosures when needed by customers of Jabil's business units.
"JEIS provides design inputs to Jabil Technology Services (JTS), assures best practices in manufacturing at the BU [business unit] level, and insures that the level-2 and -3 supply chain is well equipped to meet our needs," said Beth Walters, VP of investor relations and communications at Jabil.
When deployed at a business unit, JEIS can manage the supply of level-3 enclosures either from customer-specified suppliers or from Jabil itself. In the latter case, Jabil assembles level-3 enclosures by sourcing level-2 suppliers of metal parts, plastics, wire harnesses, fans and power supplies. Backplanes, on the other hand, can be assembled by JEIS or outsourced.
By relying on these level-2 suppliers, Jabil avoids the vertical integration practiced by some of its tier-one competitors.
On the front end, JEIS will manage the design of complete level-3 enclosures by leveraging JTS and Jabil's supply base. JEIS will also support business-unit quotes for level-3 enclosures, provide business units with best manufacturing practices and expertise, and help to manage the level-2 supply base. In addition, JEIS will assemble backplanes on dedicated equipment when technology and volumes dictate.
New facilities...SigmaTron International (Elk Grove Village, IL) plans to open a new facility in the Wujiang Economic Development Zone in China. The company has selected a site and expects to start construction in early 2003....MSL (Concord, MA) has relocated its Malaysian operation to an 80,000-ft2 facility in Johor Bahru. Approximately twice the size of the prior site, the new facility is producing for customers with medium- to high-complexity requirements in the medical, industrial and carrier-class communications segments....According to Reuters, Venture (Singapore) has begun pilot production in its new 100,000-ft2 plant in Shanghai, China....Surface Mount Technology (Holdings) Limited, or SMTL (Hong Kong), has started production in its new 80,000-ft2 factory in Suzhou with two SMT lines. The company has landed a project to produce PCB assemblies for DVD mechanisms, and the facility is already running at full capacity. To fulfill the increase in orders from customers in both Dongguan and Suzhou, SMTL continues to expand its production capacity and plans to increase its total number of SMT lines from 54 at the end of September to 60 by the end of March 2003.
Restructuring continues...Accord-ing to Sanmina-SCI's form 10K filed this month, since December 2001 the company has shut or started the closure of 42 facilities, primarily in North America. These facilities account for about 5.5 million ft2. Sanmina-SCI expects to close additional facilities in fiscal 2003 and fiscal 2004 in its second phase of restructuring (Nov., p. 8). One of the latest plants to face closure is a 143,000-ft2 facility in Tikkakoski, Finland, with 300 jobs, as reported by Reuters. As of Nov. 1, Sanmina-SCI's manufacturing facilities totaled about 21.0 million ft2....Multek, a subsidiary of Flextronics, will close its PCB fabrication facilities in Irvine, CA, and Kumla, Sweden. The Irvine operations will be relocated to Roseville, MN, and Guadalajara, Mexico. Restructuring charges related primarily to this action are expected to be less than $100 million....Plexus (Neenah, WI) said it intends to close its facility in San Diego, CA, after its major customer in San Diego, Powerwave, indicated that it would move several new programs to other non-Plexus facilities in Asia during the March 2003 quarter. The provider will also take other restructuring actions, including the consolidation of buildings in Seattle, WA, and the UK; closure of a design center in Dallas, TX; and further alignment in Wisconsin. Facility space will drop by about 210,000 ft2, and about 400 employees will be affected. Plexus estimates restructuring charges of about $50 to $60 million, to be taken in the December quarter. While Powerwave will remain a Plexus customer for legacy products, Plexus expects the loss of this San Diego business will impact fiscal 2003 revenue....Solectron has shuttered its 100,000-ft2 facility in Calgary, Alberta, Canada....SMTEK International (Moorpark, CA) is consolidating its San Diego facility into its other California operations in Moorpark and Santa Clara. As a result, the company will take a one-time charge of about $2.3 to $3.0 million.
Some financial news...Sanmina-SCI intends to issue $450 million of senior secured notes with a seven-year maturity and to enter into a new $250-million senior secured credit facility. The net proceeds from the notes, in combination with the net proceeds from the new credit facility, will be used to repay debt under the existing credit facility, to repay the outstanding balance under the company's receivables securitization facility, to refinance or restructure other debt, and to fund working capital and business expan-sion....Elcoteq (Espoo, Finland) recorded Q3 sales of 456.1 million euros, up 7% year over year and sequentially. Full-year sales are estimated to exceed 1.8 billion euros. The company generated Q3 operating profit of 12.7 million euros....For the six months ended Sept. 30, Surface Mount Technology (Holdings) Limited of Hong Kong reported that sales grew 93% from a year earlier to HK$756.4 million. Net profit for the first half of fiscal 2003 came to HK$41.7 million, compared with HK$9.0 million for the year-earlier period. SMTL attributed the sales growth to acceleration in Japanese outsourcing, relocation of production from Korea, and strong domestic demand in China. The company expects to maintain growth momentum into the second half of fiscal 2003, aided in part by the start-up of handset assembly in fiscal Q4. All production facilities are at full capacity....Reptron Manufacturing Services, the EMS unit of Reptron Electronics (Tampa, FL) posted its second consecutive quarter of sales growth. In Q3, EMS sales amounted to $45.9 million, up 7% over Q2 and 18% versus a year earlier. The EMS unit had cash earnings of $840,000 for Q3. Reptron plans to invest in this portion of its business, while it continues to analyze its options with regard to its distribution business, which has suffered during the downturn....The Electronics Manufacturing business of Varian (Palo Alto, CA) finished the fiscal year ended Sept. 27 with $175 million of revenue. Sales were down 3% from the prior year. Operating profit margin for the year was 10.2%....Nam Tai Electronics (Hong Kong) has raised about $29.8 million from the exercise of warrants. The company has also declared a special dividend of $1.00 per share as a result of the gains from a legal case and the investment in Huizhou TCL Mobile Communication....For the quarter ended Oct. 31, SigmaTron International recorded sales of $22.6 million, down 12% from the year-earlier period. But net income increased to $1.1 million from $923,849 a year earlier....Integrex (Bothell, WA) has closed $8 million in financing through a round of equity, subordinated debt, and a revolving line of credit. The company said this round of financing will sustain its planned growth.
Effective Nov. 1, 2002, Jabil Circuit (St. Petersburg, FL) made a number of changes in its management team starting with the position of chief operating officer. The provider named Mark Mondello its COO, succeeding Ron Rapp, who retired last month. Mondello will oversee the company's business development and operations worldwide. He had been senior VP of business development.
Jabil promoted Scott Brown to executive VP, a new position with responsibility for strategic planning, corporate development, Jabil Global Services, Jabil Technology Services and Jabil Enclosure Integration Services. He most recently served as senior VP of strategic planning.
The company also promoted John Lovato to take Mondello's place as senior VP of business development. Lovato's most recent position was VP of global business units. That title went to Bill Muir, who will oversee certain business units worldwide. Muir had been VP of operations Americas, a position awarded to Jace Dees, who will manage Jabil's manufacturing operations in the Americas. Dees was promoted from senior business unit director.
Finally, Jabil elevated Steve Borges to VP of business development. In that role, he will manage business development activities for regionally based customers in the Americas. Borges had served as director of business development for the Americas.
More people on the move...Kevin Melia, a cofounder of MSL, will retire from his role as chairman of the board as of January 2, 2003. He will also leave the board then. Robert Bradshaw, MSL's president and CEO, has been elected the new chairman. The company will record a $1.1-million charge in the current quarter, reflecting severance owed to Melia....Plexus has hired Gordon Bitter as CFO. He had served as CFO of several public companies including Hadco, a PCB fabricator that was acquired by the former Sanmina. Bitter takes over from Tom Sabol, who became COO in July. Also, Plexus has brought in Michael McGuire as VP of sales and business development. Most recently, McGuire was senior VP of sales for Nu Horizons Electronics, a distributor. His background also includes positions at Marshall Industries and Kierluff Electronics....Solectron has appointed Kevin O'Connor as senior VP, worldwide human resources and corporate officer, succeeding Al Cotton, who will retire at the end of the year. O'Connor comes from a semiconductor equipment company, Axcelis Technologies, where he was senior VP of global human resources....Charlie Barnhart, a former VP with Sanmina-SCI, has joined the consulting staff of Technology Forecasters (Alameda, CA), which also does market research....Iris Grable, a veteran of the EMS industry, has joined R&D Systems (San Jose, CA) as VP of business development. The firm provides executive search, consulting and other management services. Grable's 14-plus years of EMS experience include working at the former SCI Systems; the former AVEX Electronics; and IMS (International Manufacturing Services), now part of Celestica. Most recently, she was VP of worldwide manufacturing for Quicknet Technologies, a voice-over-IP company....GES International Limited (GIL of Singapore) has appointed Tan Geh as an executive director, and he will oversee business development for the company. Tan founded and served as CEO of Eltech Electronics Limited, an EMS company that GIL recently took full ownership of after acquiring a controlling interest last year.
Company news...Integrated Microelectronics, Inc. (Laguna, Philippines), an EMS company, and its subsidiary Electronics Assemblies Inc. will merge effective January 1, 2003. The merger allows IMI to create a stronger and more efficient operating model, said IMI, which is a subsidiary of Ayala Corporation.
