IBM outsources NetVista desktop production

IBM Corp. has signed a $5 billion, three-year outsourcing agreement with San Jose, California-based Sanmina-SCI Corp., which will take over most of IBM's NetVista desktop PC line manufacturing operations.

The deal will lower costs and reflects the tech industry's trend toward outsourcing, IBM said. Sanmina-SCI will take over NetVista manufacturing in the U.S. and Europe, acquiring IBM plants, equipment and staff in Research Triangle Park, North Carolina, and Greenock, Scotland. Nine hundred employees in North Carolina and 82 employees in Scotland will be offered jobs with Sanmina-SCI, IBM said. There will be no job cuts associated with the outsourcing, and all employees will be offered jobs at their current salary. "It's the same location, same manager, same plant -- they're just switching badges," said an IBM spokeswoman.

The deal will take effect in February. IBM will retain its NetVista manufacturing operations in Mexico and elsewhere in Latin America, although those operations are under review for future inclusion in the outsourcing deal, according to the spokeswoman. IBM's ThinkPad line of notebook computers are not included in the contract Sanmina-SCI was formed through the recently completed merger of outsourced electronics manufacturers Sanmina Corp. and SCI Systems Inc.

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