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Electronics Production | September 03, 2009

Molex ends discussions with potential buyer in France

Molex has announced that discussions have ended with a private equity firm identified by the French government regarding the potential reindustrialization of Molex's manufacturing facility at Villemur-sur-Tarn, France.

The French government has said that it fully supports all reindustrialization efforts for the site, but has been unable to find a suitable buyer for the operations and did not offer any financial guarantees. In this case, the potential buyer expected Molex to fund a social plan for the employees, pay for all operating losses for the foreseeable future, provide a long-term supply agreement and sell the business for a nominal amount. This is not a business plan that would provide any kind of a future for the Villemur employees. In particular, Molex expressed concern that the private equity firm did not appear to have a business plan for the Villemur plant and its employees, and was unwilling to make the necessary capital investments to ensure the site would operate independently from Molex in the future. In the recent months, Molex has been very clear that it can no longer adequately conduct business at the Villemur site. Over the past 10 months, Molex has conducted several discussions regarding the reindustrialization of the Villemur site, but has not yet received any viable proposals. Molex is surprised that the French government has threatened a boycott. Since making the business decision to close Villemur-sur-Tarn, the company's first priority has been a social plan for employees. A boycott of Molex products would endanger that plan and undermine the mediation process that both Molex and the French government have agreed is in the best interest of the employees.
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