© ljupco-smokovski-dreamstime.com Electronics Production | November 21, 2013
SGI to sell plant to Jabil Circuit
Jabil and SGI has agreed to the principal terms under which Jabil will serve as SGI's primary manufacturing services and supply chain management provider.
The transition to Jabil will be implemented as a "manage in place" model, which utilizes existing SGI facilities and personnel. Jabil will purchase SGI's primary manufacturing facility, located in Chippewa Falls, Wisconsin, and certain other manufacturing assets for approximately USD 6 million in cash. SGI expects that approximately 130 of its manufacturing personnel in Chippewa Falls will transfer to Jabil. No other workforce transfers or reductions are contemplated as a result of the transactions, which are expected to close in February 2014. Jorge Titinger, president and CEO of SGI, said, "We expect significant benefits to SGI and our customers as a result of this relationship, including a more variable cost structure, greater flexibility to respond to changes in volumes or customer requirements, shorter cycle times for certain products, and enhanced quality management. As a world-class supply chain partner, Jabil has extensive experience in system-level assembly and testing of compute and storage products and is able to meet the unique sourcing and technical requirements of both our government and commercial customers." James Luginbill, Jabil vice president, global business units, said, "We look forward to working with SGI to meet their supply chain needs. The capabilities of the SGI people joining the Jabil team will be instrumental in meeting SGI's ongoing needs and the needs of other potential high performance computing customers."