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Electronics Production | April 26, 2007

Elcoteq Closes Juarez Plant

As part of its action plan to restore the company's profitability and competitiveness, Elcoteq has decided to rationalize its manufacturing capacity in Mexico.
The plan is to close down the manufacturing facility in Juarez, Mexico and to move its production mainly to China and partly to Elcoteq's other Mexican facility by the end of 2007. Production transfer will take place so that all existing projects in Juarez will be completed as planned and new projects will be ramped up in China and Monterrey, Mexico. The closure of the plant will create one-time costs totaling 9 million euros.

In addition to the rationalization activities in Mexico, geographical area Americas will relocate its Irving, Texas office to the NPI center in Dallas.

Elcoteq manufactures set-top boxes and communications networks products at its Juarez plant. Elcoteq started operations in Juarez at the beginning of 2005 after signing a multi-year manufacturing agreement with Thomson at the end of 2004. The agreement also included the acquisition of the operations of Thomson's Juarez plant. The size of the plant is 13,700 square meters. At the end of March, the plant employed approximately 2,300 people.

After the closure of the Juarez facility, Elcoteq will have two manufacturing plants in the Americas: one in Monterrey, Mexico and another in Manaus, Brazil. In addition to these locations, Elcoteq has its Americas' head office and an NPI center in Dallas, USA. At the end of March, these units employed approximately 5,000 people.

"Elcoteq's consistent processes and global service network enable transfer of production from one continent to another. Juarez is not just about transferring production - we are talking about utilizing our global service network efficiently to meet our customers' requirements and demand," says COO Jukka Jäämaa. "Although we have recently put more emphasis on developing and expanding our operations in Asia-Pacific, Americas continues to have a vital role in our global footprint. Our Monterrey facility's long and extensive experience of working with different customers and manufacturing a variety of products complements customer demand in the Americas extremely well, and therefore we want to consolidate our Mexican operations in Monterrey," continues Mr. Jäämaa.

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