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Rich Heimsch Electronics Production | June 05, 2007

A Flex flex: Acquiring Solectron

In a business that's so much about scale, a move like this makes textbook sense. And the fact that Solectron never came out of their tailspin that began in 2001 makes it no surprise this would be the next step in their history.

Mike MacNamara believes he can add 15% to Flexronics' earnings as a result of this move, and why not? But it's inevitably about execution. While Flextronics' history has been arguably the best in the EMS industry at absorbing acquisitions successfully, none previously were anything of this scope. Many of those successes, according to past comments by Mike (and Marks before him) were strongly aided by consciously good cultural fits. One would have to doubt that's a significant factor this time around, but the huge operational redundancy that results, reminiscent of HP/Compaq a few years ago, is a fantastic cost savings opportunity in another low margin business that has already wrung a lot out of its supply chain. Maintaining customer satisfaction during acquisition transitions is always a critical issue, but in this industry satisfaction levels are frankly so low I'm sure it's one that Flex can readily handle. Written by: Rich Heimsch, Protean Marketing Communication Click Here to Read More Materials from Rich Heimsch on his Protean Blog Spot.
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