Outsourcing option could save Ericsson's UK plants

23 May 2001
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24 May 2001 | Robin Parker

The threatened UK manufacturing plants of mobile telephone company Ericsson could get a reprieve if the local management team is successful in promoting its services as an outsourcing supplier.

"We need to determine whether it is feasible for us to generate our own workbook and set up a new firm for other companies that have overcapacity," Yvonne Duchar, contracts buyer for Ericsson, told SM. "With the tight timescale, we are only looking in our own sector, although there is a feeling that we could diversify if we had the work."

The only realistic alternative to sub-contracted outsourcing was to find a private buyer, Duchar added. A single buyer for the plants was unlikely, but separate private buyers could purchase the sites, she said.

The Swedish parent group recently announced its Worksop and Scunthorpe plants are likely to close in September with the loss of 1,200 jobs as part of a plan to save £1.4 billion a year.

The UK team has so far sent out 1,800 flyers promoting the facilities to electronics and design businesses across the country. The notices highlight the creation of two new outsourcing units focusing on electronic contract manufacturing and industrialisation.

Production of Ericsson's mobile telephones is to be outsourced to Flextronics in Singapore. Duchar told SM that a definite date for a handover has yet to be confirmed. Singapore newspapers recently suggested that in an effort to cut its costs, Flextronics may in turn move its manufacturing operations to China and Malaysia.

Until now, the sites have been dedicated to the manufacture, customisation and distribution of Ericsson's products. The four plants house, among other functions, test and assembly facilities.

SMmay2001

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