Lucent became Avaya, which will now become Celestica. Aside from the highly esoteric names, what's going on here?
Avaya employees, who were recently spun off of Lucent Technologies, will soon be sporting Celestica company shirts and mugs. The Canadian company signed an agreement to acquire Avaya's telecom equipment manufacturing facilities in Colorado and Little Rock, Ark. The deal is valued at $200 million.
According to Avaya, the sale will reduce company inventories, fixed costs and capital expenditures, while allowing it to continue to invest in next-generation enterprise solutions and services, the company said. Avaya is following something of an industry trend by farming out equipment production -companies believe they can then focus more on R & D.
"Avaya's move to contract manufacturing with Celestica, an industry leader in electronic manufacturing services, ensures that our customers will continue to enjoy the quality and reliability of our traditional flagship products, said Don Peterson, Avaya president and CEO.
"At the same time, it allows us greater flexibility and focus on designing and developing the next generation of enterprise solutions and services such as converged voice and data networks, customer relationship management and unified communications."
Currently, the 1,000-plus employees at the Westminster, Colo. plant will remain employed, as will approximately 320 in the Little Rock area, becoming Celestica employees when the deal closes in phases in 3Q 2001.