Lucent plans manufacturing sell-off

Lucent plans to sell off or outsource the majority of its manufacturing facilities to third party contractors over the next 18 to 24 months.

The news comes two weeks after a similar announcement by rival Nortel which has signed a $10bn four year deal with independent manufacturer Solectron, which also involves the transfer of 4,200 staff worldwide.

Lucent will continue high-end process manufacturing of semiconductor, optoelectronic and fibre optic components, but will outsource sub-assembling and the creation of piece parts such as circuit boards and electronics.

The telecoms equipment giant also plans to turn many of its existing manufacturing plants into systems integration and testing facilities for carrier equipement. Lucent's soon to be spun-off new enterprise networks arm is also expected to make similar arrangements with contract suppliers but no specific details were announced.

A company spokeswoman said: "Today around 20 per cent of manufacturing is done by contract partners. The plan is to triple this number over the next 18 to 24 months."

She would not comment on whether staff cuts would be made, but said the company hopes a significant proportion of employees will be retained by contract partners.

Lucent employs more than 30,000 manufacturing staff in 17 US locations and plans to keep about 12,000 personnel in five high-end process manufacturing facilities. It also expects to retain staff for the system integration houses. No jobs or plants in Europe will be affected, said the spokeswoman.

At the beginning of April Nortel announced plans to sell off a number of its global operations to Solectron. In Europe Solectron will acquire Nortel's printed circuit board manufacturing site in Belfast, which will be relocated elsewhere in Northern Ireland, a repair centre in Cwmcarn, Wales, and operations in France.

On a smaller scale, Cabletron announced earlier this year its intention to sell its manufacturing and repair plants in Ireland and the US to FlextronicsInternational for $100m.