IBM outsources more manufacturing

IBM has signed a three-year, $3.6bn (£2.2bn) agreement to outsource the manufacture of some of its servers and PCs to Sanmina-SCI.

It is IBM's second deal with the manufacturer, which already produces the firm's NetVista desktop PCs.

As part of the outsourcing deal IBM employees in Greenock, Scotland, will be transferred to jobs with Sanmina-SCI or Solectron.

IBM is outsourcing the manufacture of its low- and mid-range eServer and xServer, as well as its IntelliStation workstations, as part of a shake-up in its supply chain. It said the move was to cut costs as it focuses on software and services.

After months of uncertainty, IBM's Greenock staff were relieved to have the threat of redundancy lifted, their trade union representative said.

"Our members are happy that they still have work to do," Amicus regional secretary, Danny Carrigan, told BBC Scotland.

"But they are unhappy that IBM are disposing of them as employees, raising fears over terms and conditions of employment and pensions."

In a statement Bob Moffat, senior vice president and group executive, Integrated Supply Chain, IBM, said: "These agreements allow us to focus our investments on designing and engineering a full line of Intel-based products and services for our customers."

The deal is expected to close next month.