Motorola enters alliance with Celestica, cuts jobs

About 1,320 Motorola Inc. employees will lose their jobs because of a US$1 billion manufacturing alliance with Canada’s Celestica Inc. aimed at outsourcing the manufacture of some cellular phone handsets, messaging devices, two-way radio products and accessories, Motorola announced Wednesday.

Under the agreement, with Celestica, an electronics manufacturing services company, Motorola will sell its manufacturing operations in Dublin and Mt. Pleasant, Iowa, to Celestica for about $70 million, subject to post-closing adjustments, the company said in a written statement. The agreement is expected to close in the first quarter of 2001. Celestica will continue manufacturing some Motorola products for at least three years at the Mt. Pleasant facility and for two years in Dublin.

Motorola’s Boynton Beach, Fla., manufacturing facility will be converted to concentrate on software applications, product design activities and administrative support.

The consolidation will eliminate about 2,870 positions at Motorola out of its total workforce of 130,000, the company said. Celestica, which is based in Toronto, will offer positions to about 650 of the 1,400 employees losing their jobs in Dublin and 550 of the 670 employees in Mt. Pleasant. Of the 800 employees eliminated in Boynton Beach, 350 will be eligible to transfer to other Motorola facilities in the United States.

Motorola said the agreement is part of a long-term strategy to consolidate manufacturing and improve the supply chain and financial performance. The company estimates the value of the Celestica agreement at $1 billion over three years.

Motorola, in Schaumburg, Ill., can be reached at Celestica is at