IBM this week continued its cost-cutting campaign,
joining New York Governor Pataki to announce the sale of its Endicott, N.Y.
facility to a local business group.
According to published reports, Endicott Interconnect Technologies, Inc., a newly formed company, will invest $100 million and will acquire the entire IBM Endicott Campus, which
is comprised of numerous facilities totaling 4.1 million square feet.
The state-brockered deal will allow the city of Endicott, which is the
location of IBM's first plant, to retain nearly 2,000 jobs from IBM's
Interconnect Products operations, which will taken over by Endicott
Interconnect Technologies.
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"The economic downturn has hit the global electronics market especially
hard, but this agreement makes clear that New Yorkers know how to turn
adversity into opportunity -- and challenges into success stories," said
Pataki.
Big Blue will sign a 10-year lease agreement for use of 1.4 million square
feet of the campus, approximately half of the site's area.
According to Diana J. Bendz, Senior Location Executive for IBM's Endicott
site, this announcement is a continuation of the restructuring
of the microelectronics business announced on June 4th, when the Division
laid off approximately 1,500 employees and said it would refocus resources
on high-end foundry, ASICs and standard products.
"This agreement is good for the buyers, the employees and our local
community; it retains jobs in our area, while placing these operations in
the hands of buyers who plan to focus on this business," said Bendz.
IBM plans to become a customer of EIT.
As part of the deal, the newly formed technology group is eligible to apply
to for over $5 million in capital grants and benefits through government
programs.
In a separate cost-cutting measure announced today, IBM officials say they
are selling the assets of their Mylex Business Unit to Milpitas, Calif.-based
LSI Logic.
While financial terms weren't disclosed, the cash transaction is anticipated
to close during LSI Logic's third quarter ending September 30 and is
expected to be accretive to LSI Logic earnings.
As a result of this transaction, LSI Logic Storage Systems, Inc. and LSI
Logic's Storage Components Group will acquire the Mylex business unit's RAID
(Redundant Array of Independent Disks) controllers, subsystems, hardware and
software technologies.
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