Solectron Becomes a Force in `Stealth Manufacturing' --- Contractor Turns Out Products That Get Stamped With Big-Name Labels
MILPITAS, Calif. -- A new breed of American company is arising out of the relentless drive to reach global markets more quickly -- the stealth manufacturer.</br></br>One such company, Solectron Corp., makes computers, printers, cellular phones and other high-tech gear. But you can't buy Solectron-brand merchandise. The famous names stamped on its products, such as International Business Machines Corp., Hewlett-Packard Co. and Cisco Systems Inc., hire it to make major parts.</br></br>Overseas contractors have been doing such work for years. But Solectron's biggest plant isn't in Asia but here in Silicon Valley. More than 5,600 people work for it in California, in jobs that were supposed to have fled the U.S. a decade ago.</br></br>The U.S. contract manufacturers are helping hollow out America's corporations while bolstering its manufacturing base. They land orders because they are considered among the world's most efficient manufacturers, and their proximity is prized because it facilitates quick product development. As a result, electronics manufacturing is thriving in U.S. plants run by contractors such as Solectron, SCI Systems Inc., Jabil Circuit Inc. and Toronto-based Celestica Inc.</br></br>The U.S. contractors are the leaders of a $90 billion global business that is growing about 25% a year, almost twice as fast as the industry they serve. They are so efficient that companies such as H-P, IBM and Texas Instruments Inc. are, in effect, handing over to them their factories.