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Nortel has currently around 1,250 employees in Monkstown. The 30 employees that work on systems integration, configuration and testing services of defence message system (DMS) products, will be transferred to C-MAC Northern Ireland. The remainder of Nortel's Northern Ireland employees will be unaffected by the deal. The number of employees that will be transferred to C-MAC at the company's systems house in Research Triangle Park, North Carolina was not available at the time of going to press.
The two Canadian companies are now working on a transition plan. The final details of the agreement and a closure date for the deal are expected to emerge before the end of this year. No financial details of Thursday's agreement were available.
According to Nortel, the Monkstown systems house remains a centre of excellence for the integration and testing of metro optical and optical long haul networking solutions.
"The systems houses in Research Triangle Park and Monkstown remain cornerstones of the company's virtual manufacturing strategy," said the company in a statement.
"Nortel and C-MAC have a long-term relationship of cooperation," Nortel spokesman David Silke said. "The sale should be seen as part of Nortel's strategy to focus on its core activities." Those activities include the rapid introduction, integration and testing of advanced network solutions.
The sale comes on the back of Wednesday's announcement that Nortel has decided to cut 10,000 jobs worldwide. Another 10,000 jobs will be shed through divestitures, like the sale of the plants in Monkstown and North Carolina.
Silke said that he could not give a regional breakdown of the job cuts. "That will be announced on October 31," he said. Nortel's worldwide workforce was estimated at 94,500 in January, but it is expected that this figure will sink to 45,000 in the next few months. Nortel's workforce in Northern Ireland has already shrunk from 2,400 to its current level of 1,250. The company currently employs 600 people in Galway, Dublin and Shannon.
As part of the company's strategy to streamline costs and to focus on core activities, it is spending less on investment in plants, equipment and inventories and has lowered the ratio of fixed cost to variable costs. The company also says that the strategy has enabled it to respond quickly to changing market needs.
On Wednesday, Nortel reported an expected loss of USD3.6 billion for the third quarter, which comes down to USD1.13 per share.
According to reports Nortel's new strategy will not see it enter into any merger agreements in the months ahead. "Our focus is not on merging with another company," newly named chief executive officer Frank Dunn said, according to a Reuters report. He added, "What we have coming into the marketplace is a compelling leading-edge capability and we will demonstrate that in the months and quarters to come."
On Tuesday Nortel named Dunn as its chief executive officer. He will take over from John Roth on 01 November.
Nortel Networks is one of the world's largest manufacturers of networking and communications equipment and infrastructure for service providers and corporations. C-MAC employs 9,000 worldwide. Its main line of business is the design and production of integrated electronic manufacturing solutions, from components to full systems.
On Wednesday Nortel closed at USD5.54 in New York, down from its 52-week high of USD70. C-MAC closed at USD31.90, in New York on Wednesday, down from its 52-week high of USD113.50.
For more info: http://www.nortelnetworks.com and http://www.cmac.com.
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