Nortel Networks insists Ireland will remain an important part of the company despite plans to sell its manufacturing operation in Belfast.
The Canadian telecommunications equipment maker yesterday announced plans to dispose of its remaining manufacturing operations to concentrate on the introduction of new products and the deployment, integration and support of complex multi-technology network solutions.
The company, which employs 720 people at its operation in Monkstown on the outskirts of Belfast, said it was in discussion with Singapore-based electronics manufacturer Flextronics regarding the possible sell-off.
Nortel has been getting out of manufacturing in recent years as it struggled to cope with a sharp industry downturn that saw employee numbers slashed in its Irish operations. The group employed 2,000 people in Belfast four years ago.
Of the current complement of 720, about 350 would be affected by any change in the status of the manufacturing operation. The rest are engaged in research and development, operations management and supply chain functions.
Nortel also employs 25 people in a sales and account management unit in Dublin and 300 in Galway, predominantly in R&D. Neither location will be affected by the current discussions.
If the talks succeed, Flextronics will assume responsibility for more than $2 billion (€1.6 billion) of Nortel's cost of sales. Nortel would transfer manufacturing and inventory assets worth more than $500 million to Flextronics, receiving that money in cash over a nine-month period.
Nortel's president of global operations, Mr Chahram Bolouri, said Flextronics had the capabilities to meet Nortel's objectives.
"It also has substantial resources and presence in many of the countries where we do business. At the same time, divesting the remaining parts of our manufacturing operations would enable us to focus on the core capabilities required to deliver converged networks to our customers."
Flextronics already has a unit in Ireland, although it too has been cutting jobs in recent times as customers switched to cheaper, Far East suppliers. A spokesman for Nortel last night cautioned that yesterday's announcement was merely a statement of intent and there was no guarantee that the talks with Flextronics would succeed.
"Irrespective of this announcement, Ireland and Belfast will continue to be an integral part of Nortel's European operations," he said. He said the Monkstown plant was the European R&D facility for optical networks.
In a statement, Flextronics chief executive Mr Michael Marks said: "The proposed transaction would solidify Flextronics as the leader in the infrastructure market."
