Tellabs to outsource North American manufacturing to Sanmina-SCI

1 August 2003 Naperville, IL Lightwave -- Tellabs will outsource manufacturing of its North American products to Sanmina-SCI, resulting in the layoff of about 325 employees. The manufacturing transition begins immediately, and manufacturing operations in Bolingbrook are expected to cease by year-end.

1 August 2003 Naperville, IL Lightwave -- Tellabs will outsource manufacturing of its North American products to Sanmina-SCI, resulting in the layoff of about 325 employees. The manufacturing transition begins immediately, and manufacturing operations in Bolingbrook are expected to cease by year-end. Tellabs plans to move remaining employees from its main building in Bolingbrook to its Naperville headquarters and sell the 545,000-sq-ft Bolingbrook main building.

"Bolingbrook has been a good place for Tellabs to do business, and while we deeply regret the need to take such a painful action, it's essential to advance Tellabs along the path to profitable growth," said Michael J. Birck, chairman and chief executive officer. "Partnering with a world-class manufacturer such as Sanmina-SCI enables us to intensify Tellabs' focus on taking care of customers and developing the products that telecom service providers need."

Tellabs employees will continue to work directly with customers on ordering, configuration, and shipping of products.

Tellabs expects to benefit from lower manufacturing costs and by freeing capital now tied up in equipment, inventory, and facilities. Since implementing outsourced manufacturing will take through year-end to accomplish, these benefits will be slight in 2003 and are expected to increase in 2004 and beyond. Beginning in the third quarter, Tellabs will record an estimated $90 million to $110 million in charges connected with the outsourcing move.

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