Word: ericsson
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...talk to one another, known as Bluetooth and IEEE 802.11b or, more popularly, Wi-Fi. Both connect gadgets cheaply by accessing a swath of free radio spectrum over which to exchange digital data. Bluetooth, named for a Viking king (one of its original backers is Sweden's Ericsson) and supported by some 2,500 companies that constitute the Bluetooth Special Interest Group, is basically a substitute for all those cables you now use to link peripheral devices, such as PDAs and printers, to other computerized devices. Chips up to 30 ft. apart built on the new standard can exchange...
Then providence intervened. Swedish telecom giant Ericsson decided that it had become too costly to produce all its wireless switching equipment and, after researching Silicon Valley's contract manufacturers, awarded a $300 million deal to Flextronics (whose revenues at the time were only $400 million). "That launched us in Europe almost overnight," says Marks. "There was no other contract manufacturing going on there, so we were able to move very quickly with other acquisitions...
Last December Ericsson's top brass threw a 50th-birthday dinner for Marks at the tony Stallmastaregarden restaurant in Stockholm. While thanking his hosts and lauding their partnership, Marks launched into a bold new pitch: What Ericsson really ought to do, he said, was jettison all its mobile-phone operations. The next morning he made a formal proposal. Ten days later, Ericsson agreed to get out of the cell phone-manufacturing business. "It turns out that, increasingly, companies want not just a supplier but someone to run a part of their business for them," says Marks. "The Ericsson deal...
Flextronics' most sophisticated operations, which manufacture routers for Cisco and wireless base stations for Ericsson, are based in places like Silicon Valley and Sweden, where top talent is available. Its most labor-intensive operations are still in China, where Flextronics mostly makes comparatively simple electronic products, from PC parts for Dell and mouse assemblies for Microsoft to cell phones for Nokia, Motorola and Ericsson...
...drumbeat of bad news on the job front in Europe. Just last month, the Swiss engineering firm ABB announced 12,000 layoffs, 8% of the company's workforce. Infineon, Europe's second-largest chipmaker, said it is downsizing 5,000 workers because of a slowdown in the electronics sector. Ericsson, Sweden's big telecom equipment provider, said it would stop making mobile phones - a decision that will put 2,600 out of work in southern Sweden. In fact, in just a single week in late July, European companies announced a total of 30,000 layoffs. Stock markets across the Continent...