IBM Hires Contractor For Desktop PC ManufacturingIBM Hires Contractor For Desktop PC Manufacturing

In an effort to cut costs, IBM handed its U.S. desktop PC manufacturing to a contractor. The company last week said it awarded a $5 billion, three-year outsourcing contract to Sanmina-SCI. As part of the agreement, the San Jose, Calif., company will buy an IBM computer factory in Research Triangle Park, N.C., that builds IBM NetVista PCs for the U.S. and Canadian markets. Sanmina-SCI also will take over PC manufacturing for Europe, the Middle East, and Africa that's now done by a contractor in Scotland. IBM (IBM--NYSE) plans to continue designing and marketing the NetVista line and will continue to manufacture ThinkPad notebook computers in-house. The company is vowing not to exit the PC market entirely and says that business customers still want a full range of computing products from one source.