Celestica lands $1 billion contract (April 18, 2001)

Toronto-based electronics manufacturer Celestica Inc. has secured a three-year contract to manufacture cellular phones, pagers and two-way radios for Motorola Inc. The supply contract is worth about $1 billion.

The terms of the contract call for Celestica to buy Motorola factories in Iowa and Ireland for $70 million and manufacture these products at the facilities. The acquisition is expected to close by the end of the first quarter of 2001.

Motorola has been outsourcing more electronics assembly as part of its revamped strategic business plan. Last May Motorola awarded a $30-billion contract to Flextronics International Ltd., a global electronics maker based in Singapore.

Earlier in the year Celestica announced a $1.5 billion deal with IBM and a $1.2 billion contract with NEC Corp. Analysts expect outsourcing of information technology manufacturing to double to $500 billion by 2003, from $250 billion in 1998.