I have to say, I didn’t think Jure Sola would or could last this long. The cofounder of Sanmina, Sola was one of the poster boys for wanton M&A excess, snatching up more than a dozen companies or OEM plants during the late 1990s and early 2000s. The spree culminated in the purchase of SCI Systems in mid 2001, a $6 billion deal that saddled the company with so much debt, when the ensuring tech collapse occurred, it was forced to take 20 straight quarters of “one-time” charges.
Most execs couldn’t have survived such a bloodletting. Sola wasn’t most execs, however. He continued to place his bets on fabricating in the US — in a memorable line, he told an IPC Printed Circuit Expo audience that “plating was in his blood” — and Sanmina remains the second (or third) largest board supplier in North America. Moreover, he correctly swung to the military and aerospace markets, eschewing the PCs that SCI was so dominant in.
Today the company is half the size in revenue of its peak, but consistently profitable.
Come October Sola will ride off into the sunset with his legacy intact, perhaps not the most beloved man to run a major PCB company, but a success nonetheless. In this era, that’s no small thing.
Those familiar with their Sanmina-SCI history might recall the name Milan Mandari?. Mandari? cofounded the firm along with Jure Sola in 1980.
Sola, of course, remains in charge. For his part, Mandari? moved to England, bought a soccer team, and continued to invest in new businesses.
Perhaps he should have stayed in PCBs. Mandari? is currently on trial, charged with making bribes in order to avoid business transaction taxes. (He denies the charges.)
Sanmina-SCI’s model hasn’t been, shall we say, ideal over the years.
The company, which pre-2000 was considered one of the best-run PWB and EMS companies around, got caught up in the M&A fever, buying SCI and Hadco, and since has struggled to stay profitable even in industry upswings. More often than not, Sanmina has had to take restructuring costs as it tries to rationalize its capacity.
So it was interesting when, during its fiscal third-quarter analysts conference call (on which it announced another $16 million to $18 million in restructuring costs), chairman and chief executive Jure Sola described how the company plans to fill its unused printed circuit board capacity.
As PCD&F reported earlier this week, Sanmina’s printed circuit board fabrication plants in Asia are at 85% to 90% capacity, while in North America one plant (San Jose*) is over 90% and another (Owego, NY**) is at 55% to 60%.
Sola’s take is that the company needs to compete on technology, not labor. But a leading PWB analyst and friend told me yesterday the market has become one in which volume alone will decide the winners.
Sanmina’s PCB sales are likely to near $400 million this year, which is up significantly from 2009 but still far behind the industry’s biggest players. If my friend is right, it suggests Sanmina, again, will be left in the cold.
**I also think.