Nortel to save USD2 billion by divesting manufacturing assets

Canadian equipment vendor Nortel Networks has announced it is looking to sell off its remaining manufacturing assets, making annualised savings of up to USD2 billion, in order to focus upon the development of new technologies and products. Like many of its rivals, Nortel Networks has been hit hard by the effects of a downturn in spending in the aftermath of the telecoms crash. Yesterday it said it was in negotiations to offload its five remaining plants to Singapore-based Flextronics International for a minimum of USD500 million, having already sold around three quarters of its manufacturing operations since 1999. The deal, which forms the final part of Nortel’s move to outsource its manufacturing operations, will see the Singapore electronics group assume more than USD2 billion worth of Nortel’s annual sales costs.