PACE TO OUTSOURCE REMAINDER OF PRODUCTION

THE BOARD of Pace Micro Technology have announced that, as a result of a review of the available manufacturing options, they propose to outsource the remainder of the Group’s production requirements.
Pace already outsources 75 per cent of their manufacturing production and the proposal to outsource the remaining 25 per cent would result in the likely loss of 470 manufacturing and related jobs in the Group’s Saltaire facility in Yorkshire, UK. The Group entered into the statutory 90-day consultation period on May 4. The Board believes that taking these steps will improve product costing and maintain Pace’s competitiveness in their world-wide markets.
The site at Saltaire will continue to expand as Pace’s largest centre of high technology engineering and innovation. In the past twelve months 110 new software engineers, electronics designers and development staff have been recruited to Saltaire, bringing the total non-manufacturing employees there to 670. The Group expects over the next year to build on these numbers by creating a further 150 engineering positions in their locations across the world, 80 of which will be in Saltaire.
Subject to the consultation process, the cost of restructuring is expected to amount to £4.5 million, to cover possible production equipment write-off and redundancy payments. This charge will be taken as an exceptional item in the financial period that closes on June 2 2001. (CD)