Production at Elcoteq's Espoo Plant to be Moved to Estonia

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Espoo, Finland — Personnel negotiations at Elcoteq's manufacturing plant in Espoo, Finland, have been concluded.

The subject of the negotiations was the transfer of the plant's production operations from their current premises and the impact of this decision on personnel. Several alternatives to carrying out the move were considered during the negotiation process including the reasons underlying the measures and their effects. The aim was to find a solution that would ensure the competitive efficiency and profitability of this manufacturing operation in the long term. With negotiations now completed, Elcoteq has decided to move production at the Espoo plant to the company's plant in Tallinn, Estonia. The transfer will be undertaken in stages from March until the end of the third quarter 2004. As a result of the transfer, the employment contracts of roughly 170 employees at the Espoo plant will be terminated. The redundancies will take effect in stages, the first notices of redundancy being issued in May at the earliest. All the redundancies are expected to take effect by the end of 2004.All employees made redundant on production or economic grounds will be paid a redundancy salary during the period of notice without any work obligation. They will additionally receive an end-of-employment package amounting to a one-month or two-month salary depending on their length of employment.Elcoteq gained Tellabs International as a customer at the end of last year against tough international competition. The Tellabs plant in Espoo, Finland was transferred to Elcoteq at the end of the year as part of the co-operation agreement. Elcoteq and Tellabs have agreed that Elcoteq will move out of the Tellabs building to other premises during autumn 2004.The Espoo plant manufactures digital optical cross-connection products and broadband access systems for Tellabs International. Moving production to Tallinn is expected to generate clear cost savings for both Elcoteq and Tellabs.

Elcoteq Network Corp. is one of the largest electronics manufacturing services (EMS) companies in the communications technology field. For more information, visit



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