Allen EDC Retains 500 Jobs

By Ashley Alber
Inside Collin County Business


Incentives prolong Sanmina's stay in Allen

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July 18, 2007

Sanmina S-C-I has been a strong contributor to the City of Allen since January 2003. Its has doubled its employee base from 200 to over 525 in the past three years, sponsored an engineering internship program for high school students in Allen and is involved with the chamber of commerce. Therefore, when Sanmina’s lease came up for renewal with a substantial price increase, the San Jose, CA-based company began looking at other options, including relocating out of Allen.

“We assisted them when it came time for their lease renewal,” said Jennifer Grimm, marketing director for the Allen Economic Development Corporation (AEDC). “We were able to help narrow that gap and save about 500 jobs.”

The AEDC does both business retention and expansion with businesses throughout the community. Typically, there is an incentive package from the EDC and then tax abatements from local entities.

“They have been a good community-minded company here in Allen, not to mention they are a very high-tech, highly skilled employer in this city,” said Robert Winningham, executive director for AEDC. Sanmina gave its first indication of possibly leaving Allen when it began looking at other options during a business retention and expansion visit.

“That is when Frank O’Reilly, vice president of operations and business development of Sanmina, and I got together and really worked the deal,” Winningham said. “The board stepped up, as they always do, and said, ‘we want to keep this business here and not only that, but help them expand.’

Because of the financial assistance from the EDC, Sanmina, is not only remaining in Allen, but it is also expanding with new products and technology. Sanmina’s investment in a clean room, where various types of microelectronics are created and built, costs $1 million. The equipment and machinery costs the company an addition $1 million as well.

“Microelectronics is the new business we’re bringing in here and this is all made in a clean room environment. We’ve starting building triplexers which go inside a g-pon (gigabit passive optical network). A triplexer takes your phone, computer and TV and splits it. This triplexer is extremely small and brings in a clear signal so you can communicate and bring in information at the speed of light,” O’Reilly said.

Sanmina is currently manufacturing approximately 100,000 triplexers each month as the demand for fiber to the home quickly increases. The manufacturing of a triplexer and assembling it into a GPON is new technology and can only be transmitted through fiber. Fiber to the home enables this high-speed signal transmission where most homes still rely on copper.

“You really need to use fiber because it’s so much faster, whereas copper can sometimes create a distorted picture on your TV. This is because copper cannot pass the signal as fast as the speed of light, so the picture will sometimes appear delayed or choppy,” O’Reilly said.

Sanmina plans to create anywhere from 60 to 100 new jobs manufacturing micro-electronics if the contracts it is currently working on pan out within the next eight months.

“As you can see, we’re dealing with new expenses by taking off with new business such as microelectronics. But if our lease rates start increasing, our overhead increases; if our overhead increases, then our costs go up. Now we’d be introducing a new product that immediately has a high dollar amount,” O’Reilly said.

Although completely unexpected, O’Reilly credits the AEDC in allowing them to make the decision to stay in Allen.

“Many people may not realize that Sanmina is bringing a ton of business to Allen. Next week, 85 percent of the hotels across the street from us will be occupied by people coming to Sanmina. We bring in people from China, Vietnam, parts of Europe and all over the world. They’re filling up the hotels here and also the restaurants,” O’Reilly said.

Sanmina has also started a program that is partnered through the Allen school district, allowing several high school seniors to work side by side with an electrical engineer.

“These kids aren’t doing the design work, obviously, but they’re really contributing to the end result by seeing how it’s all developed. And it’s great because kids are realizing if they truly want to go into engineering without wasting years and money in college before figuring it out,” O’Reilly said.

Sanmina plans to continue the internship program with the Allen school district, eventually expanding to allow more students to participate.

“As long as the program is contributing to the kids, it’s a good thing. We want it to be a meaningful program that is more beneficial for the kids and the school rather than the company,” O’Reilly said.

With the funds now in place from the AEDC, Sanmina plans to remain a prominent contributor in Allen.

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