Intergraph farms out production
In taking over production of workstations and graphics subsystems, SCI will purchase certain Intergraph manufacturing assets.
Computer and electronics manufacturer SCI, also based in Huntsville, said that the 300 Intergraph employees affected will be retained at their current salary and tenure levels. Intergraph said it expects to benefit from the newly reduced headcount, as well as SCI's manufacturing efficiencies and economies of scale.
"This agreement lets Intergraph focus on its core competencies of graphics, workstations, and systems integration," said Intergraph executive vice president Wade Patterson in a statement, "further securing our industry leadership in these areas."
Analysts expressed support for the move. "I think this makes a lot of sense for Intergraph. This allows them to focus on their core strengths while not having to replicate something that another organization can do for them, and do more cost effectively," said Peter ffoulkes, a Dataquest analyst. "This is both good for SCI in strengthening their position as one of the major players and a very positive move for Intergraph."
The sale may have been precipitated by Intergraph's ongoing legal tussles with processor giant Intel in a pending patent infringement lawsuit that has lasted for almost a year. Intergraph cited the suit as having "significantly adversely impacted" its last quarterly earnings statement, when it posted a loss of 43 cents per share.