Chairman and chief executive officer, Sanmina-SCI Corporation
Born: 1951, in Croatia.
Education: San Jose State University, BS, 1972.
Family: Married Michelle (maiden name unknown); children: three.
Career: Lika Corporation, 1972–1980, various management positions; Sanmina Corporation, 1980–1991, various management positions; 1991–2001, chairman and president; Sanmina-SCI Corporation, 2001–2002, cochairman and CEO; 2002–, chairman and CEO.
Address: Sanmina-SCI Corporation, 2700 North First Street, San Jose, California 95134; http://www.sanmina.com.
■ Jure Sola founded Sanmina Corporation in 1980 for the manufacture of advanced electronic-circuit cards, back planes, and enclosures for the telecommunications market. In 2001 Sanmina completed its acquisition of the competitor SCI, and in 2002 Sola became the chief executive officer and chairman of the newly named Sanmina-SCI Corporation. As of 2004 the merger was the largest ever in the electronic manufacturing services industry. The combined company was a leading global electronics contract manufacturer, building parts and providing manufacturing-management services for original-equipment manufacturers in the communications, industrial and medical instrumentation, and computer-technology sectors.
Born in Croatia, Sola came to the United States as a 17-year-old in 1968. After receiving an engineering degree from San Jose State University, he joined the management of the electronic manufacturing company Lika, producing electronic transducers and control instruments for factory automation. In 1980 he cofounded Sanmina and began serving the company in various management capacities. Sola became chairman and president of Sanmina in 1991.
For most of its history the contract manufacturing business received little respect. Many engineering firms preferred to design products and then let original-equipment manufacturers (OEMs) build the parts. In the 1990s most of the companies that manufactured end products decided to reduce redundant resources and staff by seeking out other firms with which to outsource ongoing production. Sola took advantage of this trend early on to advance Sanmina. Ranked ninth among contract manufacturers in 1997, the company avoided consumer products in order to concentrate on high-end networking and telecommunications applications. Sola stated his business strategy in Electronic Business : "We go after the products that are more difficult to manufacture internally" (August 1, 1998).
Throughout much of its existence Sanmina maintained a 15 percent operating margin, a figure that impressed other contract manufacturers. Sola credited the company's results to the niches that he chose, good management, and a history of closely watched costs. Comparing Sanmina's operations from well after it became profitable to those of its infancy, when the company had almost as much debt as it did revenue, Sola remarked, "We don't run any differently" ( Electronic Business , August 1, 1998).
In the 1990s OEMs and contract manufacturers had begun to operate like identical companies—both had become truly cooperative and integrated. Contract manufacturers like SCI joined OEM design sessions and provided services throughout the supply chain, from designing to box building. SCI was a pioneer in vertical integration, once designing and producing almost everything for the Apollo space project. By the latter part of the 1990s SCI derived most of its revenue from personal computers and government contracts.
In the late 1990s Sola decided that he needed to give Sanmina a more diversified revenue stream by appealing to a broader group of customers; he pursued a friendly merger with the larger SCI. Sola noted, "We built the company to a certain level with niche technology, but we needed to have the fundamentals of system assembly in place" ( Electronic Buyers News , December 17, 2001). Acquiring SCI would result in quicker improvements than would developing such capabilities internally. Sanmina derived more than two-thirds of its revenue from the communications market, which was highly depressed at the time; the substantially cyclical nature of that business as well as high operating leverages made diversification necessary for Sanmina's survival.
In July 2001 Sola and Sanmina took over SCI in a stock swap valued at about $6 billion, making it the largest acquisition in the history of the electronic manufacturing services industry. The merger saved the new Sanmina-SCI about $150–200 million annually through combined operational efficiencies and the internal sourcing of components. The new company operated manufacturing facilities in 23 countries and had annual revenue in the $12 billion range. It was ranked among the five largest electronic manufacturers in the world. Sanmina-SCI generated revenue from communications, highend computing, personal computers, multimedia, and medical/aerospace/industrial sales.
With a technical-sales organization that he now personally deemed the largest in the electronic manufacturing industry, Sola set his sights on Asia, planning to take advantage of the cheaper labor available in China. He explained, "Our approach is winning new-product introductions and designs in Japan, but doing the manufacturing in China" ( Electronic Buyers News , December 10, 2001).
Analysts expressed concerns over Sola's ability to blend the business models of Sanmina and SCI. Sanmina provided high levels of manufacturing technology to clients, while SCI specialized in high-velocity assembly; the two platforms required different customer interactions and pricing strategies. Sola maintained that the potential of the acquisition outweighed the risks.
Ristelhueber, Robert, "Sanmina-SCI Begins to Take Shape as Merger Is Completed," Electronic Buyers News , December 10, 2001, p. 2.
——, "Special Report: Companies to Watch," Electronic Buyers News , December 17, 2001, p. 52.
Roberts, Bill, "The Electronic Business Top 200 Ties That BIND," Electronic Business , August 1, 1998, http://www.reed-electronics.com/eb-mag/article/CA67571?pubdate=8%2F1%2F1998
—Caryn E. Neumann