Highest Official: Dr. Ko Nishimura, Chief Executive Officer
Public Affairs Contact: Michael E. Donner, Director, Corporate Communications, (408) 956-6688
E-mail: michaeldonner@ca.slr.com

Headquartered in Milpitas, Calif., Solectron Corporation is a worldwide provider of electronics design and manufacturing services to original equipment manufacturers. Solectron offers a broad range of design, manufacturing and support solutions including product design and development, materials management, printed circuit board assembly, systems build, field upgrade, and product updates.

Founded in 1977, Solectron is a publicly-held company with revenues of $3.7 billion in fiscal year 1997. Solectron has 17 locations and more than 18,000 employees worldwide. In addition to Milpitas, other U.S. sites include Charlotte, N.C.; Everett, Wash.; Austin, Texas; and Westborough, Mass. Overseas sites include Dunfermline, Scotland; Bordeaux, France; Herrenberg, Germany; Guadalajara, Mexico; Sao Paulo, Brazil; Penang and Johor, Malaysia; Suzhou, China; and Tokyo, Japan.

Solectron also won a Baldrige Award in 1991, the first company to win twice, demonstrating how Baldrige winners continue to use the Award's criteria to achieve performance excellence. In addition, Solectron has won state quality awards in California, North Carolina, and Texas. Solectron Penang has won quality awards in Malaysia, including the Prime Minister's Quality Award.

Quality and Business Performance Achievements:

• Solectron's quality and performance management strength is reflected in key measures of financial performance, such as revenue growth and earnings per share which show substantial growth since 1991. Revenue growth has averaged well above the company's goal of 25 percent annually and the industry average annual growth rate of 10 percent. As a result, Solectron's market share has doubled since 1992. In addition, over the past six years, Solectron's stock performance has significantly outpaced its largest competitor and the S&P 500. Solectron stock has grown 60 times since its initial public offering.

• For over five years, Solectron has tracked customer satisfaction on a weekly basis with scores for delivery, quality, and service at or nearing the 90 percent satisfaction level with an 80 percent to 90 percent survey response rate. The level of satisfaction is particularly noteworthy given the stringent rating scale in which a "C" receives a score of 0 and a "D" receives a score of minus 100. Customer loyalty to Solectron is reflected in a 600 percent increase in contract spending levels from 1992 to 1996 by its eleven long-term key customers. In addition, Solectron has received more than 140 recognition awards from its customers since 1981.

• The annual OSHA-reportable incident rate was less than 1 during 1996, well below the U.S. average of 8 per year and the industry's average of 2.8.

• As Solectron has grown and acquired new sites, the compatibility of the work culture at new sites is an important selection factor. Solectron retains at least 85 percent of the acquired sites' management and work force employees along with its local customs and traditions.

• At Solectron, social responsibility is a foundation for its improvement efforts. The company has reduced hazardous wastes and chemical emissions and now recycles 94 percent of materials. Because of its proactive approach, Solectron facilities in California, Texas, France, and Malaysia received local awards and recognition for environmental responsibility.

• The quality of supplied parts is critical to Solectron, accounting for over 75 percent of total revenues. Supplier defects resulting in materials being pulled from the manufacturing line are 7 parts per million (ppm), substantially better than the industry average of 100 ppm and the top 25 percent of competitors which average 60 ppm.

• To achieve excellence in the extremely fast-paced and fast-growing electronics manufacturing service market, Solectron uses an integrated and systematic approach to planning and plan execution which includes long range and annual operating planning, Hoshin (annual improvement) planning, the Solectron Total Quality Excellence Award (modeled after the Baldrige Award), and a seven-step continuous improvement process. In addition, Solectron uses worldwide councils to standardize quality, materials, technology, operations, finance, human resources, and transfer of best practices from one site to another around the world.

• Solectron's variable compensation plan, which extends to all members of the work force, provides a systematic and balanced approach for managing common centralized initiatives while enabling site managers to operate their businesses as entrepreneurs. Employee payout is based on individual, team, site, and corporate performance in the areas of revenue, profit, customer satisfaction, and operational performance. Progress is measured against quarterly goals on a daily and weekly basis. Solectron's 3,000 temporary contract employees also share in variable pay and award programs through their respective employment agencies.

• Solectron University, established in 1990, drives management and employee skill development, supporting Solectron's philosophy to "hire for traits - train for skills." Training is segmented into six core development areas - technical/operations, technology/engineering, management development and leadership, personal/developmental training, sales and customer service, and educational alliances and partnerships.