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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: P. Ramamoorthy who wrote (25685)	11/17/2002 8:00:35 PM
From: Tickertype	Read Replies (1) \| Respond to of 27311

You make some good points, Ram. I'm always disappointed in the questions we get on the cc's, or I should say the lack of good questions. For example, I'd like to know if they did achieve the 5 mm whr/month goal they had for last summer. Nobody asked and Stephan didn't say. I also wonder how things are going with the two other Asian licensees who were gearing up to produce smaller format stacked batteries, not including Fengfan I mean. And I'd sure like to have the Hanil situation cleared up once and for all, meaning are they still intending to produce batteries or have they closed their doors as some posted rumors claim? As for the stock remaining listed, I heard recently on the news that Nasdaq was considering lowering the stock price requirement to something below $1, apparently because so many stocks have now been delisted that the Naz is in danger of becoming extinct (I'm exaggerating a little of course, but I believe about 40% of the Nasdaq listed stocks have now dropped off the index). But if Valence gets just one decent PO from a tier 1 customer, this isn't likely to be a concern anymore. - T -

To: P. Ramamoorthy who wrote (25685)	11/18/2002 12:23:03 AM
From: Larry Brubaker	Read Replies (2) \| Respond to of 27311

<<Stephan and Kevin seem to be following a cost-efficient plan (low-cost manufacturing strategy) for VLNC products, viz. Mexican assembly plant for N-Charge, JV with FengFan in China.>> I don't understand how it is cost-efficient to spend literally hundreds of millions of dollars to build and outfit a manufacturing facility in NI, and then contract for manufacturing in Mexico or China. Does this mean that all those $10's of millions spent in NI were wasted because it is more "cost efficient" to pay someone else to build the product in Mexico? Does it mean that after all the money spent on various generations of "automated" and "fully-automated high speed" production machinery, the problems of automated mass production were never really solved and so they are resorting to hand assembly with low-cost labor in Mexico and China? Seems to me that if they really had solved the "fully-automated high speed production" problem, they would be far better off building the product at the plant they already paid for, using equipment they already paid for. Labor costs should be relatively minor if production is "fully-automated", shouldn't they? Since they are apparently pursuing other production options, it strongly suggests to me that "fully automated high speed production" has been finally abandoned. The fact that they wrote down much of the value of their plant, property, and equipment in February also supports this theory. If so, what does that do to potential gross margins, if they have to pay somebody else to hand-manufacture the product, rather than producing the product themselves on fully-paid for, fully-automated equipment? Maybe the answers to these questions has something to do with why the stock has lost 3/4ths of its remaining value since the February write-downs, even considering last week's runup.