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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector -- Ignore unavailable to you. Want to Upgrade?

To: rich evans who wrote (1406)	3/27/1998 1:19:00 PM
From: patroller	Read Replies (1) \| Respond to of 2542

Rich you make some good points,so lets talk about margins ,high or low is not that important because the material and labor mix can change depending on the product.It's like this the ecm makes more profit on labor and equipment that it makes on material,everyone pays the same for material and maybe makes 1-1.5% profit on it.So how do each of the companys match up on the labor and equipment side.You got to dig to find out ,but heres a good but not perfect way,just add up the personal and divide the gross profit,thus finding out how much profit per employee.I would bet that it's dam close to the same.So will jabils margins go down ?Yes and no.I would say that jabils mix makes them look like they have big margins when in fact the products they make have less material than some other emc's like sci or slr.Jabils model is to have higher product turns that why they have larger contracts or customers than say flex.Ok lets talk about gateway and how they will impact margins ,this type of biz has higher materail mix and will cause the top line to rise and the bottom line to drop ,while the labor and equipment margins stay the same.Let's stop their and see if you or anyone has a question.patroller