Mu gut is this is a great strategic move for UNS. The co. has its hands full with the development of the products. Once the product is designed and perfected why not pass it to somebody who can do it better for less. UNS is spread too thin to do everything. They should be like Apple where they control the design and the customer but lets the assembly be handled by somebody else who can do it cheaper and faster. Flex specializes in this field, while UNS is learning on the job. Whereas I do not have details of the agreement, my guy says this will reduce the capital demands for UNS and maintain margins. Thus increasing liquidity which has been a concern. Also given UNS's size it doesn't necessarily have the bandwidth to hire and train manufacturing employees while doing the development. They always have the ability to bring this back in-house if necessary but US labor costs are far higher than Flex's international locations. As things currently stand the US is not nearly as business friendly as yesteryears, besides the co. always has the ability to bring manufacturing back (unlikely iiIMHO) when their finances permit.
Time will tell but all in all I am happy with this move.
As usual my 2 cents
UNS Price at posting:
60.0¢ Sentiment: Buy Disclosure: Held
