After a year of negotiating, Puget Plastics took a leap of faith and set up an injection molding facility in one of its customer's plants last month.
The Tualatin, Ore.-based firm, a forerunner in this kind of agreement, has four injection presses from 250-610 tons operating at Solectron Corp.'s plant in Newark, Calif. Puget molds polycarbonate parts for Solectron's high-velocity systems division, which assembles computers, printers and other electronic systems.
The molder plans to hire about 35 employees for the Newark operation.
``We're very excited about this expansion of our molding operations,'' Jerry Schmidt, Puget's vice president and general manager, said in a news release.
The arrangement will allow it to better serve ``a number of major high-tech companies,'' especially those that are part of Solectron's customer base, Schmidt said.
Puget officials would not disclose how much their firm invested in equipment and the leased space at Solectron.
``Parts molded by Puget will move directly from their machines to our assembly lines to be integrated into our customers' products,'' with greater flexiblity and ``minimal logistics costs,'' said Jay Steele, Solectron's director of strategic sourcing.
After Puget approached Solectron with its proposal, the two companies drafted a memorandum that outlined such issues as who is responsible for what in the event of a calamity such as an environmental disaster or fire, Jeff Schmidt, director of manufacturing, said in a telephone interview. Corporate lawyers from both companies then worked out the details of the lease agreement and the extent of each firm's liabilities, he said.
Puget may enter into the same type of agreement with Solectron at another site in the future, to meet the requirements of increased production volumes and new programs.
Solectron, headquartered in Milpitas, Calif., has 22 plants worldwide providing electronic manufacturing services. The company reported $2.8 billion in sales for 1996.
Puget is a wholly owned subsidiary of Arctic Slope Regional Corp., based in Barrow, Alaska. ASRC was organized under the terms of the Alaska Native Claims Settlement Act and represents the business interests of the Inupiat Eskimos. Founded in 1969, the firm claims to be the single-largest plastics injection molder in the northwest United States.
Last year, Puget reported sales of $52 million. With 66 injection presses and 370 employees, it serves the electrical, automotive, medical, telecommunications and computer industries.