Pemstar's three Midwest sites will be integrated into one virtual operational entity with shared general management and support services, the company says. Management wouldn't spell out how the restructuring would affect Minnesota except to say that the consolidation includes integrating Pemstar sites in Rochester, Chaska and Duneith, ND, as well as a plant in San Jose. The company plans to sublease a 60,000-sf plant in Rochester.

"The Rochester plant was our original manufacturing plant when we were incorporated in 1994," says Shayn Carlson, executive director of finance. Carlson adds the plant, which has been idle for about a year, was recently sold to a new owner, whose identity was unavailable.

Pemstar already announced it was closing facilities in Taunton, MA and Hortolandia, Brazil, as well as consolidating overhead in its Midwest and West Coast operations--a move that will affect facilities in Chaska and Rochester.

Pemstar says it will eliminate an additional 20 to 25 employees, mostly senior corporate staff, bringing the total cutback to about 100 to 125 over the past few months. About one-fifth of those affected work in Minnesota or North Dakota, where it has more than 750 employees, according to Carlson.

Brian White, a securities analyst with Kaufman Brothers, says Pemstar is struggling with heavy debt, accounting issues in Mexico, increasing losses and a "questionable competitive position" in the industry. He also says one of Pemstar's primary bases of customers, the technology sector, continues to weaken.

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