February 8, 2007 – GSI Group, a maker of motion control and laser-based components, says it will move additional laser and high-speed air-bearing spindle manufacturing operations from two of its UK facilities to Suzhou, China, by the end of this year. The UK offices will reduce manufacturing capacity and discontinue production of selected low-volume legacy product lines.

“Having proven our manufacturing capabilities in Suzhou, China, we are looking to leverage our success by increasing production and product diversity in the facility,” said CEO Sergio Edelstein, in a statement, adding that the UK operations will continue to work on new product development initiatives and manufacturing for selected product lines.

The moves and restructuring will result in $4.5-$5.0 million in charges during 2007, and discontinuing the product lines means another $2.0-$2.5 million in inventory writeoffs. Once completed, the plan is expected to generate annualized pretax benefits of $5.0-$6.0, the company said. More details will be offered when the company releases fiscal 4Q06 earnings on Feb. 27.