Delphi and Parlex Enter Into Strategic Alliance to Grow Military/ Aerospace Market Presence

Companies to Leverage Expertise in Flex Circuit Design and Assembly

METHUEN, Mass. and TROY, Mich., Aug. 19 -- Delphi Corporation and Parlex Corporation have entered into a strategic alliance that is expected to benefit both companies' current-sales and future-growth prospects in the military/aerospace interconnect market.

The agreement will have Parlex providing Delphi Connection Systems, a business line within the corporation's Packard Electric division, with flexible circuits and rigid flexible circuits for various customer applications. Delphi Connection Systems will fit these circuits with its line of connectors and related components at its final assembly operations in North America.

Meanwhile, Parlex Corporation, a world leader and innovator in the design and manufacture of flexible interconnect products headquartered in Methuen, Mass., will utilize many of Delphi Connection Systems' interconnect products for its flex circuit programs. Delphi will also perform final assembly for Parlex's completed flex circuit products at its Tijuana, Mexico operation. The Tijuana manufacturing plant produces complex military/aerospace assemblies and has 30 years of manufacturing experience in flex circuit assembly.

The alliance marks the continued acceleration of Delphi's activities to better address customer needs for flex products in this market. It allows both companies to leverage wide-ranging capabilities and expand their reach into the marketplace by working together in a manner that will prove to be mutually beneficial through increased economies of scale and more competitive product offerings for customers.

"The flexible interconnect companies servicing the military aerospace market are highly fragmented," said Peter J. Murphy, president and chief executive officer of Parlex. "We see a unique opportunity for further development of core competencies to serve customers more effectively as a leading supplier to this market. We are extremely pleased to strengthen our long-term relationship with Delphi through this new initiative."

In addition to assembly and connection system expertise, Delphi Connection Systems will also provide Parlex with additional sales channels and add design and application engineering capability to the sales process.

"This alliance will provide our customers with a more competitive product, as we combine a now much broader product portfolio with Delphi Connections Systems' technology development capability and assembly expertise," said Kevin R. Heigel, business line executive for Delphi Connection Systems, who noted that the value brought by Parlex's technology allows for greater access into regional markets where presence before had been limited.

"We have been a strong player in this market with our flex products for several decades, and we are committed to remaining there," Heigel continued. "This relationship with Parlex will further strengthen our efforts with a product base and design capability that complements our engineering activities, and it will benefit our business profile with such a close tie to a market leader."

Murphy noted that while production will take place in three Parlex facilities, the majority will be manufactured in its Methuen-based multi-layer operation. "We consider this program to be a major element of our long term growth strategy," he said, noting that this program is expected to provide up to $7 million in annual sales for Parlex. "Our goal is to be a leading provider of flexible interconnect technologies to the military/aerospace market by leveraging increased economies of scale."

In addition to the military/aerospace market, the strategic alliance leveraging product, engineering and manufacturing capabilities is expected to address the needs of customers globally in other markets, such as the computer & peripheral, telecom and industrial markets. This is heightened by the expansion of flex-related products on which the two companies will collaborate.

About Parlex

Parlex Corporation is a world leader in the design and manufacture of flexible, interconnect products. Parlex produces custom flexible circuits and laminated cables utilizing proprietary processes and patented technologies, which are designed to satisfy the unique requirements of a wide range of customers. Its manufacturing facilities are located in the United States, China, Mexico and the United Kingdom. For further information, visit Parlex on the web at http://www.parlex.com/ .