The -fPIC flag belongs with -mrelocatable, move it there.
Also change -fPIC to -fpic as this produces smaller
binaries.
However, currently -mrelocatable promotes -fpic to -fPIC, a
fix for this is in upcoming gcc 4.6 or you can apply this small
patch to gcc:

diff --git a/gcc/config/rs6000/sysv4.h b/gcc/config/rs6000/sysv4.h
index 8da8410..e4b8280 100644
--- a/gcc/config/rs6000/sysv4.h
+++ b/gcc/config/rs6000/sysv4.h
@@ -227,7 +227,8 @@ do {									\
     }									\
 									\
   else if (TARGET_RELOCATABLE)						\
-    flag_pic = 2;							\
+    if (!flag_pic)							\
+      flag_pic = 2;							\
 } while (0)

 #ifndef RS6000_BI_ARCH
--

Signed-off-by: Joakim Tjernlund <Joakim.Tjernlund@transmode.se>