Motorola Streamlines International Supply Chain

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On the heels of an announcement that it would cease operations in South Korea, Motorola Mobility has announced that it will close a factory in India, has sold a factory in China and is outsourcing management of a factory in Brazil to a company called Flextronics. In August, Google, which now owns Motorola Mobility, warned of upcoming layoffs for 4,000 Motorola employees.

The Economic Times reported, “Google has agreed to sell manufacturing operations of its Motorola Mobility unit in China and turn over management of a Brazil plant to Singapore-based Flextronics, the companies said. In a statement Monday, the firms said Flextronics would acquire Motorola’s manufacturing operations in Tianjin, China, and will also assume management and operation of its plant in Jaguariuna, Brazil. ‘Employees and assets at both locations will transfer to Flextronics after the transaction closes,’ the statement said.”

PCMag quoted Motorola’s Mark Randall, who said, “The agreement with Flextronics is an important step forward for us in transforming our overall supply chain into a competitive advantage for Motorola Mobility. Flextronics has been our partner for many years, and their expertise and experience in manufacturing will enable us to focus on other areas of the supply chain where we can add the most value.”

TechCrunch’s Natasha Lomas observed, “The mobile industry has become fiercely competitive in recent years — with device update cycles shortening and mobile makers under pressure to innovate faster than ever. Outsourcing manufacturing to a dedicated electronics maker is a strategy most companies have adopted — including most recently Nokia, and of course Apple which outsources device assembly to Foxconn — allowing them to speed up time to market while also freeing the business to concentrate resources on other areas, such as design and software.”

Meanwhile, Business Standard reported, “Motorola Mobility, owned by Google, will suspend operations at its phone assembling plant in Chennai, [India,] from February next year. The decision is part of company’s global cost reduction plan. William Moss, Motorola Mobility’s director for communications in Asia Pacific, confirmed the development to Business Standard and said, ‘We are doing this because streamlining of our supply chain means that we are now fulfilling customer orders directly from factories and we have no current or forecast production requirements that would require the continued use of our Chennai facility.'”