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12 December 2012 | Adam Leach
Google-owned mobile phone developer Motorola Mobility is to sell off one of its factories and outsource the management of another to Flextronics to make its supply chain more “competitive”.
Under the deal, which will be finalised during the first half of 2013 pending regulatory approval, Flextronics will acquire a factory in Tianjin, China and will take on the management of Motorola’s facility in Jaguariúna, Brazil. Both facilities will continue to manufacture Android and other models of Motorola mobile phones under the terms of a manufacturing and services agreement. The financial details of the deal have not been disclosed.
Mark Randall, senior vice president of supply chain and operations at Motorola Mobility, said in a statement: “The agreement with Flextronics is an important step forward for us in transforming our overall supply chain into a competitive advantage for Motorola Mobility.”
The agreement will allow Motorola to take advantage of Flextronics’ capability. “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,” added Randall.
Mike McNamara, CEO at Flextronics, said: “We look forward to leveraging our extensive manufacturing expertise and supply chain solutions to provide Motorola Mobility with increased value.”
Google purchased Motorola Mobility in May of this year for $12.5 billion (£7.9 billion). In its third quarter results the internet search giant reported an operating loss of $527 million (£326.8 million) from the mobile phone maker.