Motorola Mobility, owned by Google, will suspend operations at its phone assembling plant in Chennai 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.”
The decision was taken after working to identify other opportunities for this facility to continue operating, he added.
However, the company’s research & development operations in Bangalore and other corporate functions in India will continue. “We continue to maintain our R&D centres for mobile devices and home business, home business go-to-market, corporate IT and other corporate functions in India,” he said.
The Chennai facility started operations in 2008 with an investment of around Rs 172 crore. It was later acquired by Google in May 2011. “We know this is difficult for our colleagues who are impacted, and we are working with them to settle all dues, provide relief packages and to help them find other opportunities,” said Moss.
It may be noted, early this month, the phone-maker said it was restructuring its global business to make it leaner and profitable. The restructuring process would lead to 4,000 people losing their jobs, mainly outside the US. Its operations in India and Asia would also shrink as an impact of these decisions.
Moss said they were looking for some acquires to take forward the Chennai unit. “So far we have found no acquirer according to our requirements. As soon we find one we will sell the unit,” he said.
On Monday, Flextronics and Motorola Mobility LLC, owned by Google, announced that the companies had signed a definitive agreement, under which Flextronics would acquire Motorola's manufacturing operations in Tianjin, China, and would also assume the management and operation of its Jaguariuna, Brazil, facility. It also said it would close most operations in South Korea.