Motorola Mobility to suspend Chennai operations

Google-owned company says no buyer for its Chennai facility

Motorola Mobility, owned by Google, to suspend operations at its phone assembling plant in Chennai. The decision is part of company's global cost reduction plan and it will come into effect from February next year. The loss making phone maker which has been selling its units in Asia Pacific stated that it could not find a buyer for Chennai unit.

William Moss, Motorola Mobility's Director for Communications in Asia Pacific confirmed the development to Business Standard, 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.”

He added this decision was taken after working to identify other opportunities for this facility to continue operating. This decision only affects the Chennai customer fulfillment centre. “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.” Company’s research & development operations in Bangalore and other corporate functions in India will continue.

“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.

The Chennai facility started its operations in 2008 with an investment of around Rs 172 crore. The unit later was acquired by Google in May 2011.

It may be noted early this month, the phone maker said it was restructuring its global business to make it leaner and profitable and the restructuring process will 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.

In a press statement on Monday, Flextronics and Motorola Mobility LLC, owned by Google, announced that the companies have signed a definitive agreement, under which Flextronics will acquire Motorola's manufacturing operations in Tianjin, China, and will also assume the management and operation of its Jaguariuna, Brazil, facility. It also said that that it will close most operations in South Korea.

“We were looking for some acquires to take forward the unit in Chennai, but so far no acquirer we found according to our requirements. As soon we find one, we will sell the Unit,” said Moss.

The company plans to close or consolidate about one-third of its 90 facilities.