Google offloads Motorola's China, Brazil factories

Motorola has struck a deal to pare back on its manufacturing facilities, allowing Flextronics to take them over.

Google's Motorola Mobility unit has signed a deal to sell its Chinese manufacturing operations to Flextronics, which has agreed to run its Brazil facility as well.

Under the deal, announced yesterday, employees and assets will transfer to Flextronics once the deal closes, expected in the first half of 2013. The deal also calls for a manufacturing and services agreement for Android and other mobile devices between the two companies. Financial terms weren't disclosed.

The deal allows Motorola to run more efficiently under Google, which has continued to absorb the unit's losses since taking over the business earlier this year. Motorola has been working to reduce the number of products it releases and to sharpen its focus on a few core devices, including its Razr line of smartphones.

"The agreement with Flextronics is an important step forward for us in transforming our overall supply chain into a competitive advantage for Motorola Mobility," said Mark Randall, senior vice president, supply-chain and operations for the company.

Flextronics is a Singapore-based provider of manufacturing services to a number of industries, including mobile.

The facilities affected are in Tianjin, China, and Jaguariuna, Brazil.

The move comes as many of the major handset manufacturers outsource the production and labor costs of building the actual phones to companies operating at a lower cost overseas.

"We are very pleased to announce today's agreement and expand our long-standing collaborative and successful relationship with Motorola Mobility," said Flextronics CEO Mike McNamara.

About the author

Roger Cheng is the executive editor in charge of breaking news for CNET News. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade. He's a devoted Trojan alum and Los Angeles Lakers fan.

 

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