To turn Motorola Mobility into a profitable state, Google aggressively streamlined 20 percent of its workforce and one-third of its offices and it still continues its cost cutting drive. One of the most recent developments is that Motorola Mobility has already closed a deal with a Singaporean-based company, Flextronics, selling its bases in China and Brazil.
In a joint statement released on Monday, it was revealed that Motorola sold its production operations in Tianjin, China and the management of its facilities in Jaguariuna, Brazil for an amount yet undisclosed. The deal is reportedly going to conclude in the first half of 2013 and would include “manufacturing services agreement for Android and other mobile devices.”
Flextronics boasts stability in its manufacturing expertise in 30 countries across four continents. Having signed this agreement with Motorola would definitely bring mutual benefits to both but analysts believe it is the latter that would take advantage of the deal. The senior vice president of Motorola noted that this is an “important step forward” for the company to turn its supply chain into a competitive advantage.
“We look forward to leveraging our extensive manufacturing expertise and supply chain solutions to provide Motorola Mobility with increased value,” Flextronics CEO Mike McNamara said.
Google’s acquisition of Motorola was believed to be an intellectual property move considering the company has a large and strong mobile patents portfolio that it could use to boost its dominance in the mobile market. Google, however, pledged to make Motorola a separate and independent Android vendor.
This is not the first time Motorola and Flextronics would be working together. Both also signed a multi-billion five-year contract, which was scaled back a year later, in 2000.
Motorola is also shutting down many of its international sites. It also recently announced of its plan to pull out from South Korea next year. Only the company knows which sites will be shut down just to bring it back to profitability. The assurance is, Google has its back.