Motorola to shut Singapore plant

The U.S. handset maker says the decision to stop manufacturing phones in Singapore is part of a global cost-cutting initiative

In a statement released this week, Motorola said the decision to cease mobile phone manufacturing functions in Singapore is part of a global initiative to reduce costs by US$500 million.

Migration work from the local plant to its worldwide manufacturing facilities will be deployed in phases, starting in the second quarter of this year, and is expected to be completed by end-2008.

Some 700 staff based in the island-state will be affected. Along with severance packages, these employees will also be offered outplacement services, according to Motorola.

Its Singapore office will still serve as Motorola’s Asia-Pacific operational headquarters, the company said, adding that the country remains a significant site for its regional management functions and software development activities.

Last week, Motorola unveiled plans to split into two publicly traded entities–one managing handsets and accessories, and the other handling wireless broadband networks and enterprise communications services.

Company CEO Greg Brown said of the split: “Creating two industry-leading companies will provide improved flexibility, more tailored capital structures and increased management focus, as well as more targeted investment opportunities for our shareholders.”

According to figures released Monday by research house IDC, Motorola dropped a place to No. 3 in the Asia-Pacific mobile phone market.

Over 366 million cell phones were shipped across the region, excluding Japan, last year, where Motorola’s market share dropped to 8.3 percent, compared to 19.1 percent in 2006. IDC attributed the phone maker’s reduced market share to waning sales from its Razr series and Motorola’s decisions to move away from the ultra-low end segment.

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