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Electronics Production | May 30, 2007

Lay-offs delayed at Lego Billund<br>after outsourcing trouble

The workforce at Lego Billund, Denmark was supposed to be reduced from 1200 employees to only 300 employees since the company had decided to outsource major parts of its manufacturing to Flextronics but as the outsourcing has been followed by problems the lay-offs have now been postponed on an uncertain time range.
Lego's outsourcing has from the very beginning been connected with major troubles. Even from the start there were a number of opponents to the outsourcing of manufacturing of one of Denmarks prides, the Lego products. On many internet sites there have been discussions about troubles that have come up along the process.

Flextronics were contracted to take over major parts of Lego's manufacturing. Flextronics took over Lego's plant in Czech Republic and Flextronics would also manufacture Lego's products at its sites in Mexico. Major problems in the manufacturing have now resulted in a decision from Lego to keep its workforce in Billund to start up manufacturing there again. The company yet don't know for how long this will last or when the plants in Czech Republic and Mexico will be up and running properly.

"That's right. A key employee quit his job in Czech Republic and we didn't get the needed staff in the start up phase. The last thing was quite unexpected. We thought that our manufacturing partner had everything under control. In Mexico the material started to come in before the equipment and the personell were ready and that caused us huge problems", Lego's CEO Pali Padda told the Danish stock market magazine “Börsen".

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