LEGO Ups Bricks

On the back of a pretax loss of $26 million, LEGO have decided to relocate one of its production facilities to Eastern Europe, and are further considering a move to China reports this press release.


Lego may move production from Denmark

Posted on Wed, Sep. 07, 2005

Associated Press

Struggling Danish toy maker Lego Group, famous for its colorful plastic building blocks, said Wednesday it is considering moving all or parts of its production to Eastern Europe or China.

The privately held group reported a pretax loss of 156 million kroner ($26 million) last week and announced it would move a production factory in Switzerland to the Czech Republic.

In an interview with the financial newspaper Boersen, Lego chief executive Joergen Vig Knudstorp said the Swiss move was a test, and could be followed by a complete or partial move of the company’s main production facilities in Billund, Denmark.

“In the long term, I think that everything will be moved,” Vig Knudstorp was quoted as saying.

Lego spokeswoman Charlotte Simonsen told The Associated Press no decision had been made, but confirmed that outsourcing production to eastern Europe or China was being considered. She said the restructuring plans would be completed by 2010, and any moves would take place before that.

There are about 3,000 people working at the production facility at the Lego headquarters in Billund.

Simonsen said the company’s restructuring program could affect all of its production facilities, including one in Enfield, Conn.

Earlier this year Lego sold its four Legoland amusement parks to U.S.-based private equity group the Blackstone Group for 375 million euros ($457 million). The theme parks are located in Carlsbad, Calif.; Billund; Windsor, Britain; and Gunzberg, Germany.

Thanks to another DLR for sending in the news.

Entertainment Earth

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