All Kodak?s consumer digital cameras are to be made by a Singapore-based company called Flextronics in a bid to streamline Kodak?s business and boost profits.
The move comes as Eastman Kodak reports a $127m rise in net losses for the three months ended 30 June, compared to the same quarter the previous year. Losses increased from $155m to $282m and total sales fell by 9% from $3.686billion to $3.360billion, compared to the same three months in 2005. Revenue from traditional products fell by 22%.
In a statement Eastman Kodak also announced the axing of up to 2,000 more jobs by the end of next year ? increasing the total job losses announced in 2004 from 25,000 to 27,000.
Formed in 1990 Flextronics ? which aims to deliver ?low cost, high volume manufacturing solutions? – will take over assembly, production testing and distribution of Kodak?s digital still cameras.
Meanwhile, Kodak will retain elements such as R&D and intellectual property in a deal which is expected to complete by the end of September. Around 550 staff will be transferred to Flextronics facilities, according to Kodak.
As part of the agreement Flextronics will acquire ?a significant portion? of Kodak Digital Product Center, Japan Ltd. It will also take over the design functions and employees at the manufacturing facilities of Kodak Electronics Products, Shanghai Co Ltd in China.
?This agreement will bring our camera products to market more quickly with greater predictability, flexibility and cost efficiency, while maintaining the innovative ease-of-use for which the Kodak brand is renowned,? claimed Eastman Kodak vice president John Blake Jr.