Subject:
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Re: Further Article on Lego ceasing Manufacturing at Enfield, CT location
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Newsgroups:
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lugnet.lego, lugnet.general
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Date:
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Wed, 29 Nov 2000 21:22:32 GMT
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Viewed:
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4318 times
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<snip>
> An article from my local paper:
>
> Lego To Shut Enfield Plant, Lay Off 94
>
> By MATTHEW KAUFFMAN
>
> The Hartford Courant
> November 28, 2000
>
> Lego will lay off 94 workers and shut down its Enfield-based manufacturing
> plant in response to a multimillion-dollar net loss this year, the company
> said Monday.
>
> The Enfield plant - Lego's only manufacturing facility in North America -
> will fall silent just before Christmas, said Katherine Lee, a spokeswoman
> for Lego Systems Inc., the company's U.S. subsidiary. All molding and
> processing work will move to plants in Denmark and Switzerland. Although
> labor costs are not appreciably different at the European plants, the
> company expects to save money because the plants are more automated and are
> running below peak capacity, Lee said.
>
> As part of a global restructuring of the toy company, Lego will also impose
> a temporary shortened workweek for as many as 400 packing and distribution
> workers in Enfield. To accommodate the company's cyclical workload, the
> employees will work three or four days a week, beginning in January, and
> receive partial unemployment benefits to make up some of their lost income,
> Lee said. The employees will return to full-time work around June, when the
> pre-Christmas ordering picks up, she said.
>
> Lee said the company expects that its packing and distribution operations in
> Enfield will expand over time, taking over the space currently used for
> manufacturing.
>
> The cost cuts are in response to an estimated fiscal 2000 loss of $40
> million to $65 million globally, which follows several see-saw years for the
> company's finances. Lego had strong earnings in 1996, but barely made a
> profit the following year. In 1998, the company reported its first loss
> ever, which led to layoffs for 10 percent of its global work force. But last
> year the company rebounded with a pretax profit of $67 million, built on a
> 25 percent increase in sales.
>
> A good chunk of that increase came from the introduction of the
> extraordinarily popular Star Wars-themed sets. The sets are still selling,
> but not at last year's blistering pace, and Lego is reporting a general
> decline in sales across most product lines. Some products continue to sell
> well, however, including Lego's pricey and high-tech MindStorms robotic sets.
If the preceeding paragraph does not finally convince TLC and some skeptics
here that AFOL's make up a significant chunck of the market, I don't know what
will.
Personally I think the Life on Mars sets are a huge step in the right
direction. Now if we could get that design philosophy (spelling?) back into
the rest of the themes everyone would be happy. I am guessing I would not hear
many kids commenting about how "Lego doesn't have peices anymore" either.
-Mike Petrucelli aka Lord Insanity
>
> In addition to the changes in Enfield, Lego is re-evaluating its business in
> Latin America, which has had disappointing earnings, the company said.
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