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Brick by brick, LEGO® might move on
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lugnet.mediawatch
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Sun, 13 Nov 2005 09:04:04 GMT
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theage.com.au
-business newswire-
Nov. 13, 2005
Brick by brick, LEGO® might move on
It has a population of just 8,000, yet it churns out plastic bricks by the
billion. But now the people of Billund, Denmark, must prepare for the worst:
LEGO leaving town. By Andrew Martin.
Nearly all LEGO is manufactured in Billund, a small town in the centre of
Jutland, Denmark, and walking around it in the early evening feels a little like
being on a LEGO base board: there is a similar emphasis on well-ordered urban
topography; the houses are small, detached, self-consciously variegated. The
street signs and road markings are all clear and new-looking.
But all is not well in LEGOLAND. There is a danger that all the LEGO-producing
parts of the town will be shifted to Asia or Eastern Europe, because Lego is
fighting for survival as a privately owned, independent company. In 1998, the
LEGO Group made its first loss, and last year it made its largest loss: $417
million. The four LEGOLAND theme parks have been sold, and the workforce at the
factories in Billund where LEGO is produced has been reduced from 3,500 to
2,500.
Billund, with its population of 8000, was a mere village when Ole Kirk
Christiansen set up in business as a carpenter in 1916. He bought Denmark’s
first plastic-moulding machine, and in 1949 the patent to some English-made toy
bricks with studs on the top.
Mr Christiansen added tubes underneath, so that the bricks would grip as though
glued but could be pulled apart easily. Six of the standard eight-stud LEGO
bricks can be combined in 102,981,500 ways. Even in these fraught times for the
company, a LEGO product is sold somewhere every 20 seconds. It is one of the
world’s 10 most recognisable brands, and was twice voted Toy of the Century.
LEGO comes from leg godt, which means “play well” in Danish. LEGO encouraged
children to create their own towns. At first, it was all streetscapes. You could
construct people with LEGO bricks, but they made Frankenstein look a rather
fine-featured fellow. In the mid-1970s, LEGO introduced its first ready made
mini-figure. Thereafter, the population of mini-figures began to multiply.
Indeed, LEGO doesn’t look much like LEGO these days. In response to an
increasingly technological, brash and lurid toy market there have been licensing
deals resulting in Harry Potter and Star Wars-themed LEGO. There are LEGO
computer games, and murderous reptilian robot aliens called Bionicles. In the
process, LEGO has lost some of its identity.
“We’ve gone way too far in stretching the brand,” says chief executive Jorgen
Vig Knudstorp. He took the helm last year from Kjeld Kirk Christiansen, the
owner and grandson of the founder. Kjeld Kirk, a brilliant LEGO model-maker, is
worth $4.75 billion yet still lives in a modest house in Billund.
Some eyebrows were raised at the fact that Mr Knudstorp does not live in
Billund, and was not always a LEGO man. But he does look the part (benign
boffin); he does live quite close to Billund; and as we speak he builds and
deconstructs a series of small space cruisers from the pile of LEGO on his desk.
Mr Knudstorp’s survival plan will be welcomed by traditionalists. “We will
re-establish the core, which is the building experience and the role play that
follows,” he says. “You know, I was speaking to an executive from Unilever, and
he told me, ‘You’re really a bigger company than us, because your products are
never thrown away. The LEGO I had as a child still connects with the LEGO that
my grandchildren got yesterday.’ ” This is the opposite of built-in
obsolescence.
When I ask Mr Knudstorp if there might be a nostalgic element in some of the new
LEGO promotions, he nods. “It’s very retro-relevant.” New product lines include
kits allowing the construction of villa-like houses and boxy cars from which
that familiar, somehow poignant LEGO serration is not removed. The basic brick
is back. The Bionicles will remain, but their parts will be made more compatible
with ordinary LEGO. The LEGO computer games and clothing lines now operate under
licence.
The company is now “right-sized”, Knudstorp says. As for moving production from
Denmark, a decision will be made in 2007.
- Guardian
-link-
http://www.theage.com.au/news/world/locals-left-to-pick-up-pieces/2005/11/12/1131578272350.html
-end of report-
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