Kyocera to outsource U.S. handset production

Japanese electronics manufacturer Kyocera will outsource production and distribution of its U.S.-bound mobile handsets to Singapore manufacturer Flextronics International in a cost-cutting effort that will result in the loss of about 1700 jobs at its San Diego and Tijuana campuses.

Kyocera will begin outsourcing handset production later this month in an attempt to galvanize its mobile phone division, the company's sole money-losing core business. Kyocera plans to increase handset production to 15 million units annually with an eye toward making the business profitable by March 2006--by contrast, Kyocera's wireless division suffered a 14.9 billion yen ($142 million) pre-tax loss in 2004.

Kyocera acquired its North America unit from Qualcomm in 2000, and began phasing out handset production in its San Diego arm in mid-2003; between job cuts there and in Tijuana, Mexico, the two plants together will now employ only about 650 workers, with the Tijuana plant losing about 1400 employees in this latest wave of layoffs.