COPENHAGEN -- Lego, the maker of the ubiquitous building blocks and other toys, will outsource most of its production to Flextronics over the next three years, with the EMS provider taking over some Lego plants. Other production will be moved to Flextronics’ plants in Eastern Europe and Mexico. No financial terms were immediately disclosed.

The move breaks new ground for Flextronics. "It's not electronics, it's plastic molding," said Alexander Blanton, an analyst at Ingalls & Synder told TheStreet.com. "This is the first major piece of business that I have seen of that nature."

Lego said it would cut 900 to 1,200 jobs as result of the switch.

“The decision to outsource comes on the back of an in-depth analysis of the company's total supply chain...with a special view to cost structure considerations and geographic proximity to the major markets,” Lego said in a statement.

In August, Flextronics will take over operations at Lego's factory in Kladno, the Czech Republic. In the first quarter of 2007, Lego will close its Enfield, CT, plant, with 300 jobs relocating to Flextronics' facilities in Mexico.

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