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May 18, 2005 - Leica received another body blow today when camera-making partner Minox announced they were breaking away and becoming a wholly independent manufacturer.
'It was the right decision to focus on new sales channels and lucrative niche markets. More innovative products will be launched this year securing the ongoing growth of MINOX GmbH,' said Minox General Manager Thorsten Kortemeier.
In 2001, Kortemeier took control of Minox when he acquired a controlling share, or 51 percent, of Minox’s partnership capital. That left Leica with the remaining 49 percent and no control of the company’s future course.
Minox hopes this break will allow them to take advantage of consumer recognition of its style of small, inventive products - like their famously tiny Minox 'spy' camera.
Leica has seen the cache of their name and products sustain through the decades since they were first founded. The small manufacturer of expertly crafted cameras has struggled in recent years to keep pace with the trend towards digital cameras with relatively short product life spans. Each camera that comes out of a Leica assembly plant takes roughly 11 man-hours to make and they are considered photography connoisseurs' camera of choice.
A Leica company spokesman recently admitted the camera-maker was in a 'profound economic crisis.' Leica is expected to lose nearly $162 million by the end of its fiscal year.
To cut costs, Leica has actually lowered production output at its main production site. For a three month period Leica assembly workers, who construct each camera by hand, were on the job for only 24 days.
The release of the Leica Digital Module R, originally planned for introduction in December of 2004, was pushed back to April, which turned into May. Then last week Leica announced the Module R would again be delayed.
Leica officials expect the production on the Module R, which has been in development for two years, to keep workers working at maximum capacity for months just to fill pre-orders.