When Motorola Mobility revamped itself last year after being acquired by Google, it really hyped one thing, which was the fact that it was going to assemble smartphones in the US itself (for the US market). To make that happen, it opened an assembling plant in Fort Worth, Texas in May 2013, which was used to assemble the Moto X smartphones. It has just been a year and now the company is saying that it will close down the Texas plant by the end of 2014.
While many of you might blame the Lenovo acquisition (which is yet to complete) for this decision, Motorola Mobility President Rick Osterloh told WSJ in an interview that the decision to close the plant was independent of the planned sale.
According to Mark Randall, who is Motorola’s SVP for supply chain and operations, they started the plant to configure devices quickly for US consumers but due to poor Moto X sales, they never achieved the required scale, which would justify the economics of assembling the phone in US. Everyone knows that it is more expensive to assemble or manufacture products in US than doing the same overseas because of the labour costs.
Motorola has stated that they will continue to assemble devices in China and Brazil, which actually makes sense economically. The Texas plant closure will also not affect Moto Maker and the company is likely to import the configured devices from Brazil.
Motorola’s Texas plant currently employs around 700 people but there is no word on what will happen to them after the factory shutdown.