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Motorola gives up on Made in America dream, plans to shutter Texas plant

News by Andrew Kameka on Friday May 30, 2014.

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The manufacturing plant in Forth Worth, Texas, that Motorola built with Flextronics to assemble the Moto X is shutting down. One year after Motorola announced plans to build its smartphones within US borders as a cost-saving measure to rapidly assemble and distribute the Moto X smartphone, the plant is being decommissioned because of "weak sales and high costs," according to the Wall Street Journal.

Motorola had hoped that bringing manufacturing to the US would earn it increased brand awareness and offset the costs of higher wages by being able to scale production and save on logistics costs relating to manufacturing and then shipping overseas. Those benefits never materialized because the Moto X never obtained enough commercial success to justify costs. Analysts estimate that the Moto X sold less than 1 million smartphones in the first quarter of this year. The most successful device Motorola released in 2013 was the low-cost Moto G that remains the company's best selling phone.

Motorola President Rick Osterloh told the Wall Street Journal, "What we found was that the North American market was exceptionally tough."

Roughly 700 workers are currently staffed at the Texas plant, down from the 3,800 people who worked there when the plant opened to much fanfare and press last summer. Selling the company to Lenovo, which has yet to be made official, also frees the Chinese vendor from suffering the bad PR of closing the plant to move production to China. Manufacturing will be moved overseas because the Moto G is a hot product mostly in developing markets, so producing the phone in the US doesn't make economic sense.

source: Wall Street Journal

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Andrew Kameka
Andrew is based in Miami, Florida.

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