Google moving Motorola cell phone production from China to Texas

Washington Post:
Motorola Mobility, once a pioneer in shifting manufacturing to China, is opening a smartphone factory in Texas, the company said Wednesday, joining a small but growing movement toward bringing technology jobs to the United States.

The decision follows announcements by major tech firms, including Apple and Lenovo , planning to add U.S. manufacturing capacity after more than a decade in which the flow was almost exclusively in the other direction — with millions of jobs going to East Asian factories known for low wages and minimal labor protections.

The shifts to the United States are fledgling, and some industry experts say the companies are motivated less by long-term manufacturing needs than by public relations strategy. At a time of rising governmental scrutiny of technology companies, analysts say, there are few better ways to acquire allies on Capitol Hill than to create manufacturing jobs in lawmakers’ home districts.

But Motorola Mobility officials said they see significant business logic to having a factory close to the engineers who are designing a new flagship smartphone and the customers they hope will buy it. Officials say it aids innovation while allowing for leaner inventories and lower shipping costs.

“Doing that work of actually assembling the phone close to home will allow us to fix things faster, innovate faster,” said Dennis Woodside, chief executive of Motorola Mobility, a division that was bought by Google last year for $12.5 billion.

The new smartphone, the Moto X, will be the first designed entirely under Google’s ownership. It also will allow the company to capi­tal­ize on rising consumer preference for U.S. manufacturing; nearly two out of three Americans said they would pay more for an American-made product, a Gallup poll found in April.

The Moto X will be the first smartphone assembled in significant numbers in the United States since the launch of the iPhone made sophisticated mobile devices a key driver of growth in the technology industry, Motorola officials said. Americans are estimated to own 130 million smartphones, overwhelmingly built in East Asian factories. Many of the Moto X’s roughly 1,100 component parts will still be made overseas, the company said.

The competitiveness of American factories is helped by rising labor costs in East Asia — though wages there are still much lower than in the United States — and falling energy costs.
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Within the tech industry, Chinese computer maker Lenovo announced in October that it would build laptops and tablets in North Carolina, and Apple said this month that it would invest $100 million in a plant to assemble some of its Mac computers in Texas. Google, meanwhile, is producing the initial versions of its wearable Glass mobile devices in California.
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Motorola’s partner in the Texas project, global contract manufacturer Flextronics, has leased a 481,000-square-foot factory — about the size of eight football fields — in Fort Worth and has begun recruiting the nearly 2,000 workers who will assemble the Moto X, due to be released this summer. The factory, built by cellphone maker Nokia in the 1990s, had employed 3,800 people at its peak before it was closed in 2007, according to news reports at the time.
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Low energy costs and low taxes make Texas an attractive location and Fort Worth is near a major distribution hub for Fedex   Not mentioned is that Samsung also has a major manufacturing hub in Austin.  Even for Texas this looks like a big deal.

The natural gas bonanza is making manufacturing much more attractive in this country and people from both Asia and Europe are building large facilities in Texas to take advantage of it.

Comments

  1. After reading some nice stuff in your article I really feel speechlessmoving overseas

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