Motorola will close Texas factory, stop assembling phones in the US

May 30, 2014

moto-x-aa-black-front

And just like that, Motorola is wrapping up its grand US manufacturing experiment.

Last year, Motorola opened a phone assembly facility in Fort Worth, TX, hoping that economies of scale would help it offset the higher labor costs associated with making phones in the United States, compared to China and other developing countries. At its peak, 3,800 workers were employed in the factory, and most of them were tasked with assembling the Moto X.

Today Motorola announced that it would be closing the Fort Worth factory by the end of the year. According to Mark Randall, VP for supply chains and operations, the closure is the result of weak sales of the Moto X, associated with high costs.

Currently, the factory employs 700 workers; it’s not clear what will happen with these workers, as some of them may actually be employed by Motorola’s manufacturing partner Flextronics.

Motorola’s President Rick Osterloh, who took the reins over from Dennis Woodside earlier this year, blamed poor market conditions for the company’s failed venture in home-based manufacturing. “What we found was that the North American market was exceptionally tough,” said the executive.

The Moto X came with some interesting new features and a customizable appearance, but ultimately the device failed to make a meaningful impact. Motorola found more success with the no-frills Moto G, and hopes to repeat the performance with the Moto E, which is even cheaper, at $129 unlocked. According to Strategy Analytics, Motorola managed to sell just 900,000 Moto X units in the first quarter of this year.

In the future, the Moto X will be assembled in factories in China, Brazil and other locales, said Motorola, who later this year will become a unit of Lenovo, one of the world’s biggest PC and smartphone makers.

Comments

  • Otto Andersson

    Companies need to build a reputation. Everyone wants to be Samsung of sales, but it took Samsung several iterations to be the company that normal people love but Android Authority users hate.

    • hah

      Normal people love ?!
      Faith in humanity lost! Try to get a life buddy! Samsung doesn’t need/want yr love, just yr money. You indeed are a sad person.

  • Shark Bait

    Maybe they should have tried selling it outside the USA. Globalisation has been a real thing for decades now.
    Its their own fault!

  • wezi427

    Is anyone reallysurprised?

  • MasterMuffin

    They only sold a few phones, but damn those few customers are loud and annoying praising Moto X for being the best there ever was. It’s nice, but NO. There, I said it.

    • Phil Rigby

      It’s nice, but YES. There, I said it. I got one for my girlfriend (after her being stuck for 2 years with a Razr, piece of crap that is) and it’s an awesome phone. Plenty powerful for the average user, decent camera and nice features like Moto Assist.

      There’s nothing wrong with that phone unless you’re a power-junkie and/or phone cracker/rooter.

      • MasterMuffin

        Or like to take pictures with your phone. And there’s really nothing wrong, but it’s not even close to being the best phone ever

        • Phil Rigby

          I said it takes decent pictures. My gf uses it a lot for posting pictures on FB and Pinterest, made some videos with it. I guess unless you’ve spent an extended period of time with it you wouldn’t know how good it is.

          • MasterMuffin

            No

          • Marcelove

            I fell what you’re saying Phil and I can relate… I don’t have Moto X (have a Nexus 4)… And I just had opportunity to handle just a Moto G that isn’t great, but for its price is a nice phone… And I’m from Brazil where taxes are absolutely insane (price of a phone here is like at least the double from USA, normally 3 times…)… Even with all those setbacks, for its price, Moto X is an excellent choice…

        • Marcelove

          Where before Phil told that Moto X is the best phone?

          But I can say this: it is the best phone in its price range… You don’t buy any smartphone as good as X for the money Motorola charges for it ( not considering ONE )

          • MasterMuffin

            Nowhere, did I say he did?

            $199 for 2 year contract is a lot. Now it’s cheaper because it’s older. And there’s for example Nexus 5

        • Anothermuse

          No, not the best..But at the $400 mark it’s a very good phone. The Nexus 5 does beat it, but both are solid mid range phones. I got one for my mother in law and really like playing with it. I’ll upgrade from a S3 this year and quite honestly I won’t need to the super top specs from a S5 or even HTC..That mid range will be excellent phones, handle 90% of users needs, and you get to keep some cash.

  • Brandon Power
  • Magnetic1

    Motorola has tough competition on the high end and the low end. They really can’t rest on their laurels.
    I see Sony kind of in the same boat. Apple does software and hardware. Samsung does hardware.
    Motorola did not leverage Google’s android and Sony is really dependent on Google and Qualcomm.
    It’s hard to control your destiny when so much is riding on how someone else is doing.
    Just saying.

  • Tyler Durden

    We don’t care about that, what we care about is having a 4K screen on a 4.3″ device. Because anything else sucks

    • Marcelove

      Haha yeah… If we have at least decent batteries I would have no problem with this insane race of PPI… But people in general think that is a big advantage have higher resolutions at smartphones… Even if we can’t see any difference at naked eyes comparing with a FullHD screen and that this “upgrade” will rape the battery…

      Next year BIGGGGGGG inovation: smartphones with 4K screens…. Hooray!!! o/

    • Anothermuse

      You’re just a figment of my imagination anyway..

  • Anothermuse

    The fact is, once this was priced right it started selling. And the X+1 is getting a decent amount of buzz and again if priced right out of the gate, sales should actually be something this year. Wish they’d try to make the plant work, but hey gotta make money.

    • thartist

      “once this was priced right it started selling”. That’s everything there is to know, period. Learn from that Moto, like the G confirmed later, and you’ll be back in full strength in no time.

  • Luka Mlinar

    I blame Dennis Woodside. Production in the US was a stupid idea from the start.

  • wric01

    They catered to that made in America crowd and they got screwed. Proof that most americans are hypocrites, since they say things like do not buy chinese goods yet they keep buying that made in china apple iphone or samsung galaxy.

  • David Brauss

    Chinese General just called Hagel a liar from across the table. These little experiments might actually become necessary.