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Motorola is shipping 100,000 Moto X smartphones weekly from its Fort Worth, Texas, manufacturing plant as the company, backed by Google's (GOOG) considerable financial and technical support, seeks to pop its head above water in the crowded and hotly competitive mobile market.

DH Kass

September 12, 2013

3 Min Read
Motorola: Moto X Smartphones Being Made in the United States

Motorola is shipping 100,000 Moto X smartphones weekly from its Fort Worth, Texas, manufacturing plant as the company, backed by Google‘s (GOOG) considerable financial and technical support, seeks to pop its head above water in the crowded and hotly competitive mobile market.

The vendor is counting on a made-in-America designation to push the sales needle upward to separate it from the pack of rivals chasing smartphone market leaders Samsung and Apple (AAPL). Last May, Motorola discussed at length its plans to occupy a manufacturing facility in Fort Worth previously used by Nokia (NOK), where its longtime manufacturing partner Flextronics (FLEX) will assemble the units, and which would yield some 2,000 jobs.

Now, in a blog post, Motorola chief executive Dennis Woodside elaborated on the vendor’s thinking in tethering assembly of its new Moto X unit to the United States, dispelling commonly held assumptions over high manufacturing costs in the United States, workforce liabilities and other issues.

The open question, of course, is if Motorola makes a go of it with U.S.-based manufacturing, will its success open the doors further to other vendors reshoring and, in the process, dilute its hard-earned competitive advantage?

“Conventional wisdom said it wasn’t possible,” Woodside wrote. “Experts said that costs are too high in the U.S.; that the U.S. has lost its manufacturing capability; and, that the U.S. labor force is too inflexible. And it’s true that most manufacturing in the consumer electronics industry moved offshore over a decade ago,” he wrote.

“One year ago, we chose to believe differently. We chose to be optimistic about the future of manufacturing in America. Not because making our flagship product here in the U.S. is the easy thing to do, but because it’s the right thing to do.”

In a separate Reuters interview, Woodside said the Fort Worth plant was capable of churning out “tens of millions” of phones a year and the current 100,000 a week production rate was but the beginning of a larger strategy.

“When you set up to ramp a factory you need a plan, and we have shipment targets we need to make with our carrier partners, and where we need to be right now is 100,000 units and that’s where we are,” Woodside said. He said Motorola is selling the phones at a profit.

In his blog post, Woodside listed three reasons for Motorola’s decision to manufacture in the United States, arguing first that the cost difference between making smartphones here and in Asia aren’t all that great, a point that Flextronics chief executive Mike McNamara, however, contradicted in a Reuters interview.

Secondly, Woodside contends that by building in the United States Motorola will be able to innovate more quickly and effectively because the “process becomes much easier when the people designing the products are near to the people building them.”

And, he said, the buying public has changed. “Some want to participate in the design of their device so they can reflect their personal style, and that’s much harder if your manufacturing is overseas. Others want a locally built product and want to know they are supporting local jobs.”

Ultimately, producing Moto X locally “provides jobs and helps maintain technical skills that would otherwise be lost. It’s also true to our nature. We’re makers, and we should continue to be makers.”

It will be interesting to see if that distinction gains Motorola a sustainable competitive leg up in the market.

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About the Author(s)

DH Kass

Senior Contributing Blogger, The VAR Guy

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