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Moto X Final Assembly Goes Red, White and Blue
Moto X Final Assembly Goes Red, White and Blue

By Nancy Owano
September 11, 2013 11:36AM

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Given the higher cost of labor that American assemblers and technicians command, does it really make business sense for Motorola to assemble its Moto X phones in Forth Worth as opposed to a site in Asia? Motorola's CEO thinks so. "It's not that much more expensive to make a phone in the U.S. than in Asia," said CEO Dennis Woodside.
 



For some consumers, how many pixels, free games and musical favorites they get out of their phones could take a back seat to their patriotic feelings when they realize their phones are providing jobs in America. That's what Motorola Mobility is betting on with its move to start up its Moto X smartphone production in Texas.

Tuesday marked a red, white and blue event for Google-owned Motorola Mobility, which opened its facility in Fort Worth, Texas, to officials and the media.

At a time in smartphone history where manufacturing in Asia is clouded with stories of low wages, excessive work hours, and dangerous factory conditions, a marketing advantage in being able to say the phones are homegrown is clear. The final assembly of the phones is what is taking place in the United States.

In turn, in addition to being able to promote the Moto X phone features such as voice activation and color customization options, the home-assembled pitch is designed to hit some home runs.

Staying on Target

"There are 150 million smartphones in the U.S.A. Until Moto X, not one of them was made here," Motorola CEO Dennis Woodside said in the Motorola blog post on Tuesday.

Motorola is shipping 100,000 of its new Moto X phones weekly from Texas. The total includes black or white models sold at carriers and the color-customized orders that made through Moto Maker and received by purchasers within four days. The total does not necessarily reflect actual phones that have been sold to consumers.

Woodside explained in a Reuters interview that the Texas facility was capable of producing "tens of millions" of phones a year but expansion depended on demand.

In a factory ramp-up you need a plan, he said, and Motorola had shipment targets it had to make with its carrier partners. Woodside said the company figured that 100,000 units was where it needed to be.

The facility is operated by Flextronics, a supply chain solutions company. The plant has some phone history -- it once employed people to make Nokia cell phones. The facility is approximately 450,000 square feet to 480,000 square feet with ample empty space, allowing for expansion.

Factoring Into the Deal

Given the higher cost of labor that American assemblers and technicians command, does it really make business sense for Motorola to pull this off in Forth Worth as opposed to a site in Asia?

As Woodside blogged, "The economics have changed. It's not that much more expensive to make a phone here than in Asia." Also, Flextronics CEO Mike McNamara said in a Reuters interview that it made good business sense as Moto X can get to consumers in four days along with the lower freight and logistics costs.

Smartphone watchers also point to company advantages in staying ahead of market wants and needs. Having the final assembly plant nearby allows designers and engineers to quickly react and view what may need some tweaks than if the factory were located overseas.

Certainly Woodside does not appear to need any persuading that Forth Worth is the right place. He said in his blog: "We've created more than 2,000 jobs in Fort Worth in less than four months, and we're still hiring."
 

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