State

First smartphone plant in U.S. closes after 9 months

The 700-person plant in Fort Worth, Texas, opened last September to much fanfare as the first in the nation where smartphones would be assembled, but sales of Motorola’s Moto X phone, the factory’s flagship product, were too weak and not in line with the high cost to keep operations going.

By StateScoop Staff

June 2, 2014

The first smartphone assembly plant in the United States is closing less than a year after it opened, officials from Motorola Mobility announced last week.

The 700-person plant in Fort Worth, Texas, opened last September to much fanfare as the first in the nation where smartphones would be assembled. But sales of Motorola’s Moto X phone, the factory’s flagship product, were too weak and not in line with the high cost to keep operations going.

The opening last year included visits from Texas Gov. Rick Perry and Google CEO Eric Schmidt. The hope was the plant would create approximately 2,000 new jobs in the state, with Perry hoping that number would creep towards 2,500.

“Make no mistake: Flextronics and Motorola could have put this facility anywhere in the world, but they chose Texas,” Perry said at the time. “One of the reasons Texas excels at creating jobs and new technology is that we free people from over-taxation, over-regulation and over-litigation, so they can focus on doing their best work. By freeing people to create, experiment and innovate, we truly bring out their best. And they bring out the best in Texas.”

Although the concept and design of smartphones was created in the United States, many are assembled in Asia because of the lower costs of labor. The factory in Fort Worth did allow Google, which owns Motorola Mobility, to stamp “Made in the U.S.A.,” although the plant was the last step in a long manufacturing process for the devices.

Motorola Mobility will continue to develop the Moto X in Brazil and China, where the costs for labor and shipping are not as high. The plant in Texas is operated by Flextronics, an international contract electronics manufacturer.

The announcement of the plant closure comes four months after Google said it planned to sell the Motorola Mobility smartphone business to Hong Kong-based computer maker Lenovo for $2.9 billion. The sale is expected to close by the end of the year, according to a filing with the Securities and Exchange Commission.