Motorola Mobility shutters only US smartphone factory
Motorola Mobility, which is being acquired by China's Lenovo from Google for $2.9 billion, has decided to close the only U.S. factory that makes smartphones by the end of the year, the Wall Street Journal reports.
Motorola Mobility opened the Fort Worth, Texas, factory just last year to manufacture the Moto X phone. Google's mobile phone unit will continue to make Moto X in China and Brazil.
"What we found was that the North American market was exceptionally tough," Motorola President Rick Osterloh said in an interview with the Journal. Osterloh stressed that the plant closing was unrelated to the unit's pending acquisition by Lenovo.
The Moto X sold only 900,000 units worldwide in the first quarter, compared with the iPhone 5S,which sold 26 million units, according to market research firm Strategy Analytics.
Poor Moto X sales meant that the plant could not achieve the economies of scale Google was expecting, while costs were much higher than overseas plants, Mark Randall, Motorola's senior vice president for supply chain and operations, told the newspaper.
The factory employs around 700 workers, down from a peak of 3,800 workers, and is operated by Singapore-based Flextronics. Motorola Mobility spokesman Will Ross declined to say whether the workers would be maintained once the plant closes, according to AP. However, the Dallas Business Journal reports that the workers will be laid off.
- read the Wall Street Journal article
- see the AP report
- check out the Dallas Business Journal report
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