updated 01:58 pm EDT, Fri May 30, 2014
700 workers to lose jobs, will likely not be retained after Lenovo acquisition
Motorola Mobile has announced plans to close its US manufacturing facility of the Moto X phone. The Fort Worth, TX site run by Flextronics on behalf of Motorola will shutter before the end of the year, causing the remaining 700 workers to be out of a job. The company will continue to manufacture the phones in Brazil and China, according to Motorola.
When asked about the Moto X sales under expectation in the US, Motorola President Rick Osterloh said said that "what we found was that the North American market was exceptionally tough." Poor US sales of the device led to failure of the company to develop economies of scale.
"Manufacturing or assembling smartphones in the US was always going to end in tears for Motorola," Neil Mawston of Strategy Analytics said. "The US is well positioned to design smartphones, as Apple does successfully, but manufacturing them is a whole different ballgame."
Google and Lenovo have negotiated a deal that will see the search engine sell its Motorola Mobility smartphone business to the Chinese manufacturer. The deal is valued at $2.91 billion dollars, with Google retaining most of the patents it acquired when it purchased the division in 2012. The Moto X phone will be shifted to Lenovo's aegis when the deal is complete.