Motorola is shutting down its U.S. smartphone factory

Motorola Shutters U.S. Factory

Motorola can’t afford to build its smartphones in the United States any longer. The Wall Street Journal reports that Motorola will be shuttering its factory in Fort Worth, Texas by the end of 2014. The factory opened last year, despite the odds being stacked heavily against its success. Now, just four months after Google announced it would be selling Motorola to Lenovo for $2.9 billion, that factory is closing — a decision independent from the sale, according to Motorola President Rick Osterloh. According to the report, over 700 workers are currently employed at that factory.

“What we found was that the North American market was exceptionally tough,” said Osterloh in an interview.

Motorola envisioned that the factory would give it the opportunity to get its flagship devices, most notably the Moto X, into the hands of American consumers faster than ever. As Moto X sales slumped, the company was forced to cut the price of the phone and suffer decreased profit margins. The company will continue to make the Moto X in China, Brazil and other, more affordable locations.

“Manufacturing or assembling smartphones in the U.S. was always going to end in tears for Motorola,” Strategy Analytics analyst Neil Mawston said. “The U.S. is well positioned to design smartphones, as Apple does successfully, but manufacturing them is a whole different ballgame.”

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