Fort Worth plant to make first US-assembled smartphonesMay 31, 2013
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Photo courtesy of CNN. Motorota logo at a trade show.
Fort Worth will be home to the first smartphone ever assembled in the U.S. when cellphone pioneer Motorola opens its plant at AllianceTexas. The city gets more than just bragging rights – it also gets 2,000 manufacturing jobs.
Motorola announced May 29 it’s opening a former Nokia plant at Alliance that will create 2,000 jobs and produce its new flagship device, Moto X.
The company has already begun hiring for the plant. The site was most recently unoccupied but was once used by fellow phone manufacturer Nokia, meaning it was designed to produce mobile devices, said Will Moss, a spokesman for Motorola Mobility, which is owned by Google.
“It was a great facility in an ideal location,” said Moss, who said it will be an easy trip for Motorola engineering teams based in Chicago and Silicon Valley, and is also close to the company’s service and repair operations in Mexico.
Local officials were understandably pleased with the news.
“What an achievement, Fort Worth: The first smartphones to be assembled in the U.S.A. will be manufactured right here in our district,” said Rep. Kay Granger, R-Fort Worth. “[And] on a contract that every city in the country wanted, Fort Worth earned it and as a result, Motorola will be creating 2,000 jobs in our community. There’s a lot to be said for that.”
For officials at Hillwood, developer of AllianceTexas, the news was another sign that Fort Worth can be a strong competitor in any large industrial deals.
“Motorola Mobility’s selection of AllianceTexas as the site of its new manufacturing facility reinforces our position as one of the nation’s leading destinations for corporate site selection in manufacturing and logistics,” said Mike Berry, president of Hillwood Properties. “With our central geographic location in North Texas, a highly skilled workforce and proximity to the Alliance Global Logistics Hub, which includes access to major national highways, rail lines and Fort Worth Alliance Airport, all the amenities are in place for Motorola to operate successfully for many years to come.”
In addition to bringing 2,000 jobs to the local economy, the new plant will impact other companies in the area, said Terry Clower, director of the University of North Texas’ Center for Economic Development and Research. “Local companies will be indirectly affected. All of those secondary jobs [will be impacted]. Those 2,000 workers will go out and spend money in the area, and that helps create other jobs. You often see the ancillary and indirect jobs are even greater than the direct jobs created by the plant. You will see increased tax revenues, which is good news for local governments,” he said.
The formal announcement of the plant came at AllThingsD’s D11 Conference in Rancho Palos Verdes, Calif., from Motorola CEO Dennis Woodside.
Texas Gov. Rick Perry’s office administers a pair of special state incentive funds meant to help attract job-creating businesses to the state, but Moss said the Republican governor did not distribute any money to close this deal. There were no city tax abatements used to secure the deal either, according to Fort Worth leaders.
“Motorola Mobility’s decision to manufacture its new smartphone and create thousands of new jobs in Texas is great news for our growing state,” Perry said through a spokeswoman. “Our strong, healthy economy, built on a foundation of low taxes, smart regulation, fair legal system and a skilled workforce is attracting companies from across the country and around the world that want to be a part of the rising Texas success story.”
The factory will be owned and run by Flextronics International Ltd., a Singapore-based contract electronics manufacturer that has had a long relationship with Motorola. Flextronics’ U.S. headquarters is in San Jose, but it also has operations in Plano. The Alliance facility is located at 5650 Alliance Gateway. It was built in the 1980s and was once a cell phone manufacturing plant for Nokia that at one point employed about 5,000 workers.
Assembly accounts for relatively little of the cost of a smartphone. The cost largely lies in the chips, battery and display, most of which come from Asian factories. For instance, research firm iSuppli estimates that the components of Samsung’s latest flagship phone, the Galaxy S4, cost $229, while the assembly costs $8.
In December, Apple Inc. said it would move manufacturing of one of its existing lines of Mac computers to the U.S. this year, reversing decades of increasing outsourcing. The company has come under some criticism for working conditions at the Chinese factories where its products are assembled.
Some other manufacturers, such as Hewlett-Packard Co., have kept some PC assembly operations in the U.S.
UNT’s Clower said it is difficult to say if other companies will start relocating factories from the Far East.
“What you have here, are drivers of continuous innovation [in the technology industry],” he said. “We want to see them stay at the forefront of innovation.”
Motorola’s Moss said the Moto X will go on sale this summer. He said he could provide few details, citing priority secrets. He said the idea from the beginning was to bring manufacturing back to the U.S.
“It’s obviously our major market so, for us, having manufacturing here gets us much closer to our key customers and partners as well as our end users,” he said. “It makes for much leaner, more efficient operations.”
But Motorola will still have global manufacturing operations, including at factories in China and Brazil.
“Fact remains that more than 130 million people in the U.S. are using smartphones,” Mark Randall, Motorola’s senior vice president of supply chain and operations, said in a statement, “but until Moto X, none of those smartphones have been built in the USA.”
While the 2,000 jobs will be an obvious economic boost for North Texas and – in particular Fort Worth – the fact that the smartphones will be built in the U.S. is at least a sign that the rapid migration of U.S. manufacturing jobs overseas may have been staunched. The smartphone facility is near the site of NGC Renewables, a subsidiary of China-based NGC Transmission, that makes wind turbine transmission equipment. GE Locomotive started operations of a new locomotive-manufacturing plant at Alliance in January.
Will Weissert of the Associated Press and AP Technology Writer Peter Svensson contributed to this report from New York. Fort Worth Business Press intern Parker Ragland and freelancer Gail Bennison also contributed to this report.