May 25, 2022

Fort Worth MotorolaThe assembly plant in Texas operated for almost exactly one year. The message from smartphone brand Google was simple: all the tests were too intimidating. “We found that the North American market was exceptionally tough,” Rick Osterloh explained at the time simply.

The text was already on the wall when the news was announced in May 2014. Two months ago, Google agreed to sell the Lenovo brand for a fraction of what it paid three years ago. Thousands to three-figure workers at the factory began to bleed to death even before the closure was officially announced.

Of course, it was not about ambition. Being able to label your phone as “Assembled in the USA” was a category where “Design in California” is almost as close as anyone in decades. Moto Maker’s custom color scheme has surpassed Samsung’s current pursuit of “personality” by almost a decade. However, in the end, the sale did not take place.

And as Motorola CEO Dennis Woodside enthusiastically explained, “It’s a myth that manufacturing here is impossible because it’s too expensive,” it quickly became clear that the company’s ambitions were not aligned with consumer interest. ,


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Motorola has deep Texas roots. Three hours and 40 years ago, the company raised its flag in Austin when the state capital’s population was about 300,000, up from about 15% in 2022. But the sprout of the technical scene was planted in the late 60s. With IBM when Motorola joined the class with names like Texas Instruments. In the 1990s, Motorola began manufacturing semiconductors in Austin, investing more than $1 billion in five factories and hiring thousands of employees.

At the turn of the millennium, development was scaled back or halted in many places, leading to the spin-off of the semiconductor division and the subsequent creation of Freescale. Under the new model, factories were closed and Freescale was restructured, a shadow of its former self, merged with the Dutch company NXP.

At the start of 21, most of Motorola’s Austin office was empty.planned tribe century. However, the approval of the city council amid the pandemic gave impetus to the redevelopment of space for new residents. Named Tech 3443 (the Motorola campus address sign, 3443 Ed Bluestein Boulevard), the project focuses on today’s Austin tech scene. Instead of focusing on the monolith of the past, the owners plan to rent it out to a mostly more diverse range of smaller clients.

However, giants still roam the Texas capital. Apple arrived in Austin in the early 1990s as Motorola was ramping up local chip production. The fate of these two companies at that time, of course, was very different. In the 1990s, Apple found itself in the midst of Steve Jobs and Macintosh clones and is trying to counter the growing dominance of Windows with Newton. In 2014, when Motorola closed its manufacturing plants, Apple began manufacturing the Mac Pro in Austin. Maybe it’s a high-priced commodity that made more economic sense to produce domestically.

While that version of the Mac Pro eventually disappeared, the company announced again in 2019 that the much-anticipated reboot of the product would be made at the same Austin plant.

“The Mac Pro is the most powerful computer Apple has ever made, and we’re proud to build it in Austin. We thank the administration for their support in realizing this opportunity,” Tim Cook said at the time. “We believe deeply in the power of American innovation. That’s why every Apple product is designed and manufactured in the US, includes parts from 36 states, supports 450,000 US supplier jobs, and we’ll continue to grow here.”

With another redesign of the Pro expected later this year, it’s not clear if the company will make the product again in Austin. However, the company’s presence in the city remains strong. In 2019, it opened a new 133 hectare campus that can accommodate about 5,000 employees. However, due to the ongoing pandemic, plans to actually cram those asses into chairs have almost certainly been shelved.

The company also offers other less traditional operations in the city, including Daisy, the iPhone-destroying robot. The system, which is in a warehouse in the area, is part of Apple’s larger sustainability initiative by taking the phone apart to reuse components.

Look at most companies, Apple’s domestic manufacturing business remains fairly modest. It is likely that a smaller, more expensive, and physically larger product like the Mac Pro has a higher margin than a mobile phone. Conventional wisdom continues to say that the economy is very difficult to penetrate when it comes to mass production.

The discussion about offshoring is mainly about employment issues. Makes sense when you hear about the industry’s net job loss of 34% over the past 40 years. Employee training programs, as Apple recently announced, are expected to help employees find other (hopefully higher-paying) jobs. While this is a difficult conversation, we need to keep going, especially since increased automation is making many features obsolete. It can be argued (as are humans) that robots and automation are not currently replacing “quality” jobs, but even if one readily accepts that premise, a job lost is a job lost, even if it’s not a “good” job. Job.

In the meantime, we hear an evolution in the conversation about domestic production. In addition to fears of shifting jobs overseas, the pandemic-driven supply chain and chip crisis have fueled talk of increasing domestic component production. Look no further than a bird’s eye view of the unsold cars at the Michigan race track, waiting for one of the growing number of semi-autos in today’s cars.

The most notable example of this is Intel’s $20 billion investment in a pair of chip factories outside of Columbus, Ohio. Closer to home, Samsung is experiencing its own $17 billion moment. In 2019, the world’s largest phone maker (the second largest in the US) laid off 290 employees when it closed its Austin R&D facility. However, the company retained about 3,000 jobs at a nearby chip manufacturing plant.

Late last year, Samsung confirmed reports of further expansion, this time in Taylor, Texas, about 30 miles from Austin. The company expects to launch this space in 2024, creating an additional 2,000 jobs in the sector.

“As we add a new feature to Tailor, Samsung is laying the groundwork for another important chapter in our future,” Samsung’s Keenum Kim said in a press release. “By increasing our manufacturing capacity, we can better meet the needs of our customers and contribute to the sustainability of the global semiconductor supply chain.”

As with Intel’s announcement, the factories probably won’t arrive in time to solve the current chip shortage, but just as experts expect more pandemics within our lifetime, another supply chain crisis is guaranteed. These issues, along with tense international relations and security concerns, point to a growing interest in domestic production. We have inspiration, and as technologies like automation and additive manufacturing advance, we certainly have the tools.

Even with these advances, the economy remains a major constraint that, despite the safety, affordability, and good reputation associated with manufacturing here, is likely to degrade the domestic product as a small piece of the overall manufacturing puzzle. But hey, in a world where Motorola is number three in the U.S. smartphone market under Apple and Samsung, anything is possible.

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