Failed Phone Startup: Ex-Motorola Exec Blames American Labor (Lack of Assembly Line Interest)

CNBC AI News, August 10 – The push for re-industrialization and “Made in America” policies has reverberated through the global economy in recent years. However, the reality of getting Americans back to the factory floor, as evidenced by Motorola’s short-lived experiment, is proving far more complex.

Former Motorola CEO Dennis Woodside recently spoke about the challenges of reviving U.S. manufacturing, recalling the company’s 2013 initiative to reclaim a slice of the American smartphone market from Samsung and Apple. This led to the establishment of a mobile phone assembly plant in Texas.

The facility, employing over 4,000 workers at its peak, produced the flagship Moto X, boasting customizable features. However, market performance fell short of expectations, and the venture was shuttered within a year.

Woodside highlighted several key obstacles faced by the U.S. phone factory. A fragmented supply chain posed a major challenge. Key components such as batteries, screens, and motherboards were sourced from Asian manufacturers, resulting in significantly higher assembly costs due to transportation.

But the supply chain hurdles paled in comparison to the previously underestimated challenge of talent acquisition. Recruiting, training, and retaining employees proved unexpectedly difficult.

Woodside explained that assembling phones requires handling hundreds of tiny parts, a task for which most American workers were initially unprepared. Extensive training was necessary to bring them up to speed.

Even with training, the abundance of alternative employment options in the U.S. labor market made it difficult to attract suitable candidates and the prevailing sentiment that factory work isn’t a path to a prosperous life, as indicated by previous surveys, further complicated the staffing issues.