Under pressure from Trump, Apple and Samsung should heed this ex-CEO before making phones in the US

Time of India

a day ago

Motorola's attempt to manufacture Moto X phones in the US failed due to low sales, high production costs, and difficulty in finding skilled workers. Despite customization options and assembly in Texas, major components still came from Asia. Experts warn that replicating this in the US is challenging for companies like Apple and Samsung due to labor shortages and higher expenses.
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In 2013, Motorola tried to win over US customers by highlighting that its Moto X smartphone was 'Made in the USA.' Dennis Woodside, Motorola's former CEO, said some people were more likely to buy phones if they were made in the US. Motorola set up a factory in Fort Worth, Texas, to assemble its new Moto X smartphone and compete with the iPhone and Samsung Galaxy.Moto X allowed customization — buyers could choose colors for buttons and the back panel through Motorola's website. This made it important to build the phones near US customers, so custom options could be delivered faster. Even though assembly was in Texas, major parts like the screen, battery, and motherboard came from Asia, as per the report by CNN.Sales didn't go as planned — only around 500,000 Moto X phones sold in Q3 2013. In May 2014, Motorola announced the factory would close, and production moved out of the US. Woodside said making phones in the US had high costs, and the supply chain was too scattered. He said it was hard to hire and keep skilled workers because other jobs like retail or food service were easier and more appealing.The work needed fine motor skills, since phones have hundreds of tiny parts, similar to handling 'super tiny Lego sets.' Most US workers weren't used to this kind of detailed work, so Motorola had to fully train new employees. Woodside says companies thinking of building phones in the US now should not underestimate how hard it is to find the right people, as stated by a CNN report.He advised companies to offer a strong reason for workers to stay, use automation wisely, and make sure products stay affordable. Moto X was Motorola's biggest US production effort, building 100,000 phones per week, but it still failed to survive. Only smaller companies like Purism still build phones in the US, but they're tiny compared to Motorola.Trump is again pushing for US-based phone production, telling Apple and Samsung to make phones in the USA or face tariffs. Tariffs on Chinese electronics, where most phones are assembled, are set to begin on August 12 unless there's a deal. India, now the top exporter of smartphones to the US, will be hit with a 25% tariff from August 7, according to the report by CNN.The US manufacturing sector is struggling — it lost 11,000 jobs from June to July 2025. It also lost around 15,000 jobs between May and June 2025, showing a steady drop in factory employment. A 2024 Cato Institute survey found most Americans don't want to work in factories. In a 2025 National Association of Manufacturers survey, attracting and keeping a skilled workforce was the top challenge for factories.Meanwhile, China's manufacturing sector is booming — in 2023, 123 million people worked in factories there. Apple's partner Foxconn runs a huge factory in Zhengzhou, China, that once made 350 iPhones every minute back in 2016. Apple is now shifting some production to India and Vietnam, to reduce its dependence on China. India has now become the biggest phone exporter to the US, as per the reports.Tim Cook, Apple's CEO, said in 2017 that China is perfect for phone production due to a mix of craftsman skills, robotics, and tech talent. Phone assembly involves tasks like placing small parts (cameras, chips) onto the phone body, and requires serious hand skills. Woodside said Motorola didn't realize how unprepared the US workforce was for this kind of work until they tried it, as per the report by CNN.China builds the needed workforce in advance, with training programs aligned with national manufacturing goals. Shivakumar said a workforce is just as essential as electricity or roads for any country's manufacturing strategy. In the US, vocational training varies by state or industry, making it hard to scale up skilled workers for high-tech factories.Carolyn Lee of the Manufacturing Institute said many new factory jobs will soon require digital skills like coding and data analytics. Woodside warned companies not to rush into US phone-making without planning how to find and train workers. He admitted Motorola failed to think through how much training would be needed, and that was a big reason things didn't work out, as mentioned in the report by CNN.Motorola stopped because sales were low, costs were high, and it was hard to find skilled workers.They can try, but experts warn it's very hard due to labor shortages and higher production costs.