'That's Something We Didn't Quite Anticipate': The Moto X, And Why Former Motorola CEO Says Building Smartphones In The US Is Nearly Impossible

In 2013, telecommunications company Motorola Solutions Inc. MSI attempted to set itself apart from the smartphone pack by doing something relatively unheard of: manufacturing its devices in the US.

"There was a segment of customers that said, ‘Hey, if you produce products in the United States, I'm more likely to consider them," former Motorola CEO Dennis Woodside told CNN. 

The experiment didn't last long. A year later, the company had shut down its Texas factory and gone back to building its flagship smartphone, the Moto X, overseas.

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The issues Motorola faced with its domestic manufacturing plan were varied and included things like a fragmented supply chain and lower labor costs. The real kicker, however, was the fact that the company would have had to teach an entire workforce an entirely new skill set.

"Understanding the nature of the product you're making, and thinking about… ‘Are we going to have to completely train the workforce to understand this specific product?' That's something we didn't quite anticipate," Woodside said.

When Motorola introduced the Moto X, one of its key selling points was that it was almost entirely customizable. Customers could select things like the specific color used for the buttons or the back panel. 

The actual construction of these phones was highly technical and specific. Woodside compared putting a smartphone together to completing a "super tiny lego set."

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"There's probably several hundred (phone) parts, and they're tiny," he told CNN. "And what we didn't appreciate is that most people were not accustomed to that kind of work at all in the US. We had to train people on that specific type of work."

This proved particularly difficult to do when you consider the fact that many Americans didn't want, or didn't need, factory jobs. Workers had plenty of other options, like retail or food services, that were less demanding and more desirable.

CNN says that Motorola's efforts to produce the Moto X in Texas may be the only wide-scale attempt to manufacture smartphones domestically, so far. That could change soon, though, as President Donald Trump has put pressure on companies like Apple AAPL and Samsung to produce their devices in the US or face higher tariffs. 

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For his part, Woodside isn't optimistic that domestic manufacturing of smartphones and similar devices could ever work. He urges companies considering the change to think long and hard about whether or not they'd be able to attract the right staff with the necessary skills. 

"You have to have a very strong value proposition to the employee," he told CNN. "You have to be thoughtful about how you use automation, and be really smart about all of the economics to make sure that at the end of the day, you can be price competitive in the market."

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