Google is abandoning its attempt to build smartphones in the US and shutting down the Motorola factory in Texas, due to weak sales and high costs. Motorola said it will close the factory in Fort Worth by the end of this year, the Wall Street Journal reports. Motorola opened the factory in May 2013, and the site employed 3,800 people at its peak late last year. Most of these worked on behalf of the contractor Flextronics. The factory now employs about 700 workers who assemble high-end Moto X smartphones sold in the US, a Motorola spokesman said.
Motorola President Rick Osterloh said that the company found "the North American market was exceptionally tough". The Moto X sold for USD 600 without a contract when it went on sale in September, and the price was subsequently lowered to USD 399. However, the company failed to reach enough volume with the phone to achieve economies of scale at the factory.
Osterloh said the decision to shut the plant was independent of Google's agreement to sell Motorola to Lenovo. The company will continue to make the Moto X at other manufacturing sites in Brazil and China.
