Domestic manufacturing is making a comeback in Texas. The Moto X, the product of Google's collaboration with Motorola, has the distinction of being the only smartphone that's manufactured—well, assembled—in the United States. This bucks a trend that has overtaken the domestic manufacturing industry over the last several decades toward more offshoring. The race to the bottom of labor costs has seen an actual majority of the US manufacturing industry head for low-overhead, low-oversight havens such as China, Mexico, and Indonesia. The decision to design and build the Moto X in the US, using American workers, signals a potential shift in the market of seismic proportions.
Texas governor Rick Perry has been on a high-profile campaign in recent years to attract businesses that are willing to bring jobs to his state. Among the incentives he's offering are low taxes, a relaxed regulatory environment, and what could be called an indulgent attitude toward public investment in private business. In a sense, therefore, Texas has positioned itself to compete with the Third World in labor costs and overheads. The state also offers the incentive of a large local consumer market, which is where most Third World countries fall short.
In the case of the Moto X, Perry's efforts have been met with success. The long-dormant Nokia assembly plant in Fort Worth has been reactivated, with generous state subsidies, and retooled to produce Google's flagship smartphone. The Moto X assembly plant occupies a cavernous 480,000 square feet of factory floor space and has brought at least 2,000 manufacturing jobs to the Fort Worth area. While the Moto X assembly line is large and crowded, it only occupies about half of the space available.
One reason for this is Motorola's apparent desire to expand. Company executives are already talking about adding product lines to the plant's repertoire. This stands in stark contrast to the attitude of other high-tech manufacturers, such as Nokia and Ericsson, that have not only refused to invest in domestic production but have also been leaving the US for low-wage, regulation-free bases overseas despite the costs associated with a global transport network.
It remains to be seen whether Texas's efforts at emulating the probusiness climate of the Pacific Rim will enjoy long-term success in the US. Perhaps Google is just taking advantage of a temporary set of incentives to save on transportation and import costs. The set of deals that persuaded Google to set up shop in Texas contains no guarantees of any kind that the management can't simply decide to lift off when it seems more profitable to do so. There's also the elephant in the living room: what will the management of the Moto X plant do when the workers form a union? Despite the uncertainty, for now at least, Google has gambled on hiring American workers, and it's to be hoped others will follow.
(Photo courtesy freedigitalphotos.net)
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