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Google's New Phone: Made in the USA

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Motorola Mobility, the phonemaker Google purchased last year, announced yesterday that it will manufacture its newest phone, the Moto X, in the United States (just outside of Fort Worth, Texas). Motorola Mobility CEO Dennis Woodside teased the new smartphone at the D11 conference, but the made-in-America buzz trumped the latest and greatest features it’s purported to have. The NYT reports:

Dennis Woodside, the head of Motorola, said…that the Texas location would allow Motorola to “iterate and innovate much faster.”

Mr. Woodside acknowledged that while the Moto X will be built in the United States, not all of its parts would necessarily come from American manufacturers.

“The components will come all over the world,” he said. Display parts will be built in South Korea, for example, and processors will be made in Taiwan, he said.

Woodside estimated that the Texas plant would employ roughly 2,000 Americans. That’s nothing to shake a stick at, but nor is it as exciting as some are making it out to be. The phone’s parts will still be made outside of the US; the Fort Worth plant will just be putting these parts together. And a few thousand jobs here and there are hardly a sign that the Fordist era of American manufacturing is making a comeback.

So why is Google making such a big deal about this? First, because the made-in-America tag is great PR, and tech companies like Google and Amazon are increasingly seeing the value in aligning themselves with the preferences and causes of the American political class.

A couple of years ago, when President Obama asked Steve Jobs whether Apple could make its products in the US rather than China, he famously replied that “those jobs aren’t coming back.” Today’s tech giants seem much less cavalier about delivering such dour news to Washington. Issues of intellectual property rights and instances of state-backed hacking of American companies have become big problems for Silicon Valley. Tech CEOs have re-discovered the benefits of cozying up to Uncle Sam for warmth in a cold, harsh world.

We’re happy that Texas will pick up a couple of thousand jobs courtesy of Google, but this doesn’t mean mass manufacturing employment is coming back.

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  • ljgude

    Rumor has it that Apple will announce a “Made in the USA” product at WWDC in a fortnight. Coupled with the congressional inquiry into why Apple and Google keep large amounts of their profits overseas to avoid paying what has become the highest corporate tax rate in the world the sudden preference for domestic manufacture arouses my inner cynic. Here in Australia we have a slightly lower corporate tax rate but also very strict accounting rules that prevent companies using what is called ‘transfer pricing’ to minimize tax liability in high tax jurisdictions. At the end of the day I don’t think the US can get their hands on those overseas profits more than once, because it wont take the lawyers long to make the overseas operations of the Apples and Googles entirely separate businesses which have no US tax liability. Better to recognize that our corporate tax rates are not competitive and work out a new way to tax corporate profits.

  • twfry

    Being assembled in the US means nothing, the processor, memory, camera, etc, etc, will all be manufactured overseas because those industries already shifted out. All Google is doing is combining all the separate parts in the US, but that’s not ‘made in America’.

  • http://chicagoboyz.net/ TMLutas

    Globally, manufacturing employment is declining. That’s not changing. Those jobs that are destroyed because of automation are not coming back. But US labor is no longer the too expensive handicap it used to be when corrected for productivity so we will be seeing plenty of cases where manufacturing will be coming back to the US.

    It’s two different trends operating in different directions on the same statistic, how many people are employed in manufacturing in the US. If you want to pick a fight, you can emphasize one trend or the other, but if you want wisdom, realize that both trends have their ebb and flows internal to them and that you have to understand both to get a clue as to what is the net effect.

  • http://classicalvalues.com/ TallDave

    “Today’s tech giants seem much less cavalier about delivering such dour news to Washington.”

    No one likes visits from the IRS. Much better to be a Solyndra investor.

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