Google To Close Its American Moto X Factory 154
An anonymous reader writes "After only one year in operation, Google's Moto X factory in Fort Worth, TX, is scheduled to close at the end of 2014. The decision to close apparently has nothing to do with Google's decision to sell Motorola Mobility to Lenovo and everything to do with poor sales numbers and high labor and shipping costs in the U.S. The factory had, at one point, employed 3,800 people. Their ranks now number at about 700. Moto E and Moto G, newer and cheaper iterations of Moto X, have sold in more profitable numbers overseas, so Google's original rationale of building phones nearer to the largest customer base to decrease time between assembly and delivery to end user will unsurprisingly force the closure of the U.S.-based factory and transfer labor overseas as well."
remove Health Care from jobs and then labor costs (Score:2, Interesting)
remove Health Care from jobs and then labor costs will come down. Out side of the usa your job does not control your Health Care
Re:As someone who... (Score:3, Interesting)
That does make sense:
1: China has a monopoly on rare earths. You get a steep discount if you make your product on their soil than if you buy the rare earths to be sent to your factory elsewhere.
2: China has steep import barriers. Remember the voltmeters which were refused import because they were a certain color, and couldn't be taken back to China? There are no "fair trade" laws... The US does not export to China for the most part, and when it is an export, it usually ends up being made on the mainland after a while, either legally, or illegally.
3: This chunk of Motorola is now Chinese owned, so it is obvious the masters want to take their toys home.
4: Lenovo has been suspected of spying before. One can't change masks and add "features" to the SoCs when in the US, but take that overseas, and that "functionality" can be easily added.
Of course, people are bashing workers and unions. The factory is in Texas, for crying out loud. This is a state where owning more than four dildos is a felony, and unions have no presence whatsoever. The going rates advertised for the Ft. Worth assembly guys hired by a sub-contractor were $12 an hour. There were no unions involved whatsoever.
China shipping costs (Score:5, Interesting)
Why is it that as a Canadian I pay some insane shipping costs but when I order stuff from Ebay/Chinese vendors I get it really fast and 1/5 the shipping price. Go figure....
Re:As someone who... (Score:4, Interesting)
1: China has a monopoly on rare earths.
1. No they don't. America's largest rare earth mine, the Mountain Pass Mine in California, is back in operation.
2. Cellphones don't actually use significant amounts of rare earths, other than Tantalum, which comes from Africa and Australia, not China.
They became tied to jobs in the US when (Score:5, Interesting)
Democrat president Franklin Delano Roosevelt tried to control the economy; During WWII he froze wages. Like any typical politician of either party, he failed to foresee the obvious and predictable response of the much-more-nimble business community. Businesses rapidly found another way to boost compensation in order to keep/attract the best employees; something the employees would happily take because it would be even more valuable than cash: "health insurance". Prior to this time, most Americans paid their health costs out-of-pocket and did not have health insurance. After the wage freeze, employees got their frozen pay PLUS health insurance (whose value was NOT TAXED) that would pay their medical bills (allowing them to NOT spend their limited and taxed cash on healthcare). Once this trend started, it proved impossible to break; now we all expect our employers to "give" us health insurance and we all expect not to be taxed for it.
This replacement-for-money (health insurance) we can "spend" getting healthcare does not "feel" like money to us and cannot be "spent" elsewhere so it becomes a driver of healthcare cost inflation. First, we do not feel financial pain when we use it (sort of like using credit cards versus cash). Second, we are insulated from rising medical prices (we are promised a benefit, not a price tag) so it has become a convenient way for the government to further tax us - by underpaying for medicare and medicaid services, which causes hospitals and doctors to shift the costs to the bills of people with private health insurance.
Obamacare will likely destroy this linkage. There's SOME poetic symmetry to one liberal Democrat undoing the economic distortion caused by a previous liberal Democrat... but that'll likely be of little consolation to the people who will no longer have an employer on their side in matters related to health insurance. Most Americans have depended upon corporate HR people spending lots of time comparing the costs and benefits of various vendors and policies, negotiating the best deals possible, and intervening when there are problems. After Obamacare fully kicks-in (probably in 2017 - it's tough to be sure given the dozens of arbitrary waivers and extensions in place) people will likely pick whatever policy looks "best" to on a government website and then when things go wrong nobody will be there to help them. Most people will probably pick policies about as well as they pick their food and thier 401K investments - which means they'll do a much worse job than their employer's HR people used to do. I actually support the idea of sparating insurance from employment, but I think it ought to have been done VERY differently and much more explicitly (perhaps by initially changing the laws so that individuals and small businesses were treated the same as big employers on health insurance (which has NOT been the case historically)