In a vast, fluorescent-lit facility, rows of workers in white and pink and blue smocks stand at workstations and snap color-splashed backs onto mobile phones. Then the handset moves down the line to the next station. Occasionally, a cheer erupts from one of the rows as work teams meet daily quotas.
High-tech assembly lines such as these are typically seen in places like Burma or Beijing. But this facility — a vast space larger than two Costco warehouses — sits in an industrial zone in this Texas city. And the workers, mostly Americans, are making history: assembling the first-ever smartphones produced on U.S. soil — for Google.
The phones are Motorola's Moto X brand, Google's latest high-stakes gamble and a first step in returning high-tech assembly jobs to the USA, according to executives at Google and Motorola, which is owned by the tech giant.
"Google is a place where we take bets," Google Executive Chairman Eric Schmidt said recently to a gathering of workers and journalists at the facility. "This is a bet we're taking on America, on Texas, on this incredible workforce assembled here. … We think this is a very, very safe bet."
He added: "This is the first of a series of steps that are going to change the perception of the United States as a manufacturing hub. … It's historic. And it's changing America."
Whether the Moto X facility sparks a resurgence in U.S.-based manufacturing remains to be seen. But it's clear the smartphone facility is the latest high-stakes gamble in what could be called the tech industry's Teflon company.
Google, which turns 15 on Friday, has become ubiquitous in the lives of millions of Americans — from e-mail and maps to searches, documents and self-driving cars. Google-owned YouTube has become the biggest video site on the planet, and its Android is the dominant mobile phone operating system, with 80% market share. Meanwhile, the mysterious Google X wing of the company is crafting forward-looking projects like Google Glass (computer-equipped glasses) and Project Loon, in which balloons transmit broadband Internet to remote regions from 12 miles in the air. Calico, which focuses on the process of aging, is an independent company wholly owned by Google.
While much-older tech rivals Apple and Microsoft fend off questions about their innovation chops, Google is as inventive and financially stout as ever. Google topped $50 billion in sales for the first time last year. Bold bets on Android, Web browser Chrome and YouTube have paid off, and the company is breathing new life into popular services like Search, Gmail and Maps.
Schmidt says the Moto X facility is a perfect example of how Google operates: an idea hatched by low-level employees that bubbled up and became a reality.
"The way Google runs is a sort of bizarre, bottoms-up innovation model, where people are encouraged to think outside the box," Schmidt told USA TODAY in an exclusive interview alongside Motorola Mobility CEO Dennis Woodside. "I'd love to say Dennis and I had the brilliant idea of doing this. But these ideas actually came from the bottom up."
But what grabs the public's fascination are big ideas that CEO Larry Page calls "moon shots" and for which Google has carved a considerable niche. Projects range from Google Glass and driverless cars to high-altitude balloons that provide Internet access to remote areas.
Such is the grand scheme at the Googleplex in Mountain View, Calif., where top engineers and designers toil on bold initiatives. "Not every moon shot turns into the next big thing, but some will," says Google board member Ram Shriram, managing partner at Sherpalo Ventures, an angel-venture investment company. "We're taking as many risks now as ever before."
Says Woodside, "Google has always made very large bets on big technological trends that are going to persist for at least a decade."
TURNING THE PAGE
Yet just two years ago, Google had seemingly lost its way, and some questioned its long-term prospects.
When he took over the company he co-founded as CEO from Schmidt in 2011, Page inherited a jumble: dozens of confusing products, a faltering stock price and growing competition from Facebook.
"They were like the land of lost toys," says Bryan Stolle, a general partner at venture-capital firm Mohr Davidow. He says Google drifted into a trap most corporate behemoths face: how to create new businesses without sucking R&D resources and detracting from its primary source of revenue — in Google's case, search.
Page has brought a sharpened focus, shuttering marginal products while stressing out-there "moon shots."
"You have to reinvent yourself but not stray from what makes you successful," says Matt Cutler, CEO and founder of Collaborate, a software company. Google, if anything, is at what industry observers call peak innovation. While search goes gangbusters, the company is accelerating its own search for cutting-edge products.
But, make no mistake, search is the engine that drives the Google machine. "Their core business is so wildly profitable and deeply defensible, they have the breathing room to be highly experimental," Cutler says.
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