MakerBot to shutter Industry City factory, move manufacturing to China

3D printer manufacturer MakerBot will move its much-ballyhooed U.S. manufacturing operation to China, CEO Jonathan Jaglom announced in a press release Monday.
“Manufacturing in Brooklyn is expensive,” MakerBot spokesman Johan Broer said by phone this morning. “3D printing is an emerging market and as such is very volatile, and we saw that particularly last year. … It’s a very competitive market, a global market, and saving costs will make us more competitive.”
Jaglom and Broer said the move will save the company money and add flexibility, in large part by laying off its higher cost American workers. MakerBot will transition the work of manufacturing its printers out of house, to the American company Jabil, which operates plants in China.

“This will allow us to scale up or down,” Broer said. “They can easily add a line or a couple lines and that’s not possible for us with our own factory.” See also: Apple and Foxconn.

Broer would not confirm how many people MakerBot employs nor how many would be laid off. He noted that the move only affects the manufacturing side, located in Industry City, while managerial, administrative, legal, marketing and other parts of the company would remain intact in the firm’s Downtown Brooklyn office.

We reported last year that MakerBot employed about 450 people, though it has undergone layoffs since then. Broer would not discuss the company’s lease with Industry City, except to say that the two entities are working through the details, and that the changes would not be final until likely the end of the year.

Jaglom, the CEO, is no stranger to Asian manufacturing. Prior to joining MakerBot, he worked as the general manager for Stratasys’s Asia operations. Stratasys bought MakerBot in 2013. In an interview with us from last July, shortly after he took over, Jaglom talked about his Asia experience:

Now that Jaglom, 39, is in the driver’s seat at MakerBot — he was appointed CEO in March and left Hong Kong for New York City in April, he’s staying true to his instincts about the importance of the Asian market. One of his first decisions in his new role was to place MakerBot’s Asia operations under Stratasys to capitalize on Stratasys’ established presence in Asia and to motivate Stratasys to sell MakerBot products by making those sales a performance metric.

The move is not good news for Brooklyn.
MakerBot is one of Industry City’s largest tenants and has been put forth as an example of the kind of urban manufacturing revitalization Industry City says will take root. There is still plenty of good news in the Brooklyn tech economy, but this is an example that supply and demand are unforgiving bosses.