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  • Aug 30, 2014
  • Updated: 11:10pm
BusinessEconomy
MANUFACTURING

Owners looking at robots to replace workers prone to rioting

As the example of Detroit clearly shows, people power is easily swapped for machine power

PUBLISHED : Tuesday, 27 May, 2014, 1:34am
UPDATED : Tuesday, 27 May, 2014, 1:34am

Hearing that Vietnamese factory workers were rioting and breaking up machinery reminded me of a documentary film I viewed last year about blue-collar discontent in the United States some 40 years ago.

The film, Finally Got the News, was made in the early 1970s by a fringe labour group in Detroit. Grainy footage shows a number of labour leaders and professors, all turtle necks and tobacco, discussing the purported power that the working man had to shut down America.

As the truck drivers and ditch diggers, the steel makers and car workers, they comprised the "foundation stone of industry" - if they stopped working the system would "cease to function".

Jobs do not just migrate to new locations. They also increasingly go to robots

We know today that these labour leaders overestimated their power. Detroit is a bankrupt ghost town, with few jobs left in manufacturing. Jobs were shipped overseas, either directly through outsourcing or indirectly by cheaper imports from countries with lower cost structures.

Many of those US jobs migrated to Asia, chasing and developing various low-cost destinations, before moving on again as costs and worker demands inevitably rise over time.

While Vietnam's recent riots began as an expression of anti-Chinese political rage, they quickly morphed into rampages against any factories, no matter the nationality of the owners.

We have seen worker anger boil over elsewhere in the region, including violent confrontations at factory gates in China, or protests by guest workers in Singapore and by textile workers in Bangladesh.

Jobs do not just migrate to new locations. They also increasingly go to robots.

The Detroit film showed footage of workers lifting heavy equipment on a car assembly line as a soundtrack played of an American-style blues song, Please Mr Foreman, Slow-Down-The-Assembly-Line.

Today cars is one of the most mechanised industries. Robots can do a lot of things, but what owners particularly like about them is that they don't sing the blues, or riot.

The biggest factory employer in China, Foxconn, not only plans to install up to a million robots at its plants in China and Taiwan - which currently are staffed with more than a million workers - but hopes to produce its own robots, in-house.

These plans were hatched after a period of costly labour-management confrontations.

For all the bluster of Foxconn founder Terry Gou, however, few robots are dominating his company's assembly lines just yet. Indeed, the rhetoric may simply be a way of tempering worker demands. The economics of refitting Foxconn's facilities with automated assembly lines does not add up at this stage

But this is not for lack of trying.

China has earmarked robots as one of the industries of the future, and is throwing a lot of money in that direction. The city of Guangzhou, for instance, offers subsidies of up to 500,000 yuan (HK$628,000) for firms that install automated manufacturing equipment.

Other municipalities in China are looking to cash in on the expected global surge of demand for robots. Chongqing has a dedicated industrial park for "smart" and automation-related industries, which it hopes will turn out more than one million robots a year by 2020.

The wholesale replacement of workers with robots is unlikely to occur too rapidly, however, because of the daunting retraining task involved. The machines still need human overlords.

Ilian Bonev, a manufacturing robotics expert at Canada's ETS, says China's robot-engineering research capabilities are deepening, but that on-the-ground experience is limited.

"Who will operate China's thousands of industrial robots?" he asks. "Exceptionally few engineering students work with real industrial robots in universities."

That said, Bonev thinks China is more interested in helping its robotics industry, rather than artificially preserving low-qualification jobs. Thus we will continue to see a lot of resources poured into the sector.

In Bonev's view, the car industry will be the most important user of industrial robots in China in the short term, followed by the semiconductor industry, the electronic device sector and the food industry.

Which leaves us with the question of whether today's angry factory workers will be redeployed into higher-valued added positions, or in service jobs elsewhere in the economy.

Or will they be left high and dry like those former factory workers in Detroit, a city that currently has a 15 per cent unemployment rate?

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