Advantages of the Industrial, Mechanical and Manufacturing Sector : There seems to be a lot of talk in the United States about quality manufacturing jobs. However, in order to compete with other countries and low labor costs, many manufacturing companies are buying robotic systems, and installing robotic mechanical assembly lines.
It is much cheaper to invest in a robot, amortizing the cost of that equipment over a period of time, than it is to pay union workers, their pensions, and health care benefits.
Yes, I know that sounds like a cruel thing to say in this day and age, but as a business person, anyone looking to make a profit, maintain shareholder equity, and grow a business should think here. Fortunately, there is good news for industrial, mechanical, and manufacturing companies now in the United States. Orders are up, and the global economy appears to be recovering. This means that there is a product to be made, and the buyer is waiting.
The supply chain is coming back to life, and things are looking pretty good. But before you jump for joy and assume that this means more people are going back to work. Maybe you should consider what I said. Most of the manufacturing equipment purchased today is high-tech equipment, the kind that operates with fewer employees, nothing more. Sure, there will be people who will have to run many of these machines, but they don’t need hundreds, or even thousands of people to produce the same amount of goods as before.
In fact, there was a great little article recently at Industry Week entitled; “Manufacturing Technology Consumption Up 138.1% – February Consumption Amounted $329 Million” was written by IndustryWeek Staff and posted on April 11, 2011.
The article states in a teaser paragraph: “February US manufacturing technology consumption totaled $329.43 million, according to AMT — Association For Manufacturing Technology and AMTDA, Association of Machine Tool Distributors of America. This number is down 10.9% from January but up 99.3% when compared to a reported total of $165.31 million for February 2010.”
Labor costs in China are also creeping up, along with inflation there. No more people working 18 to 20 hours a day, 6 to 7 days a week. Such forced labor will never happen again. Instead of a dollar a day, these people want to live in the middle class, and that means they need to make $1,200 per year (which will increase once the Chinese currency is properly re-evaluated). Already, it went from a dollar a day to almost 3 dollars a day.
Even China is buying more automation equipment to make their factories more efficient. In many ways this would level the playing field for manufacturers around the world, but it wouldn’t be very good for jobs in any country.
So on the one hand this is good news for those in the manufacturing business, but for the many union employees who have gone to great lengths to increase their pay year after year, this does not mean that they will automatically return to work. jobs that used to be high paying. Indeed I hope you will consider all this and think about it. If you have any comments, questions and/or concerns, please email me.