Robot army to lead manufacturing revolution

Robot army to lead manufacturing revolution

Summary: Following moves by Foxconn to replace workers with robots, market watchers say Asian manufacturers may well follow suit for low-level, high-volume and repetitive tasks.

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TOPICS: IT Employment, CXO
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Higher wages and government regulations will increasingly push manufacturers including those in Asia to replace human workers with robots, say industry watchers, after major Chinese manufacturer Foxconn announced plans to do so. Labor groups, however, bemoan the disregard for worker concerns.

Labeled the "world's manufacturing engine", Foxconn assembles products which have underpinned the success of some of the world's most recognizable technology vendors including Apple, Sony, and Hewlett-Packard.

However, it recently earned recognition as a "suicide factory" after at least 16 workers Foxconn workers since 2010 took their lives at its Shenzhen campus, which houses almost 400,000 workers.

Earlier this month, the Chinese manufacturer made headlines again when it revealed plans to replace its factory workers with a million robots in a bid to improve efficiency and address rising labor costs. The company's founder and chairman, Terry Gou, said its robot count was expected to grow 100-fold from 10,000 to 1 million over the next three years.

Next year will see 300,000 robots in operation, a move Foxconn said would promote its human staff of about 1.2 million workers higher up the value chain. However, it dodged questions about the number of workers expected to be affected by the move and played down attempts to connect this with the uproar over the suicides and poor working conditions.

According to Gartner's principal research analyst, Jamie Wang, Foxconn is responding primarily to increasing pressures on the bottom line which stems from higher wages and government regulation over the maximum overtime hours and underage workers.

Wang added that the most logical solution is to replace humans with robots to complete low-level, high-volume, repetitive tasks such as soldering.

This activity is not limited to Foxconn, noted Amitendu Palit, visiting senior research fellow at the National University of Singapore's Institute of South Asian Studies.

The practice has been successfully exploited by American, British and Japanese manufacturers for decades, Palit said, and is a growing practice in emerging markets such as China, India and Thailand.

The trend is likely to increase as Asian attempt to compete on a global scale, he said.

"This might well be a long trend given that employment of robots across Asia is increasing," he explained. "Japan is no longer the only Asian nation engaging robots. The trends are rising in Korea, Taiwan, China, and even India and Thailand."

"It may not be a necessity. It all depends upon what kinds of activities are being visualized for global expansions. For volume-driven manufacturing operations, they are a possibility. But the role of robots would be much less in value-additive, knowledge-intensive operations in high-skilled services," he noted.

Activists: Profits over employees

Labor groups, however, are crying foul over Foxconn's decision.

According to Debby Chan, officer at worker rights group students and scholars against corporate misbehavior (Sacom), the move to replace workers with robots is just another example of the Chinese manufacturer's primary motives to elevate profits above the concerns of workers.

For years, Sacom actively campaigned for a solution to issues affecting Foxconn workers and conducted several investigations which received worldwide attention.

Chan said Foxconn regularly deceived workers and the public and this move was purely aimed at reducing wages bill and ultimately, its workforce would be downsized.

"Profit maximization is always the foremost concern of Foxconn," she said. "I am not surprised Foxconn will use robots to replace workers if it can cut down the production cost. The relocation of Foxconn to inland China serves the same purpose despite the company claims it is for the benefits of workers."

"And I don't think the move can resolve the problem of suicide if there is no genuine commitment to reform the management methodology," she added. "As long as Foxconn is hiring workers, they should be treated in a fair way, including being respected."

"Unfortunately, Foxconn does not care about the grievances of the workers."

Union organizer, Ellen David Friedman, said the decision to hire robot workers validated the widely held assumption among Foxconn employees that they were just another brick in the wall. Having worked as an organizer in the American manufacturing and automotive sector, Friedman has taken an interest in the working environment in China which had evolved from its communist roots into a socialist-capitalist hybrid.

Describing the move as "heartless", even for Foxconn, she said: "The comments one heard from workers during the period of suicides was, 'I felt like I was just a machine in the factory'.

"So Foxconn, in some sense, just affirmed that highly alienated position by saying, "Yes, you are the same as machines and we are now going to just replace you with machines."

The real issue, however, points back to how Foxconn, as a "mega-employer", is accumulating so much economic and political capital in China that it rivals the government in terms of its impact on the daily lives of Chinese citizens, she noted.

Friedman said: "Just as we have seen the growth of global giants in retail (Wal-Mart), services (Google), resource extraction and refining (Exxon, Rio Tinto), and so on... We can see Foxconn becoming a giant.

"Giants have a unique accumulation of economic and political power which actually rivals state power, and this is also evident with Foxconn in, for example, its ability to negotiate directly with provincial Education Ministries to establish vocational schools that will directly supply labor to their factories in several inland provinces.

"What this means for the Chinese people is that there is yet another colossally powerful bureaucratic presence dominating their lives, setting the terms of prevailing wages, working conditions and social life for a million people and their families and communities," she concluded.

Mahesh Sharma is a freelance IT writer based in Australia.

Topics: IT Employment, CXO

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