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34 responses to “Robots now cheaper than Chinese labourers”

  1. FDB

    The solution is ALWAYS more robots!

  2. Moz

    I love tying this stuff back to the world bank/development fund stuff. Yes, yes, building lawless “industrial centres” attracts industry, raises GDP and brings jobs for impoverished people… the sort of jobs that rapidly migrate to the least-cost location and vanish in a puff of smoke at the first hint of pay rises, worker rights or pollution restrictions.

    I look at it as a form of mining – you’re extracting a resource (poor people), knowing that when it’s exhausted (they’re not quite so poor) you will walk away leaving a mess behind.

    FWIW the “bicycle industry” is an interesting one for automation – and wheels especially are still assembled by cheap labour even in Australia. Wheelbuilding machines are still more expensive than people, even at the high end. And don’t think for a second that the bike you buy in your local bike shop was carefully assembled by a skilled craftsperson. They’re usually thrown together and boxed up in a cheap-labour country, then deboxed and finished by a schoolkid getting paid $4/bike. You can tell the shops that don’t do this – they charge $50 or so more per bicycle, and that shows if you comparison shop. Handcrafted bikes start at about $2000 and climb rapidly (I’ve paid $10k before, which is why I build my own now – the tooling and skills have a payback period of one bike, if you don’t have to pay for the 1000 hours to learn the skills)

  3. Craig Mc

    I think the factor driving the move to robots is more likely quality, together with increasing quantities. As the quantities of a widget you’re producing increase, managing increasing numbers of humans becomes harder. The repeatability of robots suits large production runs far better.

    Humans are far more flexible, and are much more suited to small production runs. Such products won’t be going away. Most of those Foxconn employees will probably continue to be employed by the company on other projects.

    Foxconn certainly makes a lot of specific things – the iPhone being one (selling at 40M units/year).

  4. Aidan

    Robots don’t throw themselves out of windows.

    Oh … bugger.

  5. Moz

    Craig Mc: Quality is only one factor, and I doubt it’s one that decides these things. There’s no mandatory quality reporting requirement, and shareholders don’t look at product quality in annual reports – they look at the financials.

    Quality is just another input requirement, like shiny and cheap are. Until we get to robots all the way down the idea that repeatability will go up if there are robots seems unrealistic. Maybe if there are robots doing the final QC check you might be able to more fully test every single item, and get better repeatability that way, but AFAIK that’s not what is actually done.

  6. dave

    Robot love can be fixed too…

  7. sg

    I doubt quality is a factor in this case – this is the Apple factory, right? They make high-quality products with low fail rates, and they couldn’t do that if these workers weren’t doing very good quality work to start with.

    I wonder if part of the problem is that they needed high quality factory-floor workers, and Foxconn was able to supply these but not at bargain-basement prices? In which case this story may be more about the increasing quality of robot workers than the increasing industrial power of Chinese human workers.

  8. sg

    oops, didn’t see Robert’s comment at 7 – is that really true, Robert?

  9. PinkyOz

    Well, it was bound to happen sooner or later, but there are going to be a lot of people in low paid jobs (or for that matter, no jobs at all) that are going to go without.

    Noone should really have to do a dangerous, messy or repetative job, but I still get the impression that our economies are not quite ready for it yet. Time to start thinking about what to do with all that spare labour.

  10. BilB

    Robert 11

    The figure that I heard from someone who knows, at least for their housing machining production line was a 30% failure rate which induced then to purchase some thousands of CNC machining centres to correct the problem.

    So people know, Foxconn manufactures the Apple product range. Foxconn has bought huge amounts of automation in this year, it makes sense that they will continue that inititative, and very much for CraigMc’s thinking. Quality is king with high end products in today’s world. Make no mistake, China is a huge investor in CNC automation.

  11. James Wakefield

    It would make a lot of sense to start building the world’s automated factories in a country that has plenty of raw materials, is geologically and politically stable, has vast space for enormous scale factories and warehouses, has plenty of sunshine for solar power, as well as uranium deposits for a more practical source of energy.

  12. Craig Mc

    Just for you Dave.

  13. Tyro Rex

    “Quality” is most certainly would be a factor. Most people think “quality” as being an absolute; “Apple makes Quality Products”. However in a manufacturing sense, “quality” is more about ensuring that every product you make is *the same* (theoretically), so you can minimise high-cost QA procedures (like 100% inspection!). What you’re interested in is producing a *system* that produce the same thing every time you run it – and maximising the automation of the system is one way to do that; it increasing ‘quality’, i.e. measurability, and increases the accuracy of your process estimation, decreases rework, decreases unpredictability, etc.

    Rework is a major cost in making anything. Fixing something that’s broken is terribly expensive and _cannot_ be estimated. Automation is about reducing costs through improving predictability and measurability of the process.

    Even if you can predictably and reliably measure that you’re making a fairly crappy product automatically, this is better than making a “high-quality” product that you need inspect 100% of units to weed out the not-so-quality ones (especially where you can’t trace the root cause of the not-so-quality). Because once you can predict and measure, then you can improve.

    There’s still no hope for Australian manufacturing because in my opinion Australian management culture is the laziest in the world – it is one of cover-and-blame, not predict-and-measure.

  14. Zorronsky

    ” Time to start thinking about what to do with all that spare labour.
    war fodder springs to mind.

  15. jules

    Foxcon is the place where conditions were so bad they installed nets to stop people throwing themselves out the windows.

  16. Craig Mc

    Foxcon is the place where conditions were so bad they installed nets to stop people throwing themselves out the windows.

    The company had a death compensation scheme which could well have contributed to that. They’ve stopped it since.

  17. Helen

    Those wily workers, killing themselves to get the death benefit. Money for nothing! Just goes to show some people will just go to any lengths to avoid an honest day’s work!

  18. billie

    Wasn’t there talk about workers being poisoned by the solvent used to clean cases before shipment.

    If labour costs are rising, workers compensation claims are rising, complaints about working conditions and living conditions are rising, that jeopardises you claim for making a quality product and if the product offering is stable enough to develop the robots then robotics is the obvious direction.

  19. billie

    Most modern car engines are made on automated production lines. The robots always bore the hole at the same angle to the same depth meaning that assembly is simpler, the assembler doesn’t have to judge and select the best sized bolts and gasket to seal the head [purposely exceedingly unmechanical so excuse mistakes]. Unless of course you drive a 6 or 8 cylinder a muscle car with its hand assembled engine.

    Your modern engine is reliable for 100,000 kms with no maintenance.

    Presumably Apple widgetry will similiarly benefit from further automation of the assembly line.

  20. OMG Squirrels

    Just wait until the robots begin to seize the means of production. Then we’re in for it.

  21. John D

    The sensors, control systems etc. associated with robots have advanced over the years so it is hardly surprising that the cost of robots, their flexibility and output quality have advanced over the years. So they can do more jobs, deal with situations where a piece of work is not in exactly the right position. They should also be better suited for easy change between jobs and smaller economic runs.
    My take is that the winners in this process will be countries like Aus with high labour costs and relatively small markets. The losers will be undeveloped countries who depended on labour intensive manufacturing for their initial sart on the development process.

  22. Tim Macknay

    Just wait until the robots begin to seize the means of production. Then we’re in for it.

    I recently read the old SF novel Return from the Stars by Stanislaw Lem. There is a scene where the protagonist visits a machinery recycling centre and accidently stumbles into a storage room full of robots waiting to be disassembled. They are all engaged in the robotic equivalent of dying prayers and/or paroxysms of terror, and immediately begin begging him to spare them on the basis that they are still useful, etc. It was implausible, but unsettling.

  23. dave

    Craig Mc – me and twelve million others 🙂

  24. akn

    Yes BilB and Zorronsky the best use of the unemployed is probably an old fashioned war. Preferably a low tech one as they’re cheaper. Bayonets and mass charges could be televised by embedded cameramen. No internecine trench stuff just out and out stoush. David Sillitoe’s ‘Adventures in Nihilon’ proposed that only pensioners should fight wars as their lives were pretty much redundant anyway. Maybe that would solve the baby boomer demographic crisis.

  25. Chris

    Is what is happening in China any different to what has happened previously in say Japan or Taiwan? They start out as a source for low cost workers, living conditions improve, education levels improve, wages go up, more automation introduced and people move into more skilled jobs. Most people are way better off than they used to be.

    And remember even with automation, at least at this point, someone needs to look after the robots.

  26. Chris

    Robert – I guess companies who have work that can be done by low skilled workers will be looking for countries that are reasonably politically stable and have some very basic infrastructure. Unfortunately for many African countries that probably rules them out. Many parts of India, like China are already moving on – for example you can see it in the rising cost of IT workers from India.

    I don’t think we should be too surprised – this is how it has worked in developing countries in the past, its a huge benefit of globalisation. And whilst conditions in factory jobs in China may really suck compared to conditions in Australia, they’re great compared to being a small time farmer in rural China.

    Its not like sweatshop jobs are going to disappear from China overnight, there will just be a slow migration and upgrading of jobs over decades.

  27. John D

    For business to work you not only need producers, you also need customers. While we have a system where the bulk of customer power goes to people earning money from work a single business using less workers may be smart but profits collapse if every business is doing the same thing and the customer base is disappearing.

  28. BilB

    Quite so, OMG 23.

    If Boston Dynamics ever give their Big Dog an extra arm*, broad band radar**, a nuclear battery, and Artificial Intelligence, then we will have every reason to be fearful.

    *the extra arm with which to be able to manipulate a weapon.
    **the broad band radar to be able to track down targets, even through solid objects.
    ***the only hope for us, should this all come to pass, is that California (I think it is) has directed its traffic division to draw up the regime under which autonomous vehicles (ie the car does the driving while the passengers sip martinii) will be able to acquire drivers lisenses. This means that when the BD Big Dogs run amok we will be able to flee in cars that are able to escape the carnage at ultra high speed…but without smashing into every nearby object on the way. Hollywood will be so deflated.

  29. conrad

    “if China isn’t going to be the world’s sweatshop for too much longer”

    There are exceptionally poor provinces in China, which is why the government starts encouraging (e.g., via building infrastructure) factories to move to them (or be created there), and the movement is already happening. Given this, I think the idea that there won’t be cheap labour is a long way off — most of the stories you see about pay rises are really just referring to a comparatively small demographic along the coast.

  30. Brian

    Further to conrad @ 33, I recently heard that the Chinese ‘middle class’ was 60m, equivalent to the population of France, on an average of about $20k pa. Industries were shifting further inland where there was another 200 million rural workers to be absorbed.

    That’s how I remember it.