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Metalworking (rec.crafts.metalworking) Discuss various aspects of working with metal, such as machining, welding, metal joining, screwing, casting, hardening/tempering, blacksmithing/forging, spinning and hammer work, sheet metal work. |
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#1
Posted to rec.crafts.metalworking
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OT disgusted with all presidential candidates
On Sat, 06 Jun 2015 19:21:45 -0400, Ed Huntress
wrote: On Sat, 06 Jun 2015 18:01:17 -0500, Ignoramus26399 wrote: On 2015-06-06, Gunner Asch wrote: Btw....the unemployment figures are growing again..particularly in places that have instituted that $15 min wage. I am convinced that $15 minimum wage is a disaster for cities that adopt them, because it will decimate low income communities through unemployment and crime. I am very interested in what happend to Los Angeles a few years after their new minimum wage goes into effect. Generally, robots will replace low income people anywhere, but not as fast as where a high minimum wage is adopted. After all, a robot can flip burgers pretty well! i If a robot can flip burgers, it won't make a damned bit of difference what humans are making in wages. They're done, whether it's in five years or five years and six months. Nothing, absolutely nothing, will stop automation. And what wages are being paid has nothing to do with it. The technology has it's own pace. But, I suspect that labour costs do have an influence on how quickly robots will be added to the work force. If the robot is, say a half a million dollars, and labour is $1.10 an hour then management looks at the robot as something to be added in the future 1 robot=155 years of labour. If labour is $15.00 an hour than the utilization of a robotic work force becomes a much more important factor. 1 robot = 11.4 years. -- cheers, John B. |
#2
Posted to rec.crafts.metalworking
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OT disgusted with all presidential candidates
On Sun, 07 Jun 2015 16:34:46 +0700, John B.
wrote: On Sat, 06 Jun 2015 19:21:45 -0400, Ed Huntress wrote: On Sat, 06 Jun 2015 18:01:17 -0500, Ignoramus26399 wrote: On 2015-06-06, Gunner Asch wrote: Btw....the unemployment figures are growing again..particularly in places that have instituted that $15 min wage. I am convinced that $15 minimum wage is a disaster for cities that adopt them, because it will decimate low income communities through unemployment and crime. I am very interested in what happend to Los Angeles a few years after their new minimum wage goes into effect. Generally, robots will replace low income people anywhere, but not as fast as where a high minimum wage is adopted. After all, a robot can flip burgers pretty well! i If a robot can flip burgers, it won't make a damned bit of difference what humans are making in wages. They're done, whether it's in five years or five years and six months. Nothing, absolutely nothing, will stop automation. And what wages are being paid has nothing to do with it. The technology has it's own pace. But, I suspect that labour costs do have an influence on how quickly robots will be added to the work force. If the robot is, say a half a million dollars, and labour is $1.10 an hour then management looks at the robot as something to be added in the future 1 robot=155 years of labour. If labour is $15.00 an hour than the utilization of a robotic work force becomes a much more important factor. 1 robot = 11.4 years. But it just doesn't work that way in practice, John. Over the years I've done dozens of stories on robots and other automation, visiting and interviewing the managers who actually are doing it. The usual scenario, in manufacturing, involves making a big operational change, usually to expand capacity or to get more production out of existing resources. That simple wages vs. investment calculation that many people think is the determinant is not it. It is so trivial, compared to the total costs and operational disruptions involved, that it hardly gets a nod. Further, implementing robots usually doesn't involve laying people off. Most often, the influence on employment is about people who are *not hired*, sometime in the future. It has a strong effect over time, but it's not a straight, immediate substitution. In services, automation is implemented mostly through IT, not through mechanical hardware. That's a different scenario and I don't have much direct experience with it. -- Ed Huntress |
#3
Posted to rec.crafts.metalworking
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OT disgusted with all presidential candidates
On Sunday, June 7, 2015 at 2:34:58 AM UTC-7, John B. wrote:
On Sat, 06 Jun 2015 19:21:45 -0400, Ed Huntress wrote: On Sat, 06 Jun 2015 18:01:17 -0500, Ignoramus26399 wrote: On 2015-06-06, Gunner Asch wrote: Btw....the unemployment figures are growing again..particularly in places that have instituted that $15 min wage. I am convinced that $15 minimum wage is a disaster for cities that adopt them, because it will decimate low income communities through unemployment and crime. I am very interested in what happend to Los Angeles a few years after their new minimum wage goes into effect. Generally, robots will replace low income people anywhere, but not as fast as where a high minimum wage is adopted. After all, a robot can flip burgers pretty well! i If a robot can flip burgers, it won't make a damned bit of difference what humans are making in wages. They're done, whether it's in five years or five years and six months. Nothing, absolutely nothing, will stop automation. And what wages are being paid has nothing to do with it. The technology has it's own pace. But, I suspect that labour costs do have an influence on how quickly robots will be added to the work force. If the robot is, say a half a million dollars, and labour is $1.10 an hour then management looks at the robot as something to be added in the future 1 robot=155 years of labour. If labour is $15.00 an hour than the utilization of a robotic work force becomes a much more important factor. 1 robot = 11.4 years. -- cheers, John B. Moron. In-N-Out Burger starts new employes at close to $11 dollars an hour. In-N-Out Burger's owner is a female and is worth over a Billion dollars. |
#4
Posted to rec.crafts.metalworking
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OT disgusted with all presidential candidates
On Sun, 07 Jun 2015 10:11:44 -0400, Ed Huntress
wrote: On Sun, 07 Jun 2015 16:34:46 +0700, John B. wrote: On Sat, 06 Jun 2015 19:21:45 -0400, Ed Huntress wrote: On Sat, 06 Jun 2015 18:01:17 -0500, Ignoramus26399 wrote: On 2015-06-06, Gunner Asch wrote: Btw....the unemployment figures are growing again..particularly in places that have instituted that $15 min wage. I am convinced that $15 minimum wage is a disaster for cities that adopt them, because it will decimate low income communities through unemployment and crime. I am very interested in what happend to Los Angeles a few years after their new minimum wage goes into effect. Generally, robots will replace low income people anywhere, but not as fast as where a high minimum wage is adopted. After all, a robot can flip burgers pretty well! i If a robot can flip burgers, it won't make a damned bit of difference what humans are making in wages. They're done, whether it's in five years or five years and six months. Nothing, absolutely nothing, will stop automation. And what wages are being paid has nothing to do with it. The technology has it's own pace. But, I suspect that labour costs do have an influence on how quickly robots will be added to the work force. If the robot is, say a half a million dollars, and labour is $1.10 an hour then management looks at the robot as something to be added in the future 1 robot=155 years of labour. If labour is $15.00 an hour than the utilization of a robotic work force becomes a much more important factor. 1 robot = 11.4 years. But it just doesn't work that way in practice, John. Over the years I've done dozens of stories on robots and other automation, visiting and interviewing the managers who actually are doing it. The usual scenario, in manufacturing, involves making a big operational change, usually to expand capacity or to get more production out of existing resources. That simple wages vs. investment calculation that many people think is the determinant is not it. It is so trivial, compared to the total costs and operational disruptions involved, that it hardly gets a nod. But I didn't say that labour cost was what drives the change over merely that labour cost may well influence it. And I think that I am probably correct that cost is a large factor that is taken into consideration. Some years ago I did some research on materials moving (conveyer belts mostly) methods here in Thailand and in the process came across some companies that were making "robots" for some of the car plants here. Labour costs would have been in the 100 - 150 baht/day range then and in every case the robots" were designed to do a single job more consistently than doing it by hand. One I remember was a robot to weld the axle tubes into a differential housing. It was faster than a human but, according to the robot maker, the importance was that it didn't make any bad welds :-) Further, implementing robots usually doesn't involve laying people off. Most often, the influence on employment is about people who are *not hired*, sometime in the future. It has a strong effect over time, but it's not a straight, immediate substitution. Again, I didn't say that. However, unless the U.S. is different from the rest of the world, the cost of making the product is a very important factor in whether the company is viable, or not, and almost without exception labour costs are the first item looked at when a company is feeling a money crunch. In services, automation is implemented mostly through IT, not through mechanical hardware. That's a different scenario and I don't have much direct experience with it. -- cheers, John B. |
#5
Posted to rec.crafts.metalworking
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OT disgusted with all presidential candidates
On Mon, 08 Jun 2015 08:00:06 +0700, John B.
wrote: On Sun, 07 Jun 2015 10:11:44 -0400, Ed Huntress wrote: On Sun, 07 Jun 2015 16:34:46 +0700, John B. wrote: On Sat, 06 Jun 2015 19:21:45 -0400, Ed Huntress wrote: On Sat, 06 Jun 2015 18:01:17 -0500, Ignoramus26399 wrote: On 2015-06-06, Gunner Asch wrote: Btw....the unemployment figures are growing again..particularly in places that have instituted that $15 min wage. I am convinced that $15 minimum wage is a disaster for cities that adopt them, because it will decimate low income communities through unemployment and crime. I am very interested in what happend to Los Angeles a few years after their new minimum wage goes into effect. Generally, robots will replace low income people anywhere, but not as fast as where a high minimum wage is adopted. After all, a robot can flip burgers pretty well! i If a robot can flip burgers, it won't make a damned bit of difference what humans are making in wages. They're done, whether it's in five years or five years and six months. Nothing, absolutely nothing, will stop automation. And what wages are being paid has nothing to do with it. The technology has it's own pace. But, I suspect that labour costs do have an influence on how quickly robots will be added to the work force. If the robot is, say a half a million dollars, and labour is $1.10 an hour then management looks at the robot as something to be added in the future 1 robot=155 years of labour. If labour is $15.00 an hour than the utilization of a robotic work force becomes a much more important factor. 1 robot = 11.4 years. But it just doesn't work that way in practice, John. Over the years I've done dozens of stories on robots and other automation, visiting and interviewing the managers who actually are doing it. The usual scenario, in manufacturing, involves making a big operational change, usually to expand capacity or to get more production out of existing resources. That simple wages vs. investment calculation that many people think is the determinant is not it. It is so trivial, compared to the total costs and operational disruptions involved, that it hardly gets a nod. But I didn't say that labour cost was what drives the change over merely that labour cost may well influence it. And I think that I am probably correct that cost is a large factor that is taken into consideration. Some years ago I did some research on materials moving (conveyer belts mostly) methods here in Thailand and in the process came across some companies that were making "robots" for some of the car plants here. Labour costs would have been in the 100 - 150 baht/day range then and in every case the robots" were designed to do a single job more consistently than doing it by hand. One I remember was a robot to weld the axle tubes into a differential housing. It was faster than a human but, according to the robot maker, the importance was that it didn't make any bad welds :-) Further, implementing robots usually doesn't involve laying people off. Most often, the influence on employment is about people who are *not hired*, sometime in the future. It has a strong effect over time, but it's not a straight, immediate substitution. Again, I didn't say that. However, unless the U.S. is different from the rest of the world, the cost of making the product is a very important factor in whether the company is viable, or not, and almost without exception labour costs are the first item looked at when a company is feeling a money crunch. In services, automation is implemented mostly through IT, not through mechanical hardware. That's a different scenario and I don't have much direct experience with it. First, yes, quality is a major reason for automating in advanced manufacturing countries. Speaking just of manufacturing, it's far ahead of direct-labor savings. In the US, as in the rest of the developed world, direct labor is roughly 10% of the cost of producing a car. It's been that way for decades. It was 12% when I started in this business, in the mid-'70s. So direct labor savings is not a big issue. Any single step of automating can save only a trivial amount of direct labor. The big motivations are quality, squeezing more out of existing resources (such as eliminating a branched assembly line, with spot-welders), expanding without the need for a third shift (always expensive and defect-prone with humans), avoiding outsourcing, avoiing hiring additional people, and so on. Direct labor savings in *existing production* is 'way down the list. It gets complicated these days because most of the part-making and subassembly is pushed down to the Tiers of the supply chain. But the same motivators apply there, as well as at the OEMs. These facts are widely misunderstood. -- Ed Huntress |
#6
Posted to rec.crafts.metalworking
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OT disgusted with all presidential candidates
On Sun, 07 Jun 2015 21:32:47 -0400, Ed Huntress
wrote: On Mon, 08 Jun 2015 08:00:06 +0700, John B. wrote: On Sun, 07 Jun 2015 10:11:44 -0400, Ed Huntress wrote: On Sun, 07 Jun 2015 16:34:46 +0700, John B. wrote: On Sat, 06 Jun 2015 19:21:45 -0400, Ed Huntress wrote: On Sat, 06 Jun 2015 18:01:17 -0500, Ignoramus26399 wrote: On 2015-06-06, Gunner Asch wrote: Btw....the unemployment figures are growing again..particularly in places that have instituted that $15 min wage. I am convinced that $15 minimum wage is a disaster for cities that adopt them, because it will decimate low income communities through unemployment and crime. I am very interested in what happend to Los Angeles a few years after their new minimum wage goes into effect. Generally, robots will replace low income people anywhere, but not as fast as where a high minimum wage is adopted. After all, a robot can flip burgers pretty well! i If a robot can flip burgers, it won't make a damned bit of difference what humans are making in wages. They're done, whether it's in five years or five years and six months. Nothing, absolutely nothing, will stop automation. And what wages are being paid has nothing to do with it. The technology has it's own pace. But, I suspect that labour costs do have an influence on how quickly robots will be added to the work force. If the robot is, say a half a million dollars, and labour is $1.10 an hour then management looks at the robot as something to be added in the future 1 robot=155 years of labour. If labour is $15.00 an hour than the utilization of a robotic work force becomes a much more important factor. 1 robot = 11.4 years. But it just doesn't work that way in practice, John. Over the years I've done dozens of stories on robots and other automation, visiting and interviewing the managers who actually are doing it. The usual scenario, in manufacturing, involves making a big operational change, usually to expand capacity or to get more production out of existing resources. That simple wages vs. investment calculation that many people think is the determinant is not it. It is so trivial, compared to the total costs and operational disruptions involved, that it hardly gets a nod. But I didn't say that labour cost was what drives the change over merely that labour cost may well influence it. And I think that I am probably correct that cost is a large factor that is taken into consideration. Some years ago I did some research on materials moving (conveyer belts mostly) methods here in Thailand and in the process came across some companies that were making "robots" for some of the car plants here. Labour costs would have been in the 100 - 150 baht/day range then and in every case the robots" were designed to do a single job more consistently than doing it by hand. One I remember was a robot to weld the axle tubes into a differential housing. It was faster than a human but, according to the robot maker, the importance was that it didn't make any bad welds :-) Further, implementing robots usually doesn't involve laying people off. Most often, the influence on employment is about people who are *not hired*, sometime in the future. It has a strong effect over time, but it's not a straight, immediate substitution. Again, I didn't say that. However, unless the U.S. is different from the rest of the world, the cost of making the product is a very important factor in whether the company is viable, or not, and almost without exception labour costs are the first item looked at when a company is feeling a money crunch. In services, automation is implemented mostly through IT, not through mechanical hardware. That's a different scenario and I don't have much direct experience with it. First, yes, quality is a major reason for automating in advanced manufacturing countries. Speaking just of manufacturing, it's far ahead of direct-labor savings. In the US, as in the rest of the developed world, direct labor is roughly 10% of the cost of producing a car. It's been that way for decades. It was 12% when I started in this business, in the mid-'70s. So direct labor savings is not a big issue. Any single step of automating can save only a trivial amount of direct labor. The big motivations are quality, squeezing more out of existing resources (such as eliminating a branched assembly line, with spot-welders), expanding without the need for a third shift (always expensive and defect-prone with humans), avoiding outsourcing, avoiing hiring additional people, and so on. Direct labor savings in *existing production* is 'way down the list. It gets complicated these days because most of the part-making and subassembly is pushed down to the Tiers of the supply chain. But the same motivators apply there, as well as at the OEMs. Yes. I went to an auto exposition, or some such name, in Bangkok a few years ago and discovered that there are Thai companies that are making such things as complete front suspension modules for export. apparently to "foreign" car makers. Re labour costs. Direct labor costs in manufacturing, may well be 10% of total cost but that is only one side of the coin. What is the labour cost factor in running a Macdonald's? Or a factory making shirts. Or an airline? Recently Thai International, who have been a drag on the government for years, got called on the carpet by the new government. Apparently told that they had to start pulling their own weight the first thing that they did was announce that there would be a reduction in manpower. 5,000 job cuts. Malaysian Airline who have apparently been factually bankrupt for years now and supported by government "loans" have seemingly been kicked out of the nest and now have to fly by themselves,. They have hired some hot-shot European Manager to save them and the first move.... cut personnel. "the carrier slashed 6,000 jobs as part of plans to recover from deadly disasters and a long run of red ink". These facts are widely misunderstood. -- cheers, John B. |
#7
Posted to rec.crafts.metalworking
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OT disgusted with all presidential candidates
On Mon, 08 Jun 2015 20:04:02 +0700, John B.
wrote: On Sun, 07 Jun 2015 21:32:47 -0400, Ed Huntress wrote: On Mon, 08 Jun 2015 08:00:06 +0700, John B. wrote: On Sun, 07 Jun 2015 10:11:44 -0400, Ed Huntress wrote: On Sun, 07 Jun 2015 16:34:46 +0700, John B. wrote: On Sat, 06 Jun 2015 19:21:45 -0400, Ed Huntress wrote: On Sat, 06 Jun 2015 18:01:17 -0500, Ignoramus26399 wrote: On 2015-06-06, Gunner Asch wrote: Btw....the unemployment figures are growing again..particularly in places that have instituted that $15 min wage. I am convinced that $15 minimum wage is a disaster for cities that adopt them, because it will decimate low income communities through unemployment and crime. I am very interested in what happend to Los Angeles a few years after their new minimum wage goes into effect. Generally, robots will replace low income people anywhere, but not as fast as where a high minimum wage is adopted. After all, a robot can flip burgers pretty well! i If a robot can flip burgers, it won't make a damned bit of difference what humans are making in wages. They're done, whether it's in five years or five years and six months. Nothing, absolutely nothing, will stop automation. And what wages are being paid has nothing to do with it. The technology has it's own pace. But, I suspect that labour costs do have an influence on how quickly robots will be added to the work force. If the robot is, say a half a million dollars, and labour is $1.10 an hour then management looks at the robot as something to be added in the future 1 robot=155 years of labour. If labour is $15.00 an hour than the utilization of a robotic work force becomes a much more important factor. 1 robot = 11.4 years. But it just doesn't work that way in practice, John. Over the years I've done dozens of stories on robots and other automation, visiting and interviewing the managers who actually are doing it. The usual scenario, in manufacturing, involves making a big operational change, usually to expand capacity or to get more production out of existing resources. That simple wages vs. investment calculation that many people think is the determinant is not it. It is so trivial, compared to the total costs and operational disruptions involved, that it hardly gets a nod. But I didn't say that labour cost was what drives the change over merely that labour cost may well influence it. And I think that I am probably correct that cost is a large factor that is taken into consideration. Some years ago I did some research on materials moving (conveyer belts mostly) methods here in Thailand and in the process came across some companies that were making "robots" for some of the car plants here. Labour costs would have been in the 100 - 150 baht/day range then and in every case the robots" were designed to do a single job more consistently than doing it by hand. One I remember was a robot to weld the axle tubes into a differential housing. It was faster than a human but, according to the robot maker, the importance was that it didn't make any bad welds :-) Further, implementing robots usually doesn't involve laying people off. Most often, the influence on employment is about people who are *not hired*, sometime in the future. It has a strong effect over time, but it's not a straight, immediate substitution. Again, I didn't say that. However, unless the U.S. is different from the rest of the world, the cost of making the product is a very important factor in whether the company is viable, or not, and almost without exception labour costs are the first item looked at when a company is feeling a money crunch. In services, automation is implemented mostly through IT, not through mechanical hardware. That's a different scenario and I don't have much direct experience with it. First, yes, quality is a major reason for automating in advanced manufacturing countries. Speaking just of manufacturing, it's far ahead of direct-labor savings. In the US, as in the rest of the developed world, direct labor is roughly 10% of the cost of producing a car. It's been that way for decades. It was 12% when I started in this business, in the mid-'70s. So direct labor savings is not a big issue. Any single step of automating can save only a trivial amount of direct labor. The big motivations are quality, squeezing more out of existing resources (such as eliminating a branched assembly line, with spot-welders), expanding without the need for a third shift (always expensive and defect-prone with humans), avoiding outsourcing, avoiing hiring additional people, and so on. Direct labor savings in *existing production* is 'way down the list. It gets complicated these days because most of the part-making and subassembly is pushed down to the Tiers of the supply chain. But the same motivators apply there, as well as at the OEMs. Yes. I went to an auto exposition, or some such name, in Bangkok a few years ago and discovered that there are Thai companies that are making such things as complete front suspension modules for export. apparently to "foreign" car makers. Re labour costs. Direct labor costs in manufacturing, may well be 10% of total cost but that is only one side of the coin. What is the labour cost factor in running a Macdonald's? 17% corporate; 24% overall for company-owned plus franchised stores. It's the 24% that you're thinking about. Technically, that's on sales, not costs, but since their profit is only around 3.5% of sales, it's almost the same number. Or a factory making shirts. You'll have to check with Bangladesh. g Or an airline? You'll have to look that one up. Recently Thai International, who have been a drag on the government for years, got called on the carpet by the new government. Apparently told that they had to start pulling their own weight the first thing that they did was announce that there would be a reduction in manpower. 5,000 job cuts. Malaysian Airline who have apparently been factually bankrupt for years now and supported by government "loans" have seemingly been kicked out of the nest and now have to fly by themselves,. They have hired some hot-shot European Manager to save them and the first move.... cut personnel. "the carrier slashed 6,000 jobs as part of plans to recover from deadly disasters and a long run of red ink". Airlines are not a good example. Their costs vary all over the map. Subsidized ones, like your example, are complex to unravel, because subsidies can be hidden all over the place. These facts are widely misunderstood. |
#8
Posted to rec.crafts.metalworking
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OT disgusted with all presidential candidates
On Mon, 08 Jun 2015 14:13:37 -0400, Ed Huntress
wrote: On Mon, 08 Jun 2015 20:04:02 +0700, John B. wrote: On Sun, 07 Jun 2015 21:32:47 -0400, Ed Huntress wrote: On Mon, 08 Jun 2015 08:00:06 +0700, John B. wrote: On Sun, 07 Jun 2015 10:11:44 -0400, Ed Huntress wrote: On Sun, 07 Jun 2015 16:34:46 +0700, John B. wrote: On Sat, 06 Jun 2015 19:21:45 -0400, Ed Huntress wrote: On Sat, 06 Jun 2015 18:01:17 -0500, Ignoramus26399 wrote: On 2015-06-06, Gunner Asch wrote: Btw....the unemployment figures are growing again..particularly in places that have instituted that $15 min wage. I am convinced that $15 minimum wage is a disaster for cities that adopt them, because it will decimate low income communities through unemployment and crime. I am very interested in what happend to Los Angeles a few years after their new minimum wage goes into effect. Generally, robots will replace low income people anywhere, but not as fast as where a high minimum wage is adopted. After all, a robot can flip burgers pretty well! i If a robot can flip burgers, it won't make a damned bit of difference what humans are making in wages. They're done, whether it's in five years or five years and six months. Nothing, absolutely nothing, will stop automation. And what wages are being paid has nothing to do with it. The technology has it's own pace. But, I suspect that labour costs do have an influence on how quickly robots will be added to the work force. If the robot is, say a half a million dollars, and labour is $1.10 an hour then management looks at the robot as something to be added in the future 1 robot=155 years of labour. If labour is $15.00 an hour than the utilization of a robotic work force becomes a much more important factor. 1 robot = 11.4 years. But it just doesn't work that way in practice, John. Over the years I've done dozens of stories on robots and other automation, visiting and interviewing the managers who actually are doing it. The usual scenario, in manufacturing, involves making a big operational change, usually to expand capacity or to get more production out of existing resources. That simple wages vs. investment calculation that many people think is the determinant is not it. It is so trivial, compared to the total costs and operational disruptions involved, that it hardly gets a nod. But I didn't say that labour cost was what drives the change over merely that labour cost may well influence it. And I think that I am probably correct that cost is a large factor that is taken into consideration. Some years ago I did some research on materials moving (conveyer belts mostly) methods here in Thailand and in the process came across some companies that were making "robots" for some of the car plants here. Labour costs would have been in the 100 - 150 baht/day range then and in every case the robots" were designed to do a single job more consistently than doing it by hand. One I remember was a robot to weld the axle tubes into a differential housing. It was faster than a human but, according to the robot maker, the importance was that it didn't make any bad welds :-) Further, implementing robots usually doesn't involve laying people off. Most often, the influence on employment is about people who are *not hired*, sometime in the future. It has a strong effect over time, but it's not a straight, immediate substitution. Again, I didn't say that. However, unless the U.S. is different from the rest of the world, the cost of making the product is a very important factor in whether the company is viable, or not, and almost without exception labour costs are the first item looked at when a company is feeling a money crunch. In services, automation is implemented mostly through IT, not through mechanical hardware. That's a different scenario and I don't have much direct experience with it. First, yes, quality is a major reason for automating in advanced manufacturing countries. Speaking just of manufacturing, it's far ahead of direct-labor savings. In the US, as in the rest of the developed world, direct labor is roughly 10% of the cost of producing a car. It's been that way for decades. It was 12% when I started in this business, in the mid-'70s. So direct labor savings is not a big issue. Any single step of automating can save only a trivial amount of direct labor. The big motivations are quality, squeezing more out of existing resources (such as eliminating a branched assembly line, with spot-welders), expanding without the need for a third shift (always expensive and defect-prone with humans), avoiding outsourcing, avoiing hiring additional people, and so on. Direct labor savings in *existing production* is 'way down the list. It gets complicated these days because most of the part-making and subassembly is pushed down to the Tiers of the supply chain. But the same motivators apply there, as well as at the OEMs. Yes. I went to an auto exposition, or some such name, in Bangkok a few years ago and discovered that there are Thai companies that are making such things as complete front suspension modules for export. apparently to "foreign" car makers. Re labour costs. Direct labor costs in manufacturing, may well be 10% of total cost but that is only one side of the coin. What is the labour cost factor in running a Macdonald's? 17% corporate; 24% overall for company-owned plus franchised stores. It's the 24% that you're thinking about. Technically, that's on sales, not costs, but since their profit is only around 3.5% of sales, it's almost the same number. Or a factory making shirts. You'll have to check with Bangladesh. g Or an airline? You'll have to look that one up. Recently Thai International, who have been a drag on the government for years, got called on the carpet by the new government. Apparently told that they had to start pulling their own weight the first thing that they did was announce that there would be a reduction in manpower. 5,000 job cuts. Malaysian Airline who have apparently been factually bankrupt for years now and supported by government "loans" have seemingly been kicked out of the nest and now have to fly by themselves,. They have hired some hot-shot European Manager to save them and the first move.... cut personnel. "the carrier slashed 6,000 jobs as part of plans to recover from deadly disasters and a long run of red ink". Airlines are not a good example. Their costs vary all over the map. Subsidized ones, like your example, are complex to unravel, because subsidies can be hidden all over the place. But, my point is/was that although labour may only be 10% of the cost of manufactured goods, it is radically different in other businesses. My wife's girlfriend started a "shirt factory" that essentially sewed pre-cut pieces of cloth together to make a shirt. 25 second hand sewing machines was the initial investment and then the salaries of the 25 girls that did the work, which was, on a shirt by shirt basis a variable. She later changed that to a fixed cost by putting the sewing girls" on a fixed rate of so much a finished shirt. (which the girls seemed to prefer also). In addition the first cost item that companies always seem to look at in a financial or business downturn seem to be "Labour". I might add, that I was the company "hatchet man" on my last position. When there was a downturn in the oil business and contract weren't being issued, I got called in and told to "look at costs". Now, I freely admit to being something of a "rabble rouser" and I used to start my list of excessive costs with the daily DHL delivery from our Singapore office to the home office in Jakarta. No longer needed for project support but still bringing the copies of the British "Football News" that our Controller read and the Christies catalogs that one of the owners enjoyed. Oh yes, and the first class air tickets used by senior management on the 50 minute flights to Singapore, and of course the air freight back for the goodies that they bought there - one of the owners used to buy breakfast cereal in Singapore and have the company ship it to Jakarta as it was "cheaper in Singapore". Strange as it might seem these items were generally overlooked and the fact that we "have four office boys" was usually the first item that was discussed - for a two story office with probably 50 employees. "Do we Really need that many?" :-) These facts are widely misunderstood. -- cheers, John B. |
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