116 3rd St SE
Cedar Rapids, Iowa 52401
As the U.S. economy rebounds from the COVID-19 pandemic, employers are turning to greater use of automation, including robots, rather than calling back workers or hiring new ones in many cases.
The trend is affecting almost every sector, including manufacturing, distribution, transportation, retail, restaurants and many kinds of personal and government services.
Airports, for example, have begun been using mobile robots to spray disinfecting chemicals on their facilities — work that janitors initially had done wearing moon suits and other personal protection equipment.
The Pennsylvania Turnpike eliminated toll collection by hand and switched to a cashless electronic system.
And Cincinnati-based Procter and Gamble, the maker of detergents, diapers, toilet paper and a cornucopia of other household goods, found that strategically adding robots to its assembly lines made it possible to keep more workers on the job — and produce more goods — while complying with social-distancing guidelines.
Orders for robots in North America, mostly the United States, surged 20 percent in the first quarter compared with a year earlier and was up 16 percent from the same three-month period in 2019 — well before the pandemic — according to the Association for Advancing Automation.
Nearly 10,000 robots were ordered in last year’s fourth quarter, the second-best quarter ever, statistics show.
Although increasing automation has long been a trend, the pandemic — as well as recent trade wars and supply bottlenecks — drove home for managers the high cost of unforeseen disruptions in production.
The World Economic Forum said last fall that 50 percent of employers plan to step up automation at their companies.
While car and car parts makers have been the dominant users of industrial robots, many more sectors today also are buying smaller mobile robots. The biggest percentage growth in robot purchases is coming from the food and consumer goods sector — a reflection of the boom in online shopping over the past year.
“COVID just highlighted that some of this may accelerate because there are potential interruptions to your businesses that you need to be prepared for,” said Mark Lewandowski, P&G’s director of robotics innovation.
Severe winter weather also brought significant supply disruptions.
In response, many sectors nationwide — in particular auto manufacturing — have begun stockpiling various parts, numerous news outlets including the Wall Street Journal and industry publications have reported in recent days. That could spell major changes for the long-standing just-in-time delivery practice of buying and warehousing only what they need for the near future and trusting the supply chain can get more in a timely manner.
Debi Durham, director of the Iowa Economic Development Authority as well as the Iowa Finance Authority, agreed those supply chain challenges are making businesses want to “bring the supply chain closer.”
“They're just having trouble getting product, and that is wherever they're sourcing material from,” Durham told The Gazette in an interview earlier this year.
The Iowa Economic Development Authority in January released a 120-page report, prepared by Columbus-based research company TEConomy Partners and titled “Seizing the Manufacturing 4.0 Opportunity: A Strategic Plan for Iowa’s Manufacturing Industry,” to get ahead of the next industrial revolution that will lead to advances as well as disruptions to manufacturing similar to those brought by previous industrial evolutions — of water and steam power; mass assembly; and computing.
The IEDA plan “is primarily focused on advancing technology adoption and utilization among Iowa’s manufacturers, (and) further addresses enhancements in the broader manufacturing ecosystem.”
“What we see is that our larger manufacturers or OEMs — original equipment manufacturers — are requiring more and more out of their suppliers,” said Jill Lippincott, IEDA's team lead for innovation and apprenticeship, told The Gazette in discussing the report.
Looking forward, all of Iowa could see automation alter between 50 percent and 61 percent of their manufacturing jobs in some way.
“For instance, we find manufacturers potentially utilizing co-bots — collaborative robots that can work alongside humans — and those are really helpful for doing some of the repetitive tasks that employees might be doing by hand, freeing up those employees so they can be working on more focused tasks,” Lippincott said.
What the new push for automation will mean for millions of Americans still idled because of the pandemic is not so clear.
Nyika Allen, director of aviation for Albuquerque, N.M., doesn’t foresee the five robots she bought last year eliminating the 50 custodial staff at the city’s two airports.
But she suggested that overall airport employment could be smaller.
Airport merchants are automating, too, with self-check stations and other touchless technology. And Albuquerque recently converted to a mechanized screening system for checked bags, rather than manual screens by workers.
“There’s less manpower behind the scenes,” Allen said.
Cedar Rapids’ largest employer, Collins Aerospace, has had technology for a touchless airport check-in process on the market for a couple years now.
One of the uses enables departing passengers to scan a code using their phone at an airport kiosk, then answer questions through an app.
Mike Kelly, a 58-year-old native of Pittsburgh with a wife and three children, made about $25 an hour, plus health insurance and a pension plan, as a toll collector on the Pennsylvania Turnpike.
Even before the pandemic, the state had intended to install a high-tech, no-cash system in 2022. But when COVID-19 shutdowns reduced both traffic on the turnpike and the revenue it yielded, the state moved up its plans by 18 months, laying off some 500 toll collectors and support staff last June.
Kelly reacted quickly. Using his own money, he enrolled in a training course to learn how to operate big trucks and other heavy motorized equipment.
Today, he’s working for the turnpike again, this time driving maintenance trucks, snowplows and other vehicles. He was reimbursed for the training. And his pay and benefits are at least equal to those from his toll booth days.
Not all his colleagues from the toll booths have bounced back like that.
Kelly Armour, 53, was angry and bitter about the layoffs.
“We gave a warm, human aspect to the job, and we were replaced by technology,” she said. “I was only essential when it suited them.”
In January, Armour, who is single and also lives in the Pittsburgh area, went to Florida to stay with her elderly father. Once she exhausts her unemployment benefits, Armour said she will use what severance she had from the turnpike. After that, she’s not sure.
“When you’re 50 years old, to start something new is troublesome,” she said.
As in past decades when mechanization and offshoring erased countless jobs, those most threatened by the latest push in automation are people with fewer skills and in tasks that are routine and repetitive.
Researchers at the International Monetary Fund, in a recent paper, reported past pandemics, including SARS in 2003 and Ebola in 2014, not only accelerated robot adoption but tended to increase inequality by displacing low-skilled workers. The COVID-19 pandemic presents a similar risk, they warned.
The demand for more automated equipment is likely to grow further as a result of more companies bringing back production to the United States.
Factories in Asian countries such as China and South Korea tend to make more use of robots than the United States, giving them a competitive advantage that goes beyond labor rates.
The effect of automation on workers, as the experiences of the two toll booth collectors suggest, is uneven.
For those who can get themselves the right training, automation can open up new opportunities.
“It creates a whole other career path for some folks,” said Matt Tyler, chief executive of Vickers Engineering, a New Troy, Mich., precision-machining company that supplies parts for the auto industry and employs about 200 people.
“We have additional engineering staff on our payroll, well-compensated folks, that are directly correlated with automation, that didn’t exist in our building 15 years ago,” he said.
Tyler is gearing up for what he foresees as a boom in production, once bottlenecks in shipping and the global chip shortage ease.
He’s already spent about $2 million this year for robots from Japan-based FANUC to make products for the Toyota Tundra and other vehicles.
In some ways Tyler said he had no choice but to automate because fewer people want to work on the assembly line for $15 an hour, which is what he pays to start.
“Had we done it manually, without automation, I’m convinced we would not have been able to find enough employees anyway,” he said.
Tyler’s company relies heavily on highly skilled workers.
For those with fewer skills, analysts see a darker future — partly because the United States has never put as much emphasis on job retraining and retention as countries such as Germany has.
In the United States, said Susanne Bieller, general secretary of the Germany-based International Federation of Robotics, there’s more of “a hire-and-fire way of doing things.”
That means less-skilled workers in this country “may suffer significant hardship as they seek new work, potentially in occupations where they have no experience or training,” MIT scholars David Autor and Elisabeth Reynolds said in a Brookings Institution paper.
“Paradoxically, having too few low-wage, economically insecure jobs is actually worse than having too many,” they said, because reducing demand for less-skilled people in low-paid jobs won’t “ultimately raise demand for these same workers in middle-paid jobs.”
Contributing to the problem for less-skilled workers is that the pandemic has wiped out countless small businesses.
That has given a bigger share of the market to larger companies, which can afford more automation and historically pay a smaller percentage of earnings to workers in favor of shareholders and owners.
“We can expect leaner staffing in retail stores, restaurants, auto dealerships and meat-packing facilities, among many other places,” according to Autor and Reynolds.
“We have to come up with other solutions,” said Melonee Wise, chief executive of San Jose-based Fetch Robotics, a large U.S. maker of mobile robots. There needs to be social protections for people who are experiencing challenges due to technology transformation.
“The fact of the matter is that we’re not going to stop using technology in general because it displaces certain parts of our work.”
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