Apple supplier Foxconn replaces 60,000 workers with robots

AppleInsider

Apple's primary manufacturing partner, Foxconn, has replaced 60,000 people with robots at a single factory in Kunshan, China, a report said on Wednesday.

The factory's workforce shrunk from 110,000 people to just 50,000, the South China Morning Post said, noting that as many as 600 companies in Kunshan have similar plans. It's worried that automation could potentially have a devastating impact on the region's population, comprised mostly of migrant workers.

Foxconn has been working to deploy robots in its factories for some time. Although each machine is expensive upfront, the benefit to management is reduced labor costs, which can in turn mean stable prices for client electronics corporations like Apple.

The Post did not say what Foxconn manufactures at its Kunshan plant, but last year companies in the area are said to have built approximately 51 million laptops and 20 million smartphones.

Foxconn factories are likely to become increasingly automated, not only in an attempt to stave off the impact of better Chinese labor standards, but also to keep up with Apple demand, since Foxconn regularly hires extra labor en masse to prepare for iPhone launches.

Apple itself has become more invested in robotics. In March it unveiled a robot called "Liam," designed to quickly and efficiently tear down devices for recycling.

am8449

If manufacturing becomes more automated and relies less on human workers, is there any reason to continue to do it in China?

gatorguy

FWIW Foxconn's robotics partner was reported to be Google. 

Per the WSJ several months ago:

"...the partnership makes sense as Foxconn, the world’s largest contract manufacturer of electronics devices, can provide Google the best testing ground for its new robotics technology. They said Google is expected to build a new robotic operating system for manufacturers, just like the Android operating system for mobile computing devices. A successful robotics operating system would further strengthen Google’s position in the technology industry.

“Foxconn needs Google’s help to step up automation at its factories as the company has the lowest sales per employee among the contract makers, given its large workforce,” said Wanli Wang, an analyst at CIMB Securities. “Using robots to replace human workers would be the next big thing in the technology industry."

edited May 2016

thewhitefalcon

am8449 said:

If manufacturing becomes more automated and relies less on human workers, is there any reason to continue to do it in China?

Depends on where the raw materials come from.

mtbnut

So the "They're exporting jobs to China!" party line is now moot? 

antonpablo

Fast food chains will be doing the same cause of $15/hr minimum wage.

cali

Who wants to bet tech sites will somehow find a way to blame Apple? Even after the hypocrites solely blamed Apple for employee abuse.

rob53

AppleInsider said:

Foxconn factories are likely to become increasingly automated, not only in an attempt to stave off the impact of better Chinese labor standards, but also to keep up with Apple demand, since Foxconn regularly hires extra labor en masse to prepare for iPhone launches.

An added benefit with be analysts lack of ability to use mass hiring and firing as a way to manipulate AAPL stock. They'll have to look at Foxconn capital purchases as a way to estimate (guess) how much capacity each facility has but even that won't help determine how many robots are working on which devices. 

rob53

thewhitefalcon said:

am8449 said:

If manufacturing becomes more automated and relies less on human workers, is there any reason to continue to do it in China?

Depends on where the raw materials come from.

You're correct. Here's a pdf from the Minerals Education Coalition showing what minerals are used in cell phones (iPhones and others) and where they come from (dated: 2012, I hope there isn't any asbestos in iPhones). Look at everything coming from China, http://www.mineralseducationcoalition.org/sites/default/files/uploads/cell_phone_activity_0.pdf. I would think labor continues to be the highest costing individual expense and replacing some of that cost with robots should help stabilize that cost as well as hopefully increase the build quality.

lkrupp

am8449 said:

If manufacturing becomes more automated and relies less on human workers, is there any reason to continue to do it in China?

Bring some back to the U.S. Of course those jobs will be high skill, high pay, so no, minimum wage McDonalds workers won’t be assembling iPhones any time soon.

deadpool

am8449 said:

If manufacturing becomes more automated and relies less on human workers, is there any reason to continue to do it in China?

It's been a long time since just labor costs was the primary driver for Apple doing their manufacturing in China.  These days supply chain efficiency and the ability to rapidly ramp workforce (and subsequently quickly wind it down) are far more important than simply paying a worker a few ducats less per hour.

blastdoor

am8449 said:

If manufacturing becomes more automated and relies less on human workers, is there any reason to continue to do it in China?

It depends on how one defines the words "more" and "less." In this instance, a factory with 50,000 people still is pretty labor intensive and probably does make sense to stay in China. If that same factory gets down to a couple of hundred humans who mostly troubleshoot and program robots, then sure -- it could probably move to a higher-cost company. Even then, though, it might not since there are other considerations like the location of suppliers. 

1983

I think increased automation is technically a good thing. But what about those 10s of thousands of workers? What becomes of them and their families? If more and more companies like Foxconn do this, which seems to be the trend, isn't this going to end up in mass unemployment, riots and calamity?

edited May 2016

paxman

deadPool said:

am8449 said:

If manufacturing becomes more automated and relies less on human workers, is there any reason to continue to do it in China?

It's been a long time since just labor costs was the primary driver for Apple doing their manufacturing in China.  These days supply chain efficiency and the ability to rapidly ramp workforce (and subsequently quickly wind it down) are far more important than simply paying a worker a few ducats less per hour.

Which means as robotization takes a hold production can move to the US or wherever it is required in order to get a foothold in a market (India). There is no doubt that robots will take over jobs like iPhone assembly and even though I would like everyone in the world to have a job to pay the rent, assembling iPhones under pressure is no my idea of a satisfying job.

wood1208

Way to go. Less of labor union and Government human related headache. No pay, no medical benefits, no Social-security, no 401K contribution. no complain about workplace hazards, discrimination, law suits,etcetcetc. Man we should employ robots in Government services. Apple needs to brig back manufacturing to USA and all robotics based.

edited May 2016

maestro64

I have not read that China has changed its rules around automation. China will not allow something to be automated if a human can actually do the work. Generally the only way they allow automation or robots is if you can show a human can not do the work, even then you may be required for a human to be involved like pressing a button to make the robot begin the work. I was in HDD factor in China and elsewhere and the entire manufacturing process of HDD today is completely automated it is almost completely lights out production. In China they still had people sitting at the machine watching what it did and pressing buttons which is not really needed. All the companies in China told me they are required by the government to maintain a person. China is about workers and keeping them working.

If Foxconn is allowed to do this, something else must be going on. I heard most factories in China are having a hard time finding workers especially ones which want and can do this kind of work. It the problem of the one child rule and those who grew up as a single child are not having kids themselves. It looks like China is loosing its labor force. Unlike the US where people do not want to work unless they get CEO pay.

farmboy

antonpablo said:

Fast food chains will be doing the same cause of $15/hr minimum wage.

Nah. Australia raised their minimum wage a big amount, and despite all the furor, it raised the price of a Big Mac about $0.45. The gloom-and-doomers are full of it. You can pay a lot of workers a lot of hours before you get to the cost of robotics for a burger job.

zoetmb

am8449 said:

If manufacturing becomes more automated and relies less on human workers, is there any reason to continue to do it in China?

Exactly.  But the question is who is designing and building the machine tools?   Is it Foxconn or some other company.  Could Apple buy those same tools?   Does Apple have the expertise and resources to build them?

I'm also surprised that the Chinese government would permit such massive layoffs.  The last thing they want is 50,000 + angry workers.  

gatorguy

zoetmb said:

am8449 said:

If manufacturing becomes more automated and relies less on human workers, is there any reason to continue to do it in China?

Exactly.  But the question is who is designing and building the machine tools?   Is it Foxconn or some other company.  Could Apple buy those same tools?   Does Apple have the expertise and resources to build them?

I'm also surprised that the Chinese government would permit such massive layoffs.  The last thing they want is 50,000 + angry workers.  

I'd read elsewhere some time back that FoxConn was building the "robots" themselves but partnering with one of the big techs on the software to run them. 

ktappe

mtbnut said:

So the "They're exporting jobs to China!" party line is now moot? 

Someone has to build and maintain those robots.

cmd-z

So, who's building (and maintaining) the robots?