Foxconn Runs into Trouble Deploying Robot Replacements for Human Workers
December 11, 2012 12:48 PM
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High costs and changing technology were cited as two main hurdles
Foxconn would love to eliminate its worker woes by
deploying a full fleet of robots
to do the work instead, but this venture may be trickier than previously thought.
Foxconn, which is the trading name for Hon Hai Precision Co. in China where devices like the iPhone and iPad are made, hopes to replace all 1.5 million of its workers with robots in the future, but issues like changing technology and high costs are putting delays on the project.
Hon Hai Chairman Terry Gou said in 2011 that he wanted 300,000 robots installed by the end of 2012 and a total of 1 million by 2014. However, in June of this year, it was apparent that those targets weren't going to happen. Instead, he hopes to have "monotonous" tasks eliminated through automation within a few years and fully automated plants in five to 10 years.
The issue? For one, the cost to install that many robots would be very high. According to
The Wall Street Journal
, Foxconn would have to spend anywhere from $2.1 billion to over $10 billion for fully automated plants, depending on the type of robots used. Foxconn's traditional capital spending is below $3 billion.
In addition to cost, technology is ever-changing, and keeping up with the production cycles of different products would take more time than having humans perform the same task. For instance, once you've finished stabilizing the process for one product, it's already time for a new product to roll down the line.
Just last month, it was announced that at least
one Foxconn factory in China received 10,000 robots
for the purpose of replacing human workers. These robots, which were manufactured in house and called "Foxbots," are capable of doing simple tasks like lifting, making selections and placing items where they belong. They will act much like assembly line robots. According to
, each robot costs about $20,000-$25,000.
The whole point of Foxconn's robot replacement program is to rid itself of the troubles that come with having human workers. Foxconn has been under the microscope since 2009 for various troubles like worker suicides, explosions in the plants due to aluminum dust build-up and other unsafe working conditions, riots, excessive overtime, low pay, etc.
The company came under fire earlier this year when
The New York Times
published a massive article
on the working conditions of Foxconn factories. Apple was also targeted because the report mentioned Apple's lack of action when receiving reports on these poor working environments and overtime/pay issues.
Foxconn gave employees a pay boost earlier this year and is cleaning its act up slowly but surely to comply with audits.
The Wall Street Journal
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RE: Welcome to incorporation 101
12/14/2012 12:47:17 PM
It's a different world today.
Jobs only shift fast enough if there's something else for workers to do. In the 1900's or even the 1970's, we didn't have nearly as developed of an economy as we do today.
Today, people with high disposable income simply aren't asking for enough to be built. They just want to hold onto their money. Even in the 80's, 90's, and 2000's, they weren't asking for enough, and instead lent money (via the banks) at an astronomical rate to others so that they could buy more houses, cars, etc. Unfortunately, that free ride is over.
That's why robots are now stalling job growth instead of increasing output at past rates. They're reducing the total hours society needs to work to satisfy its needs, which should be a good thing, but we're not handling it very well.
"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs
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