As we come out of the Covid-19 pandemic – which was more like a controlled demolition of small businesses, followed by a mismanaged, taxpayer-funded cocaine binge that dropped vicious inflation on our laps – more and more industries are turning to robots as they struggle to hire enough workers to fill mounting orders.
According to the , orders for workplace robots increased by 40% during the first quarter of 2022 vs the same period in 2021, a according to the Association for Advancing Automation – the robotics industry’s trade groups.
The explosive growth follows a 22% increase y/y in 2021 after years of stagnant growth, according to the group.
“Before, you could throw people at a problem instead of finding a more elegant solution,” said Joe Montano, chief executive officer of Delphon Industries LLC, a maker of packaging for semiconductors, medical devices and aerospace components.
Montano told the that Hayward, CA-based Delphon lost 40% of its production days in January after Covid-19 worked its way through their workforce. So, they bought three additional robots to fill the gap. The company began leasing robots around four years ago, which has since grown to 10 robots – four of which work side-by-side with employees.
According to Montano, two robots reduced a three-person printing crew to one, saving $16,000 per month in expenses.
“We haven’t reduced any head count, but we reassigned them to where we needed people,” Montano claims.
The United States has been slower to embrace robotics vs. other industrialized countries such as South Korea, Japan and Germany, according to the International Federation of Robotics. In North America, they have primarily been used in the automotive industry performing repetitive tasks such as welding.
Now, companies such as Austin, TX-based Athena Manufacturing, a fabricating and machining company in the semiconductor, energy and aerospace industries is turning to robots, after CFO John Newman said the company has struggled to find enough workers to staff a second weekday shift and a weekend shift.
The company has bought seven robots over the last 18 months, including one that grinds steel frame-welds on equipment that holds semiconductors. According to Newman, Athena has spent over $800,00 on robots, including $225,000 on the grinding unit. He says that the investments have improved Athena’s ability to fulfill orders more than lowering costs. What’s more, the grinding robot takes just 30 minutes to do what a human took around three hours to compete. It also doesn’t have a union, a 401(k) to match, or catch Covid-19.
“The robot doesn’t stop to rest, and that’s understandable for a human because it’s a hard job,” said Newman, who added that the grinding robot can apply more force with a grinding tool than a human can.
“The robots are becoming easier to use,” according to Michael Cicco, chief executive officer of Fanuc America, a subsidiary of Japan’s Fanuc Corp, a major supplier of industrial robots. “Companies used to think that automation was too hard or too expensive to implement.”
So what’s likely to happen? MIT economics professor Daron Acemoglu thinks the shift to automation will lead to an oversupply of human labor that will drive wages lower, unless other industries can absorb the displaced workers.
“Automation, if it goes very fast, can destroy a lot of jobs,” he said. “The labor shortage is not going to last. This is temporary.”