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How will automation affect the reshoring initiative?

TMA Media August 6, 2019
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Harry Moser founded the Reshoring Initiative in 2010 to bring manufacturing jobs back to the U.S. In a recent interview published with MSCDirect, Moser was asked his thoughts about automation and the effect it could have on reshoring.

Question: What’s the role of automation in total cost of ownership from a trade competitiveness standpoint?

MOSER: Automation can help make up for the lack of people. China is spending three to four times more on automation than we are—especially in CNC machine tools. According to data from the Association for Manufacturing Technology, the U.S. consumed $8 billion in machine tools—and China is in the plus-$30 million range.

And the consumption of robotics in China is multiples higher than us—in a country where the wage rates are only 20 percent of our rates. They are increasing robotics and paying workers $4 an hour—and the U.S. is not competing at the same level and paying $20 an hour [an average].

The effect is that it helps increase their productivity faster and it covers up some of that increase in the wage rate. It keeps them more competitive. It allows them to not have to raise their prices on goods and ameliorates wage rates.

But to clarify, China has a skills gap issue; it too doesn’t have enough workers. They’ve done a good job shifting workers from the western rural farms to the industrial eastern cities, but they’re running out of people to shift, therefore the need and push for more and more robotics use.

But we need it too. You read the articles about 600,000 manufacturing job openings. We’re not bad, but we don’t invest enough. Look at Germany, with half the population, invests more than we do in manufacturing. Korea invests a lot more in robotics than we do.

Question: Does the U.S. government invest enough in manufacturing today?

MOSER: No. We don’t invest enough in people. We don’t invest enough in the equipment, buildings, training or in lean [manufacturing] … To me, it’s the question of when do companies invest? Companies invest when they are operating at 80 percent or higher of capacity and utilization—and business is growing and is profitable, which is happening now.

So, the way to get investment in people and things is to get to those utilization levels—and to get the price of the dollar down and use a value-added tax. But you need the skilled workforce and you need companies to be busy.

Prior to the starting the Initiative, he held leadership positions at GF Machining Solutions, formerly known as GF AgieCharmilles, where he began in 1985 as the company’s president and retired in 2010 as Chairman Emeritus.

View the whole interview HERE

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