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Foxconn CEO Backpedals On Planned Robot Takeover
itwbennett writes: For years now, Foxconn has been talking up plans to replace pesky humans with robot workers in its factories. Back in February, CEO Terry Gou said he expected the automation to account for 70 percent of his company's assembly line work in three years. But in the company's shareholder meeting Thursday, Gou said he had been misquoted and that "it should be that in five years, the robots will take over 30 percent of the manpower."
Does this mean we can hold off on the glorious workers revolution?
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Foxconn executive: "We'll have a black factory in 3 years!"
Communist Party: "If you do that, all your people will be unemployed, and instead of slaving away at a phone factory, making useless crap for American idiots, we'll have people available to protest our mismanaged government"
FC: "Not my problem"
CP: "Gulag."
FC: "We'll have a 30% robot presence in 5 years!"
Heh. A country trying to keep a lid on slowing growth, and growing unemployment doesn't like news that says. "Oh hey. One of our biggest high tech employers plans dumping a whole lot of good paying jobs, exactly when we need them hire more and not less"
It's going to happen. Don't worry about that. Replacing the fleshy robots with metal ones in highly automated mass production makes sense. Now they're just going to lie about it and employ some tricks to keep up appearances.
For that mater I would not worry about China in the future, at least not as they are right now. Their system of governance is highly inefficient and rife with corruption. It's long been said that there country will collapse without 10% year-on-year growth and they've not seen that for a while now.
Rapid growth lets you gloss over lots of nasty systemic problems, but infinite growth is not possible.
Foxconn has factories i 14 countries.
It's harder to use robots than it sounds. Much harder.
Yes, but when it comes, it will be spectacular.
Nae king! Nae laird! Nae yurrupiean pressedent! We willna be fooled again!
But how are you ever going to get married?
Homer simpson weds you, I'm sure of that!
Someone just informed him robots cost more than slaves.
Foxconn is one of the most NRE allergic companies I have ever seen. Unless you, as a customer, are willing to pay the NRE for machines on their assembly line for your product, they will attempt to use the most backwards, insanity inducing flow that can be conceived of. And you will say "Hey, there's a machine for that", and they'll say "Sure, for x amount we'll do that!". And so the negotiations begin, and in the end you realize you're paying for them to build up their factory. While you will both simultaneously make profit anyway, it is entirely because the labor is so cheap, and the environmental regulations so lax, that what you're really doing is hurting your own country to make some other people very rich at the expense of just about everyone else.
Then, if you are smart, you quit your job and leave the field. If Foxconn says "no robot labor" it must mean that some major customer has decided he is not going to pay for it. The idea that the Chinese government is actually protecting its labor is asinine, but they certainly do love the press that makes it seem like it.
Where is "here"? Retard country? Must be, because only a complete and utter retard would be dumb enough to think that's a valid comparison. :)
Hahahaha oh god you conservatives are fucking stupid, it's so goddamn funny. :D
The problem with the notion of high automation in China is that China has a large supply of relatively cheap labor. It may not remain cheap forever but for the immediate future it will be cheap. Therefore the economics of widespread automation in a place with cheap labor become rather dicey.
Automation really only makes economic sense in a few circumstances:
1) When production volumes are high and labor is relatively expensive and capital is relatively cheap
2) When manual labor cannot achieve the requisite quality/consistency
3) When there are substantial safety issues that cannot be otherwise mitigated
Some of what Foxconn does would make sense to automate but given how inexpensive labor remains in China much automation would be terribly difficult to economically justify in many cases. My company does assembly work (wire harnesses) and even with relatively expensive US labor we have a difficult time justifying automation in a lot of cases. I could buy a machine for $1 million that would build some of our products completely automatically with just one operator required. But we would have to have production volumes in the hundreds of thousands at minimum to justify the purchase and we would need access to credit at reasonable rates. If we had the labor rates Foxconn has the production volumes would need to be in the many millions to justify. And Foxconn makes more complicated products than we do.
Australia.
As an engineer who works developing flexible automation solutions, this stuff is hard and it is expensive. Sure, it is worth it for companies in North America and Europe (our main customers) because people are even more expensive. But in countries like China and India, this is more of a prestige thing than an actual business case because people are cheap and flexible solutions are not.
Now, I say flexible because the problem with industrial automation is cheap or flexible, pick one. We can easily make a machine for cranking out a product, maybe even a for a family of products. However, if it is a low demand part or worse, is not expected to be around in 10+ years, that machine will be a large useless paperweight. Those that come to us are looking for solutions for when the next product is here, they can hire an engineer to reconfigure to make it work.
My guess, this guy make a prediction without knowing the reality of actual automation and was forced to eat his words.
Slow Down Cowboy! It's been 1 hour, 47 minutes since you last successfully posted a comment
The first 3 rules are 'no puftas'.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
it is entirely because the labor is so cheap, and the environmental regulations so lax, that what you're really doing is hurting your own country to make some other people very rich at the expense of just about everyone else.
Debatable. Your environmental argument is stronger than your labor argument for technical reasons, rather than reasons of rhetoric; it is the technical reasons which concern me.
Realize every cost in every product or service you buy is human labor. Profit margins come on top of human labor. This works out in aggregate, which is important for many reasons: in major aggregate, bulk purchase agreements are bound by this human labor cost and nothing else.
Consider you make steel automobile frames, which use refined steel, which is processed from coal and steel ore. Humans mine coal and steel (it's complex enough, let's ignore the cost of machines, tools, and fuel at the mining level), which mining companies sell to the refinery; humans refine steel, which the refinery sells to you.
When you buy steel, you pay a mark-up on refined steel above its material and labor costs. The refinery buys coal and steel ore as material, which the mining companies mark up above their human labor costs. In aggregate, the price of your automobile frames includes your mark-up, the steel mill mark-up, and the mining company mark-up; while the cost includes the raw human labor and nothing else. Put the mark-up and human labor together and you get the price.
GM orders 100 million automobile frames from you. For this, you negotiate with your steel refinery for 100 million units of refined steel. For this, the refinery negotiates a massive ore and coal order from the ore and coal mining companies, respectively. These large orders provide a big profit opportunity: rather than mark up $100/ton, the mining companies mark up $1/ton, selling millions of tons of material they wouldn't have normally sold, profiting millions of dollars they would never have gained if you went elsewhere. You refine the ore into steel for frames, and charge a $1 mark-up on that instead of the usual $100 mark-up, which, with 100 million frames, nets you $100 million of profit.
That's just business. You know about bulk ordering; I will explain an important factor here.
Supply-and-demand suggests this high demand will drive the prices up, yet it drives prices down. That's because supply-and-demand doesn't account for market negotiation; we shoehorn competition here. Regardless, another mechanism is at play: labor cost.
Say coal costs $200/ton to extract, because you get a 10 tonne block of coal by an hour of effort from 200 miners making $10/hr. If you try to increase supply, the next best mines--the ones not being tapped right now--supply blocks of 75% rock and dirt mixed with 25% coal, meaning 200 miners still cost $2000 to pull that block out of the ground, but it only has 2.5 tonnes of coal--it costs you $800/tonne, plus cost to sift and refine the coal out. Existing coal companies can raise prices up to about $800/tonne without worrying about a new competitor showing up with a source of cheap coal (actually higher, because they can significantly undercut and bankrupt any new competitor immediately).
Invent new tools and new mining techniques.
In this new process, the labor involved in tool production, tool maintenance, mine planning, managing, and executing tallies up to about an hour of 100 laborers averaging $10/hr to pull one 10-tonne block of coal from the ground. That means it costs $100/ton for coal.
When someone comes along and says they want 10 million tonnes of coal, you can make them a deal for $200/tonne and not go bankrupt. Below that and you run red. Discover a new process, and suddenly your competitor breaks even at $200/tonne, while you make a 50% profit margin selling at $150/tonne--a price that would bankrupt your competitor in 6 months if they tried to fill that order at that price!
You'll no
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Maybe there is a technical problem in replacing that many folks with robots at a price that makes sense.
If, so, the crossover point will grow over time to where the 70% number eventualy seems small.
Once the robots are the cheapest way, how should the fruits of the robots be divided?
Having only the 1% keep them is the traditional plan which made the robots possible.
But this seems an unstable system.
(No buyers and a grumpy 99%.)
I wonder if China has an advantage here.
They seem to be able to shift between capitolism and communism as it makes sense.
Communism does not bring out the best in workers.
Historically, this seemed a fatal flaw.
But maybe the nobody needs to work senario, the fatal flaw points in the other direction.
It still doesn't matter in the long term as even if China tries to hamstring adoption, other countries (like the U.S. that doesn't even have the large workforce to protect anymore) won't and therefore China loses business which means workers are laid off regardless. I suppose China could keep the people employed and limit parts of their production for internal use only, but even that's pointless. Let the robots produce the goods and let all of the people find something more productive to do. China is supposed to be a communist country, so what do they care if they have to redistribute wealth to people during an adjustment period.
In my lifetime I will get to see Asia run out of cheap labor and the great manufacturing migration to Africa will start to happen.
You will not see Asia run out of cheap labor in your lifetime or in the lifetime of anyone reading this. The reason is simple. Supply and demand. Asia has the largest supply of labor anywhere in the world. China and India each individually have more people than all of Africa and Africa is far larger geographically.
You'll see it shift around some but it will take decades before even China can raise its GDP per capita to something close to the US or EU. India is even further behind and there are other countries like Bangladesh or Vietnam that are even further back. It took Japan and Korea and some of the other so called Asian Tigers 20-30 years to get to where they are now and they still do huge amounts of manufacturing. I've worked doing global sourcing including from China, India, Mexico and Southeast Asia. Believe me when I say demographics matter a lot when it comes to labor costs.
Manufacturing in Africa? Not until there are a lot of improvements to infrastructure and government first. China is investing rather heavily in Africa because they need resources but don't think for a minute that China will stop being a manufacturing powerhouse in your lifetime.
The question becomes one of to what extent is is no longer possible to limit workforce replacements to a small enough percentage that it's beneficial to the overall economy.
As technology improves, we remove low-skill labor jobs from the workforce, leaving only jobs for which substantial amounts of training or education are required in order to fill, which means that eventually anyone who is removed from the work force may take several years before they are capable of being productive and adding to the collective wealth of the economy.
Realistically, this isn't an issue in terms of the capacity to produce wealth, but if demands falls of, supply would naturally decrease and at best the excess production capacity is used for something else. However, it does leave a lot of people without the ability to participate in the economy which is not good for society as a whole.
I think that eventually we'll reach a point where there's enough material wealth generated through automation that everyone can be given food, shelter, and clothing at no cost. The only stable alternative (at least that I can conceive of at this time) is for humans to start selectively breeding themselves so that their ability to learn and engage in new forms of labor is not outpaced by the rate at which they are able to figure out how to automate existing labor, which itself makes for an interesting equilibrium as being smart enough to quickly learn and adapt also implies being smart enough to find more efficient solutions to problems.
I understand the economics lesson, to the degree I accept economics as a viable field of study, I'm not really arguing about it. Nor do I think the world should bow to economics, but take it under advisement and engineer it to the benefit of the majority of the population.
I guess my point about cheap labor was more oriented around the problem that their labor protection laws, even if enforced, are feeble by comparison even to the United States, which themselves are feeble by comparison to much of Europe. So comparative advantage here is significantly achieved at the expense of undermining laws and unions we have established to protect our workers from the impact of the monotonically increasing profit motive that most corporations need to present. My environmental argument is roughly parallel.
It is worthless to have these laws if we're going to allow our corporations to make an end run around them. We should impose insane tariffs until such time as their laws resemble our own, and are actually enforced. Certainly there will be upstream impacts to this, almost your argument in reverse. But I will assume such conditions will not last long, China would shape up and join the 21st century and play nice or not play at all.
At that point your argument, to the degree it applies to pure economics will still apply (albeit with less profit involved). They will still enjoy comparative advantage at least in terms of labor: they outnumber us almost 5:1, and that assumes their distribution of labor matches our own, which I suspect it does not (yet). The trade advantage is certainly lesser, but it doesn't ruin the whole picture. If we believe in these laws so much to hurt ourselves, we really must insist.
I thought he cancelled a robot takeover of China.
The question becomes one of to what extent is is no longer possible to limit workforce replacements to a small enough percentage that it's beneficial to the overall economy.
No, it doesn't. The problem isn't of how much, but how much per unit time; if the question becomes how much, implement complete and total communism, because you have entered a post-scarcity economy and everyone has so much money they can't find any way to spend it all.
We roll the dice you're stumbling over every once in a while. The last bad one was the Industrial Age, where we had 70% unemployment for 60 years; it sucked.
The last good one was the Information Age, where we replaced mostly clerks in offices managing paper document stores so large that an ever-expanding army of clerks couldn't do it--that is, you may hire 2000 clerks to handle 2000 times as many leases and contracts, but your workforce isn't going to handle the workload anyway, and your business is going to collapse under its own weight; the Information Age (computers) solved this by making it POSSIBLE to expand industries that desperately wanted to grow, not by throwing out massive numbers of jobs and then trying to make up new markets. New markets came rapidly because new jobs in existing markets showed up everywhere, and everyone got friggin' rich.
The next one is the automation age; it resembles the industrial revolution more than the information age, and will sharply create a 50%-ish drop in employment in industries which are not hitting walls trying to expand. Those industries are sized for the demand, and won't explosively grow; new jobs won't rapidly appear over night due to automation, and so the turn-over won't magic up so much wealth as to expand the middle class and create new markets out of nothing.
I think that eventually we'll reach a point where there's enough material wealth generated through automation that everyone can be given food, shelter, and clothing at no cost
Automation won't do it. The core problem is energy scarcity; we can transmute any material into any other material through energy-expensive processes, so we are capable of using millions of times more energy than we currently produce or consume. A dyson sphere completely enclosing the sun and using modern parabolic reflector sterling engines at 39% efficiency would generate 13,000 TRILLION times as much energy as we use now, and would end us into an unknown post-scarcity economy as you suggest; however, I don't project the specifics being something I can simply describe, and don't attempt to do so. It may not instantly create a utopia; it will create the economic situation prerequisite for a utopia.
As for today, a capitalist solution works. For just a hair below the cost of our current welfare system in America, we can create a capitalist feedback loop that supplies everyone food, shelter, clothing, utilities, clean water, and so forth. Any business participating in the supply side will make billions in pure profit, so somebody will do so; as for the incentive to work, I specify everyone (even Warren Buffet) gets the Dividend payment each month, and so employment carries no risk of losing welfare benefits, nor reduction in benefits, and so a job is always an improvement in your financial situation. Incentive.
Solving poverty wasn't a difficult problem.
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Nor do I think the world should bow to economics, but take it under advisement and engineer it to the benefit of the majority of the population.
Nobody should bow to any science as a set of rules; sciences are tools. Engineers figure out how to abuse the rules to make interesting things happen.
The trade advantage is certainly lesser, but it doesn't ruin the whole picture.
Correct. You understand my point, I see: we rapidly move total wealth forward, so even the lowest and most abuse face an improving life situation. You argue that we shouldn't abuse the child of Omelas today so that he may be better off--but still abused--tomorrow; I only argue that it is more efficient, which you seem to understand. I find morality silly, but won't argue it in this case; I always attack morality where it leads to conclusions in which people would rather let millions suffer and die than condemn thousands, because you are responsible for that suffering and death by your refusal to stop it.
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I asked for the hyperventilating idiots to respond upthread. Why didn't you?
You have clearly never worked with big corporations, anything they gain in economies of scale is quickly lost to 'all hand meetings' and 'long term strategic planning'. Microsoft used to be 'big and fast', lasted less then a decade. Now they are big and slow, same as all other big business.
You main point being that economics is a zero sum game is so obviously wrong, there is no point in even talking about it. If you can twist yourself to the point you believe it, you are unreachable.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
This is, of course, completely anecdotal but a number of years ago I had a room-mate from mainland China who was a doctoral student in a STEM field at a major nationally ranked university in the area. One time, he described his undergrad university back in China where, supposedly, they had a significant department focused around automation. He said that the students used to, jokingly, call it the "Department of De-Automation" because what they would do is take western automation technology and intentionally dumb it down so that it didn't end up eliminating too many jobs...
Rules of Conduct:
#1 - The DM is always right.
#2 - If the DM is wrong, see rule #1
Correct. You understand my point, I see: we rapidly move total wealth forward, so even the lowest and most abuse face an improving life situation. You argue that we shouldn't abuse the child of Omelas today so that he may be better off--but still abused--tomorrow; I only argue that it is more efficient, which you seem to understand.
No, I can't go there. The Great Leap Forward? How'd that work out? Tens of millions dead to try to turn China into a modern industry. Yes, communist rhetoric was involved, but I would argue that was pillow talk, and there have been numerous attempts by leaders in history to do this sort of thing, the most radical ones ended in tears. To yank a country by the horns and turn it around quickly, you are going to have to do it at someone's expense. My point in this being that this sudden, lurching change in economics and industry is mostly equivalent to a genocide in Omelas today, and no clear victory tomorrow.
I find morality silly, but won't argue it in this case; I always attack morality where it leads to conclusions in which people would rather let millions suffer and die than condemn thousands,
I do not think we can reach any sort of accord if you reject morality. If for no other reason than that I would be unsure what value all this wealth is, if we're miserable and our planet is wrecked, in the process of acquiring it. Great, I have cushions for my chair that sits in a cloud of debris, but that's ok because i'm busy working in the factory to get a swivel mount on it for tomorrow.
in which people would rather let millions suffer and die than condemn thousands,
I imagine you would attack less if it was you being condemned. Your viewpoint on this change doesn't seem to take in to account the various leakages and inequalities present in the system. Pushing for a great economic leap forward in the united states is, in my opinion, bankrupting us. Perhaps that's ok by your argument because Asia outnumbers us 10:1 so we're just the few condemned, but I guess I'm not sure why I should be ok with that and sue for other options. Yes a few people in the US will be wealthy, and SOME of their wealth will be invested in services that can only come from those in close geographic proximity, but not enough. It sounds a lot like a lord sitting in a castle with a few very poor people working his lands, while his real money is being invested and put to use overseas where the comparative advantage exists. All these products and luxuries that we spend our money on, which cost ever so much less, are in fact bankrupting us. We are becoming the worlds greatest holder of imaginary property, without the resources to retain it if a big guy with a gun comes asking.
2. No member of the faculty is to maltreat the "Abos" in any way whatsoever—if there's anyone watching.
You have just barely touched on what is really happening, this best described by economics versus psychology. Psychopathic capitalism can only exist where psychopaths dominate economic control, without them it ceases, that is their nature, their ego that drives their psychopathic selfishness and greed, their psychologically need to dominate and control others in society, up to and including live or death decisions over others (this not for mutual benefit but to feed personal ego). Economics is just a religious framework around the underlying psychology of the individuals involved and economists the high priests of that religion, who just exactly the same as all other religious preach the value of their religion for their own personal benefit.
So it is really all about, what framework will allow a minority of psychologically disturbed individuals to control the majority for the benefit of the psychologically disturbed minority. The balance is of course being how much more assertive the majority are in demanding greater equality in access to the resources produced by the society they are a part of. The whole lie of ordinary people versus the PR managed delusion of extraordinary people, the reality is less assertive people versus more assertive people and what happens when those less assertive people, the majority, start becoming more assertive, as in the meek shall inherit the earth and the not so meek, well, for one to inherit the other must, well, die (figuratively speaking of course as dying of old age with all their corruptive power stripped away is quite fine, subject to the crimes they commit to gain and keep power).
Chaos - everything, everywhere, everywhen
You main point being that economics is a zero sum game is so obviously wrong
How retarded are you?
I described economics in a way where you start with people spending $320/year on chairs, and wind up with them spending $320/year on chairs AND CUSHIONS. That's not zero-sum; are you fucking stupid? More shit is coming out of one side without more shit going in the other.
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I imagine you would attack less if it was you being condemned.
You imagine a lot.
Your viewpoint on this change doesn't seem to take in to account the various leakages and inequalities present in the system
It doesn't by design. Such things are built on top the system. It's like saying that clay earth only bears 1500 pounds per square foot load: this is a fact, just as the stated facts I have given about economics. You add an argument similar to that engineers sometimes design shoddy buildings, or that builders sometimes cut corners; those are also true, and have nothing to do with how much load the earth will bear. The fact remains you can improve your structure to bear 1500 pounds per square foot load without collapsing, and it will still collapse if the earth below it only bears 1200 pounds per square inch; you must improve the earth before the structure.
Pushing for a great economic leap forward in the united states is, in my opinion, bankrupting us.
A great economic leap forward would not bankrupt us; however, a massive switch to automation would cause something akin to the Industrial Revolution, which I've accounted for. The massive unemployment will go beyond the 47% of jobs which we can automate now: with those laborers displaced, the consumer base drops by a good 47%, which means you can sell all your inexpensive goods only to half as many consumers, which has nasty implications. The Information Age unbound struggling markets: businesses couldn't double capacity to manage contracts and invoices by doubling the number of workers; the mistakes went up exponentially, and the feasibility of managing all this information was non-existent until we brought in computers, hence allowing explosive economic growth and rapid creation of jobs to employ the displaced. Mechanization will replace linear labor scaling with machine work, so will simply create a large term of unemployment.
This won't bankrupt the country--far from it--but it will inconvenience many people. I provide a welfare system which doesn't increase in costs when more people are unemployed, and which is stable against all disruptions which don't destroy the economy outright, and which completely eliminates homelessness and hunger; people tell me this is immoral because those dirty poor people should just get a job. 55 million hungry in the United States of America, 600,000 homeless, and 4.8 million homed on HUD vouchers (5.4 million WOULD be homeless), and they tell me it's immoral to provide a welfare solution that costs 98% of what our current costs, but eliminates these problems.
Morality is an excuse to protect your ego from the suffering you inflict on others.
All these products and luxuries that we spend our money on, which cost ever so much less, are in fact bankrupting us
All these products and luxuries costing ever so much are reflective of when shirts used to cost 479 labor-hours (~$3500 today), and then factories and mechanization made them cost $25, and suddenly every beggar could buy himself two shirts.
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