21 February 2019

Good old flesh and bones better than Foxconn robot army

Taiwanese tycoon Terry Gou Tai-ming {郭台銘}, founder and chairman of contract manufacturing behemoth Foxconn Technology (Hon Hai Precision), once fearlessly predicted that robots would replace humans on assembly lines.

A couple of years ago, he came through with his own version of how this might happen. He embarked on a 100 billion yuan (US$16.41 billion) automation program that would bring the latest robotics technology to his factories.

Back then, Foxconn had been hit with rising payroll costs and trying to fend off accusations that it was running a sweatshop. One million robots would be the solution.

Today robots are as much a part of Foxconn’s shop floors as humans, and as the thinking goes, they’re less expensive to have in terms of cost and public image. No strikes, no scrapes with labor law.

By the time a self-designed robot named Foxbot debuted in 2011, Foxconn had begun to see signs of an increasingly restive workforce. It was forced to double wages to almost 2,000 yuan a month after a spate of factory suicides caused widespread anger across the country.

With Chinese wages rising ever more steeply and orders for iPhone 5s and Sony PlayStation 4 swelling its books, Foxconn would be expected to increasingly rely on its robot army, especially as the Christmas shopping season approaches.

Not so. Southern Weekend reports that Foxconn has resumed mass recruitment in Henan and Shanxi provinces. The initial target was 100,000 workers across its factories but in just three months, 150,000 had been available in Chengdu alone thanks to a little push from local cadres.

The report further reveals that Foxconn spent a paltry 10 million yuan last year on robot purchases.

So what went wrong?

Setting aside technical issues, analysts estimate the overall cost of a robot arm, mainly used to burnish metal surfaces and assemble integrated circuits, could be as much as 100,000 yuan. Maintenance expenses are another matter.

Although robots are cost-efficient in making components such as smartphone camera lenses, they are not suitable for every stage of the production chain.

A more fundamental factor is that the fast evolution of electronics products is undermining the importance of robots. A shorter lifespan for a smartphone model, for instance, means robots and other auxiliary equipment specifically designed to manufacture the product will have to be replaced or modified every 12 months.

With the benefit of hindsight, we are beginning to see that Foxconn’s robotics program looks more like a show of bravado than a real strategy.

The truth is that Gou can go on tapping humans to run his factories, especially in places where there is an abundant supply of cheap labor. Foxconn has been aggressively putting down roots in China’s vast central and western hinterland, notably Zhengzhou, Taiyuan, Chengdu and Wuhan.

– Contact the writer at [email protected]



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