Things are changing. They always are, but this is in the field of robotics and automation.
About 10 years ago, I was onboard with a lot of the globalization. A lot of it made sense – then. Millions of manufacturing jobs with NAFTA and cheap Chinese/Taiwanese/southeast Asia labor. Unions were driving plants out of business with sky high labor costs. It made sense at that time that more and more of our people needed to switch to more technical types of jobs that were prolific in this country. You do not need a college degree to work in the IT field. More and more people needed to go to college rather than trade school.
That is about to change.
I saw something on 60 minutes a few weeks ago that sort of put it all together for me. It was a junk metal plant that produced steel. It used to need a few thousand workers, but now it only needed a fraction of it because everything was automated. People were needed to program things, fix the robots, set things up, monitor, etc. Essentially, most of that work force was a trade group that needed to support the automation.
Now, let’s go back in 1995, almost 22 years ago. I worked as a security guard over the summer at a place called Dana Corporation, which eventually went out of business. Dana Corporation had 2 big plants and one R&D building. In the big plants, you had hundreds of employees working three shifts. In the R&D building, there was a lot of robotics, high tech computers, and only a few workers. It was pretty cool to see, but small scale. I thought back then that robotics were going to take over most work at plants.
Well, my thoughts have switched from globalization to nationalization the last few years. Why?
If you are Ford, and you have a plant with 4,000 workers and you want to invest several billion in a plant in Mexico to save on labor costs with the 4,000 workers – what I’d rather do is follow Trump’s lead and lower their corporate tax rate and incentivize them to stay. What if….
- Ford built a new state of the art factory in Detroit that is massive
- Ford closes the old plant with the 3,000 workers
- 500 workers are needed from the old plant to work in the new robotic plant for a line of cars
- Ford closes down old factories in Mexico and those lines of cars are now produced in the new massive plant in Detroit to hire the other 2,500 workers that lost their jobs with the old plant
- Where it would have required 15,000 employees to produce these cars, it is now done with robotics and the 3,000 employees at the old plant
- Ford saves on labor costs and has a reduced corporate tax rate
- More car companies start following suit
- Detroit starts to repair itself from the inside and becomes a new trade/tech hub in the country
So – what I’m fighting for now is where Ford and other American companies invest billions into more automation with American workers rather than the automation happening elsewhere.
How does this happen?
- As Trump has sort of done, you use the carrot and stick by threatening high tariffs on companies who leave (as opposed to Clinton’s taxing them after they leave)
- Reduce corporate tax rates for companies who play ball and have a high percentage of employees in the United States. For companies like Ford, what you want is 100% of cars sold in America to be made with at least 51% of components made in America. These companies are rewarded with the 10% corporate tax rate.
- For companies like Apple sitting on $230 billion in cash, customize incentives to produce more goods in America by building state of the art robotic facilities and training programs to get more employees trained up quickly. Provide cheap land and work with “templates” to greenlight sites and get construction moving rapidly rather than having to wait 10 years on red tape.
- Cabinet-level position created to oversee American business interests. The “Department of Corporations”. This position would meet with CEOs of large corporations and be a liaison to the president and communicate concerns and roadblocks. Rather than doing post mortems on companies who are leaving, we need to partner with companies to help them cut through red tape, create “smart” regulations and repeal excessive regulation, and coordinate efforts with local governments to assist larger companies where possible. For example, if Nabisco wanted to create a new factory in Phoenix, this cabinet level’s office would work with the state of Arizona and Phoenix localities on getting them the best locations and total package possible. Think about an NFL team that is moving – the local city they are moving to might lease them a building and put in $50 million towards a new stadium. Why can’t we let localities in this country bid against overseas locations for sweet deals to create jobs locally? Additionally, this cabinet level position’s office can work with foreign entities who want to move business here and invest.
- Metrics dashboards that companies and foreign entities could use in real-time run by the Department of Corporations. What would be of interest to me would be to track the country’s top 500 companies. How many employees they have at what locations. Are they planning to expand? What industry are they in? What localities are looking for your type of companies to move there? What localities have higher unemployment rates with the skills you need. What localities are running what incentives for companies to move operations there? What localities might be willing to assist in moving costs? What localities have a lot of technical universities nearby to recruit from? What localities have the best tradesman?