China Is Executing To Plan: Foxconn Replaces 60,000 Workers With Robots

Tyler Durden's picture

Last month we discussed the fact that officials had approved the latest Five Year Plan for China's economy. The ultimate goal of the plan is to overtake Germany, Japan, and the United States in terms of manufacturing sophistication by 2049, the 100th anniversary of the founding of the People's Republic of China.

To make that happen, the government needs Chinese manufacturers to adopt robots by the millions. It also wants Chinese companies to start producing more of these robots, , and to enable that there is an initiative making billions of yuan available for manufacturers to upgrade to technologies including advanced machinery and robots.

The manufacturing hub for the electronics industry, Kunshan, in Jiangsu province is proving that that initiative is well underway. As the South China Morning Post reports, thirty five companies, including Apple's key supplier Foxconn, spent a total of 4 billion yuan on artificial intelligence last year, and more companies are going to follow suit.

 

Spurred by the initiative and a desire to cut down on labor costs, Foxconn has reduced its workforce by a whopping 60,000 people thanks to the introduction of robots. Foxconn's headcount went from 110,000 down to 50,000 (adding to the mass layoffs that we have warned will cause further social unrest in China).

 

We're not sure how all of this will play out in the grand scheme of the Five Year Plan that was put together, but what is clear is that China is wasting no time in executing the early stages of the plan.

That is just the beginning.

The transition from human to robot workers may upend Chinese society. Some displaced factory workers could find employment in the service sector, but not all of the 100 million now employed in factories will find such jobs a good match. So a sudden shift toward robots and automation could cause economic hardship and social unrest. “You can make the argument that robotic technology is the way to save manufacturing in China,” says Yasheng Huang, a professor at MIT’s Sloan School of Management. “But China also has a huge labor force. What are you going to do with them?”

For now, that question remains unanswered, but that won't stop from unleashing the biggest robotic revolution seen in recent years.

In an effort to minimize the social unrest that is already taking place, the country has said that as much as $23 billion will be set aside to cover the layoffs in the coal and steel sectors as it tries to cut down on overcapacity - we're eager to find out how much will be set aside for workers that are being displaced by these robots.

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oncemore's picture

Those people will go to build the infrastructure projects, financed by Chinese, for example the Silk Road Projects and colonize the Silk Road Route.
This is however, probably not enough to offset 1*10^7 workers without job.

AVmaster's picture

^ Nope...

 

They will send them upset, displaced, workers to war...

 

"Arrows cost money. Use up the Irish. The dead cost nothing."

Bumpo's picture

Just think, when robots do all the work, only robots will be workers. Better program them to want Nike tennis shoes, cuz the rest of us won't have shit to spend.

A Pimp's love is different's picture

This is good news! Pretty soon those robots will be jumping off the tops of buildings and those lucky Chinese can get their 2 penny an hour jobs back to make Obamaphones & Nike shoes for ISIS

mary mary's picture

Robots are people too, my friend.

Antifaschistische's picture

What makes me laugh, is the notion that greater productivity out of China is bad news for China! Lol. They will eventually erase every remaining shread of the US export market.

Lost in translation's picture

You beat me to it.

I figured they could do one of two things:

A) start a war that thins the population out in dramatic fashion. Or...

B) pack the displaced and unemployed laborers into ships and aircraft, and send them to the US via Mexico. The remittances they send back to China should generate some cash flow (because going on public assistance in the US is so easy it's pretty much a given).

PT's picture

Naaah, once entire countries run purely on vending machines, one day the vending machine replenishing robots will stop to download the latest Windows update, which will contain a glitch that no-one notices because the robots are in charge, the whole thing will stop and entire nations will starve.  TPTB won't give a shit because they all live thousands of miles away.  Who's gonna do anything about it?  With what?

Darth Vader's picture

You can't stop progress!  I guess these ex-employees can focus on productive work now.  Like serving coffee and making more plastic crap that breaks really quickly.

tarabel's picture

 

 

Since they copy everything we do, they can sign up all these unemployed guys to caulk windows in the village in order to make the hovels more energy efficient.

Of course they would need to INSTALL windows in the hovels first, but those are just the niggling sorts of details that trip up all these extravagant plans for shovel-ready jobs.

Pliskin's picture

To be fair they don't copy 'everything' the U.S. does....I don't hear of any Chinese soldiers raping kids in foreign countries!

I guess they're just not THAT 'Exceptional' yet!

mary mary's picture

China just needs to set up a gazillion call centers, and train these people to do cold calls begging for the Democratic Party.

PT's picture

Damn stupid, lazy Chinese workers!  If only they were willing to work harder for less pay then they never would be replaced by robots and they could keep their jobs! ... , oh, hang on.  That narrative only applies to workers in the Western World.  Whoops.  Hey!  Mises Institute.  Taking the day off?  Or are yas racist?

Bangin7PoundCocks's picture
Bangin7PoundCocks (not verified) PT May 25, 2016 6:21 AM

Wang and his $1 a day minimum wage demands have sent him back to the rice paddies. I hope he is happy. Me and my other smug little shits that push paper are having a nice hearty laugh today. Ahh. Good times!

Déjà view's picture

At the moment, China has 30 industrial robots for every 10,000 manufacturing workers—about double what it had in 2013.

 

Experts refer to this figure “robot density.” In comparison, South Korea has the world’s highest robot density at 437 robots per 10,000 manufacturing workers, which is about 15 times greater than China’s. Japan’s is about 11 times greater than China’s; Germany’s is 10 times higher; and the United States’ is about three times higher.

PT's picture

Remember approx 5-10 years ago when MSM published articles that went like this:  Bunch of Chinese visited a factory in Japan, watched what the robots did, then went back to China and paid peasants to do the tasks that the robots did because the peasants were cheaper than robots.

I never believed it would last long.  I guess here we are.

Mr. Universe's picture

With Foxconn now having to pay close to a $2 an hour average pay, who can stay in business making a bunch of peasants rich?

tarabel's picture

 

 

Ah, but they can have a second crew moving along behind the first one to tear up all the track and a third group to move it 3 meters to the left.

As for colonizing along the Silk Road route, I think there's a reason why nobody lives in central Asia and high speed train service has nothing to do with it.

OldPhart's picture

3.5 billion people with absolutely nothing to do.

I smell shit in the water.

Silvertwins's picture

Opium anyone?  Though this time will be a Pharma version and with a not so slow kill side effect option...........paid for ofcourse "By the people, for the people".

Silvertwins's picture

Opium anyone?  Though this time will be a Pharma version and with a not so slow kill side effect option...........paid for ofcourse "By the people, for the people".

strangewalk's picture

 “But China also has a huge labor force. What are you going to do with them?” 

When you go to a Chinese restaurant, don't order the beef. 

giovanni_f's picture

There is not enough work for all. Full stop.

Restorative_Ally's picture

Not enough work or too many people? 

Elites think the latter. Don't worry, some rich guy will release a virus that screws with childbirth.

tarabel's picture

 

 

We'll get even with them when their lawnmower robot picks up a virus and goes all Ginsu on their poodle.

beijing expat's picture

That would take too long. Oligarchs are into instant gratification too. Look for war famine and plague.

PT's picture

Too many hours per week / weeks per year.  Let the robots produce.  Re-adjust worker hours to compensate.

Naaaaaaaah, that's too hard, isn't it?

Shall we consider the usual alternatives?

In the old days, ten men would produce ten phones and ten men would buy ten phones, but then we got the phone-making robot that let one man produce ten phones so the other nine men got the sack.  The robot produces ten phones but we can only sell one phone becoz only one man has a job and can afford to buy.  We throw the rest of the phones in the bin, otherwise we have an over-supply of phones and would have to lower the price of phones.  Or we have to convince the one man to buy ten phones (eg. phone breaks or different model every five minutes). 

We could give the phones away but - *Gasp!*  That wood be ... COMMUNIST!!!  Imagine that.  Communist stuff happening in Communist China.  Maybe we better throw the robots in the bin so everyone can be employed and afford to buy a phone.  Or, we can bail - out the Company so it doesn't go broke because it creates important shit that people want to buy and, becoz it creates JOBS, ummm, well not quite as many jobs as before but ... we have to look after our Entrepreneurial Entrepreneurs!

Production matters.  Distribution matters.  Jobs DON'T matter.  Yes, yes, ... Very easy to say if one isn't already laying on the scrap heap.  Let us use our brains.  We shall need them.

Tarjan's picture

It's about time these "experts" who assert that because mechanization always worked out in the past and provided new jobs for the displaced come up with some concrete proposals for the massively disruptive effects of robots and AI. Saying the problem will somehow sort itself out does not cut it.

~

tarabel's picture

 

 

35 companies spent 4 billion yuan on AI last year?

That's...

(channeling Dr. Evil)

... 650 MILLION DOLLARS!!!!!

And Foxconn did not replace 60,000 workers with robots. They replaced  60,000 workers with empty spaces in the parking lot after seeing their sales drop.

What editor greenlights this silly propaganda anyhow?

 

Ghordius's picture

+1 splendid comment, and Dr. Evil... well channeled

poeg's picture

No sir. This initiative was started when the whole "upping Foxconn worker's wages" came about. IT Times reported back then Foxconn "had already plans on the shelf to automate" but didn't require such to keep their margins with Apple. When the wages were adjusted, automation became profitable and those same plans enacted. This is a continuation of an OLD storyline.

CTG_Sweden's picture

 

 

Article:

 

[- - -] You can make the argument that robotic technology is the way to save manufacturing in China,” says Yasheng Huang, a professor at MIT’s Sloan School of Management. “But China also has a huge labor force. What are you going to do with them? [- - -]”

 

 

 

 

 

My comments:

 

Print money, create domestic mainland Chinese consumer electronic companies with attractive brands, give the stock to the general public so that a smaller share of them have to work. That will reduce the excessive supply of labour. That´s a better idea than to print money and build ghost towns.

 

The huge domestic Chinese market may provide good initial economies of scale for large consumer electronics companies.

 

Victor999's picture

We live in a global economy based on consumerism and infinite growth.  Replacing human workers with robots solves one problem of the manufacturing (and other sectors!), but it unleashes a major problem for those same companies - just who the fuck is going to buy your products when all your customers are out of work?  And without customers how are you going to grow - what will your shareholders think of that?  This is going to have a bad ending.

PT's picture

Where is the four hour working week?

 

 

 

 

or ten hours or whatever.  Production matters.  Distribution matters.  Jobs don't matter.

Oliver Jones's picture

Two words: Soylent Green.

JailBanksters's picture

If these robots start jumping out of windows or pulling their own power cords out, there is something really wrong at Foxconn

scintillator9's picture

Going to be a fun day when Carrington Event 2.0 happens, and no one remembers how to operate a shovel,  hammer, screw driver, or hand drill anymore.

Arnold's picture

I have my stash prepped.

Used, like new condition.

Seb's picture

After all the slave robots are in place all over the world, the culling of human peasants can start.

beijing expat's picture

There has been a labor shortage in China these last several years. These days people don't want to work in a factory if they can avoid it. They want white collar jobs. As a result we seea lot of light assembly work being moved to Cambodia and Bangladesh or wherever there is a large pool of labor. Some factory owners I spoke to said it was hard to maintain standards so far from home and the supply chain is not well developed so they wanted to move back to China but labor is getting expensive.

Robots seem to be the solution for China then. Please note that Foxconn is Taiwanese, and the robots are typically made in Japan.

The plants where things are made typically run between 100-400 million so nobody wants to move to a place that might be unstable. Sophisticated machines typically stay in China.

Duc888's picture

 

 

Meanwhile back in this cuntry, we're turning shit into a creepy gulag with a camera on every street corner, blabbing about transgender bathrooms.

beijing expat's picture

I've always thought China is the model for the future. A one party pay as you go hard state in the service of Oligarchy. In China however, one gets the sense that the political elite feels some obligation for the wellbeing of the people and so they endeavor to maintain employment for them. In the west, not so much, though they talk about it a lot.

Sandmann's picture

transgender bathrooms are a necessity for Obama's Wookie friend

Debugas's picture

in 50 years most chinese people will work remote-controling robots on the moon

Sandmann's picture

in 10 years China will be controlling US Zombies by satellite instruction to pick cotton