We Need New Labels: I Propose '100% Robot Made'

By: Mike Shedlock | Fri, May 27, 2016
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Yesterday, Apple's iPhone maker, Foxconn announced an immediate cut of 60,000 workers to be replaced by robots.

Today, Adidas announced the first ever 100% robot-made shoe.


"Speedfactory"

Deutsche Welle, Germany's international broadcaster, reports Adidas Shoe Manufacturing Will Return to Germany.

That's the good news. For manufacturing job seekers, the bad news is the shoes will be 100% robot made.

Adidas Robot Manufacturing

Your next pair of Adidas shoes may be put together by robots - the German sports retailer has said it will start selling its first robot-produced shoes in a new, state-of-the-art factory in its home market starting 2017.

The announcement came as Adidas unveiled its prototype "Speedfactory", a state-of-the-art, 4,600 square-meter facility on Tuesday, meant to automate shoe production, which is largely done manually in Asian factories at the moment.

The new production site in the southern German city of Ansbach is still under construction, but it represents a return to local production for Adidas, which stopped manufacturing shoes in its home market more than two decades ago in favor of Asia.

But the company has struggled with steadily rising wages across the continent, where it employs around a million people.

Six subcontractors of Adidas in China declined to comment or said they were not aware of the new production sites in Germany, news agency AFP reported.

The factory will deliver a first test series of around 500 pairs of shoes to be sold from late 2016, with large scale production targeted for next year. Adidas management also said the shirts of the German national football team could be produced in the same factory too.

The sportswear and equipment company also plans to open a second Speedfactory in the United States in 2017, with similar ones to follow in Britain or in France.

Adidas produced 301 million pairs of sport shoes last year, but it has to ramp up production by more than 10 percent if it is to reach its growth targets by 2020.

Its chief competitor Nike is also developing a robot-operated factory, but Adidas said it is further along in this area.


Many Millions of Chinese Shoe Manufacturing Jobs Will Vanish

Adidas insisted that the aim was not to immediately replace their workers, saying the goal was not "full automatization".

I believe the emphasis should have been put on "immediately". As for "full automatization", someone has to monitor the robots.

Let's not sugar coat what's going to happen. 1,000,000 Adidas shoe making jobs in China will vanish by 2018. Nike? Converse? Everyone else?

I cannot begin to total this up, but many millions of Chinese manufacturing jobs will soon vanish.


Robots Taking Over

Also consider Robots Taking Over: Foxconn Terminates 60,000 Employees, Hires Robots! (emphasis theirs)

In one of the largest terminations ever recorded in human history, iPhone manufacturer Foxconn has decided to fire 60,000 employees in one single go. Earlier this factory based out of Kunshan in Jiangsu province of China had 110,000 employees, but now, it will only have 50,000 human employees.

Robots have been introduced in a massive manner, and tasks of these 60,000 terminated employees would now be done by these robots.

Department's head Xu Yulian said, "The Foxconn factory has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots. It has tasted success in reduction of labour costs,"

And the interesting aspect is that, almost all of the 600 major manufacturing companies based in Kunshan are about to fire humans, and assign their tasks to robots. In fact, 35 biggest manufacturing companies from Taiwan, including iPhone's main manufacturer Foxconn have spent a collective 4 billion yuan or HK$4.74 on improving and optimizing automation.

And this recent termination of 60,000 humans is just the start.

Earlier this year, we reported that top Indian IT companies hired 24% less employees; and automation is the reason for this sharp decline. Cognizant Technologies was the company which was impacted to the max, as they hired 74.6% less employees in 2015, solely due to rise in automation.


No Worries Mate

No worries mate, home building will remain strong thanks to $15 minimum wage jobs at McDonalds. The real problem is labels.


We Need New Labels

Current labeling is obsolete. Why bother with Made in China, Made in Japan, and Made in USA type labels.

Adidas is going to open a "Speedfactory" in the United States in 2017, with similar ones to follow in Britain or in France.

The equipment will be the same in each one. The resultant product will not change a bit.

Instead of "Made in USA" or other useless country of origin factoids, consumers might wish to know things like ... "100% Robot Made".


New Slogans Needed

Instead of "Buy Union!" we need "Buy Human!"

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Mike Shedlock

Author: Mike Shedlock

Mike Shedlock / Mish
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Mike Shedlock

Michael "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com/ to learn more about wealth management for investors seeking strong performance with low volatility.

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