From SCDigest's On-Target E-Magazine
- Oct. 22, 2014 -
Supply Chain News: Volkswagen to Bring in the Robots to Replace Retiring Baby Boomers
Board Member Says Strategy Won't Impact Germany's Unemployment Rate, but That is a Bit Misleading
SCDigest Editorial Staff
The automotive sector is already the largest user by far of industrial robots, but German giant Volkswagen says it is planning to up the ante to reduce its costs and replace thousands of retiring baby boomers.
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VW's Neumann says that robots which handle routine tasks cost VW about 5 euros an hour lower over their lifetime, including maintenance and energy costs, than a human. |
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What Do You Say?
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As at other German industrial companies, VW's workforce is growing older, and it will see a big wave of baby boomers retire between 2015 and 2030. Meanwhile, low population growth for years - below replacement rate - means that there will be fewer young people to take their place.
The answer? According to a recent magazine column written by Horst Neumann, VW's board member for human resources, it is more robots. But, Neumann says the machines would only take over monotonous or un-ergonomic tasks, while people would focus on more highly skilled jobs.
In union-heavy Germany, that could sound some real alarms, as the unions have a significant say in company policy. Neumann's column seem to be a sort of early announcement intended to get the news out there now and manage expectations early on, rather than springing it on the union and German public in a year or two.
To that end, Neumann's plays a bit of a semantics game in describing the impact. In the column, he says the change will not negatively affect Germany's unemployment rate, for example. But of course the unemployment rate is not the same as the total number of jobs.
Neumann put it this way: "We have the possibility to replace people with robots and nevertheless we can continue to hire the same amount of young employees. Or put the other way: we would not be able to compensate for this outflow of retirees by [hiring] young employees."
In other words, because of the reduced size of the labor pool there and lower interest in factory floor jobs by the current generation, VW believes its new hiring can stay constant versus current levels, not impacting the unemployment rate, even though many retirees will nonetheless be replaced by robots, not people.
The strategy gets at the heart of a real dilemma, where great majorities agree that low skill, repetitive manufacturing jobs are not desirable in the specific, yet companies using robots to replace those types of workers raises much angst not only for labor but the general population as well in many ways.
(Manufacturing Article Continued Below)
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One key change enabling VW's plan: While robots remain comparatively rare in the final assembly area where workers must carry out intricate tasks in the vehicle interior, London's Financial Times reports that a new generation of lightweight robots that are able to work side by side with employees rather than inside a safety cage may alter that dynamic, as exemplified by the Baxter robot from Rethink Robotics. (See 