Manufacturers cutting white-collar jobs now, too

Manufacturers have been using technology to cut blue-collar jobs for years. Now, they're targeting their white-collar workers, too.
Associated Press
Jan 26, 2013

 

Factory Automation Systems makes machines that help companies cut, bundle and load products faster and cheaper than humans can. But it didn't realize how much technology could help its own business until the Great Recession hit.

To save money, the Atlanta company cut nine workers doing administrative tasks, like booking flights, answering phones, managing employee benefits and ordering parts and supplies.

"I had to lay people off to survive, then I noticed it's not such a big deal" to do things myself, President Rosser Pryor says. "When I'm buying something, I can go online. I don't need a buyer."

Pryor says do-it-yourself software means he doesn't have to rehire though business has rebounded.

Other manufacturers are using technology to avoid hiring blue-collar workers when business improves.

Stripmatic Products, a Cleveland auto supplier, used technology to eliminate more blue-collar jobs. Stripmatic used to assign a worker to each of its stamping machines pounding out metal tubular car parts. They would look for jams inside the machines that cause costly shutdowns, called "smashups."

Then the recession struck, and Stripmatic had to cut staff and scramble to make do with less. To monitor the machines, it turned to electronic sensors and got surprisingly good results. Smashups happen only once or twice a year now, instead of four per month before, and the presses are running 2-3 times faster.

"With a human, you're going to get distracted, you're going to feel the monotony of (the work)," Stripmatic President Bill Adler says. "You're not going to be 100 percent successful."

Stripmatic is doing 20 percent more business than before the recession, with a third fewer employees.

Factory Automation and Stripmatic cut just a handful of jobs each. But multiply those over many companies in many industries in many countries and it helps explain why so many in the middle class can't find work.

 

Comments

The Hero Zone's picture
The Hero Zone

This story is true and in some cases legally employing people is a luxury and not necessity in its strictest sense. I yearn to be able to hire more people at my store but it is a big cost to a small business to even get one new person let alone two or more. This isn't even specifying one factor such as ACA/FICA/ETC., but looking at it broadly it is so risky and expensive to have legal employees that I do see a large gap in capability of hiring. There is no sympathy here with those that hire illegal aliens, but much like my comments on the Racino article indicate the more convoluted, complex, exclusive, or caveat-filled the law is (despite any of the best intentions we can presume were put into it) the more inequality it creates as well as is a breeding ground for "loopholes" (I'm sick of this word, anyone else?), ingenious "technically legal" workarounds, or oversights.

A good example of this is the story behind "Pawn Stars". I certainly by NO means begrudge them for being as wildly successful as they are (it is inspiring!), but I could only wonder what it would be like if the law around pawn shops in Las Vegas weren't so vague at the time that only one man who did some digging found the exclusive sweet spot to be the first.

Kimo

Like I posted a week ago on another story.

We are fast getting to a point in time when robots will eliminate so many jobs; there won't be jobs for those people willing to work. You now have robots making robots.
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Kimo

All the political rhetoric about "eliminate tax on small business" does not solve anything in the long run. Business either uses robots or cheap offshore labor.
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luvblues2

There are things in industrial or construction trades that require more than repetitive type of things that robots will never replace.

2cents's picture
2cents

Just remember, my letter to the editor in 1987. There will come a time when our efficiency will eliminate customers because they can not find work to purchase the products they once produced!

Just saying!

deertracker

There, we agree. When their products won't sell and they take the hit financially, they will finally get it!

Contango

The story goes that Nobel Prize winning economist, Milton Friedman once visited China.

He was shown a public works project and informed that it was a jobs producer.

He told his guests that if that were indeed the reason for the project that they should pass out spoons instead of shovels.

A society based on "jobs for the sake of jobs," will lead to it's own economic destruction.

here in ohio

They will never understand that if nobody is working nobody will buy there crap

luvblues2

Sitting here contemplating my belly button and trying my damnedest to understand what "inderstand" means.

Simple Enough II

Ha ha, now that is funny!

Simple Enough II

So who says they produce crap? I'd rather have a machine doing repetative motion work where technicians maintain them than a person wearing out their joints doing the same task and not being able to use their minds.

Contango

From the article:

"To save money, the Atlanta company cut nine workers doing administrative tasks, like booking flights, answering phones, managing employee benefits and ordering parts and supplies."

Reads like computerized tasks.

Go ahead and argue against “creative destruction,” but ya might as well foolishly decry the loss of agrarian jobs in the early 20th Century.

The Big Dog's back

Sooooo that's what happened to winnie, a white collared cutback.

Contango

Talk about eliminating jobs - let the "Too Big To Fail" banks FAIL. Great interview!

"How Iceland Overthrew The Banks: The Only 3 Minutes Of Any Worth From Davos"

http://www.zerohedge.com/news/20...

---------------------

Good thing that typewriter mfgers. weren't failing under Pres. BHO, he'd have subsidized 'em and limited computer imports and sales in order to "save jobs."

2cents's picture
2cents

I watched as they declined to get into the current world. I came close to doing the same thing before I woke up!

http://www.forbes.com/sites/chun...

Contango

Yep! Interested story. I followed it over the yrs. in the WSJ.

That's why centralized economic planning never has and will never work.

The contrasts couldn't have been more stark between E and W Germany after the fall of the Iron Curtain.

All this talk of producing jobs often reminds me of Kurt Vonnegut’s book, "Player Piano."

That dystopian society had a permanent underclass, where workers were being paid to dig holes and then another group of workers came behind them and filled them in.

I’m fearful that with all the U.S. entitlement programs that we are creating a permanent underclass.

I read where Spain’s unemployment rate is now at 25%; economic depression levels. God bless European socialism! :)

The Big Dog's back

Some (right wingers) on here say our real unemployment rate is 25%. Capitalism, a love story, except the middle class ain't feelin that luv.

Contango

@ Dog:

Let's see; in Spain and other European countries it's socialism leading to high unemployment rates, but in the U.S. it's capitalism?

Ya can't have it both ways Cupcake.

Dec. 2008 - 7.3% Unemployment rate

Dec. 2012 - 7.8% Unemployment rate

Looks more like Pres. BHO's brand of corporatism is failing the Middle Class.

http://data.bls.gov/timeseries/L...

BTW: Pres. BHO issued an Exec. Order requiring a five day waiting period before Michael Moore could pick up a fork. :)

2cents's picture
2cents

LMAO @ fork : )

2cents's picture
2cents

Emailed to me years ago, had to dig it up...

Two blonde girls were working for the city public works department. One would dig a hole and the other would follow behind her and fill the hole in. They worked up one side of the street, then down the other, then moved on to the next street, working furiously all day without rest, one girl digging a hole, the other girl filling it in again.

An onlooker was amazed at their hard work, but couldn't understand what they were doing. So he asked the hole digger, 'I'm impressed by the effort you two are putting in to your work, but I don't get it -- why do you dig a hole, only to have your partner follow behind and fill it up again?'

The hole digger wiped her brow and sighed, 'Well, I suppose it probably looks odd because we're normally a three-person team. But today the girl who plants the trees called in sick.

The Big Dog's back

So you are agreeing President Obama's policies have reduced unemployment. Praise be the Lord, even a blind squirrel finds an acorn once in awhile.

Contango

@ Dog:

News Flash: 7.8% is larger than 7.3%. It's worse than four yrs. ago.

More like Fed Chair Bernanke's annual buying of nearly $1T in U.S. Treasuries and MBS, while paying the U.S. Treasury almost $100B in interest payments a yr. is helping to keep the economy alive.

Pres. BHO’s policies are doin’ squat.

2cents's picture
2cents

The unreported have stopped looking, the extra food stamps handed out have not helped!

Contango

Some use the U-6 number as the "real" unemployment rate. It's 14.4%

http://www.bls.gov/news.release/...

A better indicator of employment is the U.S. labor force participation rate. It's worse than 30 yrs. ago.

Dec. 1982 - 64.1%

Dec. 2012 - 63.6%

http://data.bls.gov/timeseries/L...

Pete

Automation is not going away. Evolve with it or get left in the dust. It is a simple equation.

Contango

Just happened to read an old column in the WSJ about robots.

Google is spending millions on "driverless car" research. Why?

The up and coming 78 million baby boomers are the answer.

You want tens of millions of seniors on the road in the future? Scary thought.

Or maybe we could hire millions of ghetto dropouts to drive 'em around? :)

http://online.wsj.com/article/SB...

The Big Dog's back

Moderators have removed this comment because it contained Personal attacks (including: name calling, presumption of guilt or guilt by association, insensitivity, or picking fights).

Pete

You & Kimo? For once I agree with you

pntbutterandjelly

Everyone may want to read, "Brave New World". It's a summation of both good and bad things to come with technology, world events and changing social dynamics. I read it back in 1972 and it been hiting the nail on the proverbial head.