By Jeremy Pollard, CET
Ever-decreasing circles. Then, in a puff of smoke and a burst of flame, it all collapses at the center. Is that what's coming? Here's what I mean.
I had lunch with a good friend, and he was lamenting about his job. He is a private developer of software applications, and one of his main clients is in the automotive industry. This is where his lamentations come from.
GM's sales were down 25% in June, and as someone in the biz said, "The consumer is incentive-numb. Why buy now when it will be cheaper later?"
Many consumer and financial people had been saying for months, maybe years, the incentive game would eventually bite the hand that offered it. Many of the "get it now, pay later" schemes only work against the product flow at some point. My buddy's client has found that out.
That's not why I'm here, though. It's the underlying issues that concern me. Technology is the reason we are here, and it may be the reason why we will disappear.
Bill Joy is Sun Microsystems' technology evangelist. In his "Why the Future Won't Need Us" article in Wired magazine, he lays out the technology issues that confront us and how our insatiable appetite for improvements and productivity, and ultimately the bottom line, will put us out of work because the technology will do it for us.
Are we close?
I have pounded the table for a number of years on how the industrial marketplace is being driven by the commercial side. We have our niche, but the field where we grow our produce is not ours, but theirs. Microsoft-developed; Rockwell Automation and Omron and Siemens and Schneider Electric and GE Fanuc, et al., applied.
We are more tightly coupled to the world than ever before. Fast and always-on connections, information everywhere, portability, and accessibility are charging forward.
I also know the quarter-by-quarter mindset of North American business needs to be examined. It's all about money.
You might be thinking: Of course it's about the money! China is a technological paradise with low wages and effective productivity. The technology conferences that go on over there are huge. Many North American manufacturers have located new plants in China for one reason-,money.
I remember a story from a Canadian steel manufacturer some 20 years ago. He said he could ship the raw materials to make high-grade carbon steel to China, and bring finished product back to Canada at a lower cost than he could make it for. And the Canadian steel industry is nowhere near as healthy today. Bethlehem Steel? Wasn't it a job for life?
Seems the manufacturing location of choice has changed, so the jobs have left. It's not that there can't be more jobs; manufacturing has been driven away in search of higher profits for that shareholder meeting.
In my friend's case, his ultimate customer has just lost some business. There's no technology in place to maintain the business. And that's really strange because the president would rather spend $100,000 to replace two people than to keep them.
He came to realize the lack of jobs means there are fewer people to buy the goods in the first place. No working people, no income to buy goods...and so on. Although he said he understood, he made no bones about it not being his responsibility.
Then whose responsibility is it? Ahh, those ever-decreasing circles.
This was the same argument 25 years ago when the first PLC hit the street. High unemployment from replacing people with technology was the fear. But it didn't turn out that way. More jobs were created due to the technology. The non-skilled jobs were the ones that suffered.
Seems the skilled jobs are next on the hit list. Ask a guy packing groceries if he knows how to write PLC code. You might be surprised by the answer.
Technology will lead us into the future, but what will the future hold? Seems no one knows. But if the future of manufacturing isn't in your own back yard, then, as an OEM, are you prepared to do business elsewhere?
We are consuming, but not producing. Latest reports put North America capacity utilization at 74.8%. Higher technological levels, faster time to market, greater ability to respond. When do we meet the point of diminishing returns?
I think I see smoke on the horizon.