Foxconn to install three million robots over three years: outsourcing to machinery

The more things change, the more they stay the same. U.S. manufacturing workers have had to hit the skids as companies moved their factories overseas to places like China. That was, of course, due to cheaper labor. It's not surprise, therefore, to hear that Foxconn plans to replace "some" of its workers with 1 million robots, within a 3 year timeframe.

It's also not a surprise for another reason. Earlier, Foxconn's parent company Hon Hai said profits were down due to the complexity of making iDevices, and noted that it was looking for ways to increase efficiencies in manufacturing. Efficiencies, in this context, equals expenses, and salaries are usually the most prevalent expense in any company.

In a move that certainly probably dampened the move, Hon Hai chairman Terry Gou made the statement at a workers' dance on Friday night. He added that the robots will be used to do routine work such as welding and spraying.

Foxconn currently employs 1.2 million people, with about 1 million of them based on the Chinese mainland. The company currently has about 10,000 robots; Gou said the number will be increased to 300,000 in 2012 and to about one million within three years.

Although the furor has mostly died down, Foxconn was in the spotlight in 2010 over a rash of suicides, mostly at its Shenzhen plant in southern China. This year, a recent explosion at its new Chengdu plant brought the company more unwanted attention.

Just as when companies shipped jobs overseas to places like China, the question must be asked: if all of this comes to pass, who is going to buy all the products made by the robots?

Workers in China and other places like Malaysia and the Phillipines are paid much lower salaries than in the U.S. Clothing manufacturers often pay a few cents per hour, and force their employees to work seven days a week, despite rules against that practice.

The U.S. has been reduced to a position in the world economy where much of its contribution is based on consumption. China is nowhere near that status. If, however, all its jobs are roboticized, what then? To be clear, corporations must maximize their profits for their shareholders, so none of this is against the law, per se, but the undending spiral must end sometime.