|
I agree we are in the transition to more automation but we're not there in enough sectors. Labor cost still matters. But it has come down from >80% of the cost to <20%of the cost of most products.
For example, the company I work for operates a plant with about 800 people in Malaysia making magnetic components (e.g. transformers of all sizes). Not a ton of automation there. Too many different models to invest in full-automation tooling. Similar for our Mexican factory (about 500 people). On the other hand, our sister division in Austria has a very high-automation production line making automotive components using many creepy robot arms.
When you say it doesn't matter where the automation goes you are neglecting huge tax incentives on where capital gets spent. I don't know the exact tax comparison today but some years ago the Asian countries allowed faster depreciation of capital spent there than America. Being able to write the costs off over three years instead of five or more is a big deal if you have sales to justify it.
And part of the original argument is not valid. Just because manufacturing moves elsewhere does not mean design does as well. A large number of customers (and ourselves) make stuff off-shore yet still design and develop locally.
|