Robots Are Looking Better to Detroit as Labor Costs Rise

livemint.com:

Automakers are looking to an old friend to help offset rising labor costs: robots. For decades, car companies have increased automation inside their factories. Now, auto executives are looking more closely at this approach, to address a rising labor bill and take advantage of more sophisticated technology.

Competition from relative newcomers like Tesla, which has been more aggressive in deploying this factory technology, is also nudging more traditional auto manufacturers in this direction. On a recent investor call, Ford finance chief John Lawler pointed to “opportunities in automation" when asked about how the company plans to cover the cost of its new labor contract. He also cited other possible offsets, such as reducing the complexity of Ford’s vehicles.

While automakers have been moving to automation for some time, rising labor costs are poised to accelerate the adoption of such technologies, said Laurie Harbour, president of Michigan manufacturing consulting firm Harbour Results. “Automation is the future. More so than we’ve ever seen," she said.

United Auto Workers members approved a labor contract in late 2023 with Ford, General Motors and Jeep maker Stellantis that included a record 25% wage increase over four years and marked the sharpest labor-cost increase for the companies in recent memory. The effect from the deals in Detroit quickly rippled through the industry, with Toyota Motor, Hyundai Motor and other nonunionized automakers increasing wages to stay competitive. Detroit executives have said the contracts were richer than they had planned for, and they are strategizing ways to blunt the increased costs.