CEO of Carrier’s parent company: Some of those jobs that were saved will be lost to automation

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Given the number of jobs jeopardized by self-driving cars alone, I think Will Rahn summed up the political moment well.

Easy prediction: If Trump’s public musings on labor aren’t more focused on automation than on outsourcing by 2020, that’ll certainly be the case for the next Republican presidential nominee in 2024. The problem will only get worse as technology capable of replicating human decision-making in a non-controlled environment, like driving on a public street, gets better. Skip to 12:30 below and watch United Technologies CEO Greg Hayes mention, almost as an aside, what’s destined to happen to those 800 jobs at the Indiana Carrier plant that Trump and Pence just saved. The robots are coming:

“We’re going to…automate to drive the cost down so that we can continue to be competitive,” he said on an interview on CNBC earlier this week. “Is it as cheap as moving to Mexico with lower cost labor? No. But we will make that plant competitive just because we’ll make the capital investments there. But what that ultimately means is there will be fewer jobs.”…

[A]utomation is the only way that a plant in Indiana that pays about $20 an hour can compete with Mexican plants where workers earn $3 an hour.

John noted last night that Andy Puzder, Trump’s new nominee for Labor secretary, has been a big fan of comprehensive immigration reform in his role as CEO of the Carl’s Jr and Hardee’s fast-food chains. Which stands to reason: In an industry with lots of positions for low-skilled workers, Puzder’s looking to cut costs by importing a new supply of unskilled labor. What’s been less noticed in the media over the past 24 hours, but which also stands to reason, is that he’s a fan of automation too, for similar reasons. Makes sense for a business owner in his industry — but for the head of labor in a federal government led by the populist Trump?

“I want to try it,” CEO Andy Puzder told Business Insider of his automated restaurant plans. “We could have a restaurant that’s focused on all-natural products and is much like an Eatsa, where you order on a kiosk, you pay with a credit or debit card, your order pops up, and you never see a person.”…

“With government driving up the cost of labor, it’s driving down the number of jobs,” he says. “You’re going to see automation not just in airports and grocery stores, but in restaurants.”…

“If you’re making labor more expensive, and automation less expensive — this is not rocket science,” says Puzder.

Superficially, his position is less pro-automation than it is anti-minimum-wage. Hold down the costs of human labor, Puzder’s saying, and the pressure on business owners to automate as an alternative will slacken. Fair enough, but automation’s going to get less expensive whether the minimum wage is rising or not. The question for him and Trump is what to do about that. What incentives can you create for employers to stick with human labor? How much more are consumers willing to pay for a product that’s been made, or driven, by people rather than by machines?

Puzder’s affinity for robots isn’t all about cost, either. Quote: “They’re always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case.” Again, this is who Trump wants as the face of his administration to the blue-collar workers in the Rust Belt who put him over the top?

The whole interview with Hayes is interesting, by the way, if you can spare the time. He notes at around 7:55 that Trump and Pence never explicitly threatened not to renew UTC’s federal contracts if Carrier went ahead with its outsourcing, but he also says he’s well aware that UTC gets 10 percent of its revenue from federal business. The threat doesn’t have to be made explicit to encourage compliance.

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#engines
#outsourcing
#carrier
#greg hayes
#united technologies