The fuzz and maybe even fear about robotics taking over jobs that used to be done by people is still growing. I came along an article about Nike, a company that’s always trying to be ahead of the curve in the sports market.
Probably everyone of you reading this knows what a Fitbit is, what some of you might not know is that Nike, already back in 2015, started working together with Flex, the high-tech manufacturing company that produces the Fitbit, among other products. Nike’s purpose of this partnership is to reduce the need for human labour, which is a great cost in the labour-intensive process of making a running shoe. In fact the required labour is as big as the 493000 line workers, working in 15 different countries. All involved in the production of just the Nike footwear. For all the products sold by Nike, its contracted factories employ 1.02 million workers.
Flex’s facility in Mexico has become one of Nike’s most important factories. Not only because of its increasing part in Nike’s total production, but also, maybe even more importantly, because of the developed innovations from there. Such as laser-cutting an automated gluing. Analysts from Citibank estimate that if all Nike’s 2017 Air Max would be produced by the Flex manufacturing process labour costs would be cut in half and material costs would be reduced by 20%. If almost one third of Nike’s footwear, sold in North America would come from Flex’ facilities, savings of 400 million USD would be possible based on labour and material cost reductions, increasing the earnings per share by 5%.
And although Nike said: “We don’t expect there to be any displaced workers. We are going to need just as many manufacturing jobs in our source base.”, they are also saying that production facilities will move closer to its key customers in North America.
This makes me wonder what will happen to the debate about abusing low-paid workers in developing countries after many of their jobs will be displaced.
Article can be found here: https://www.ft.com/content/585866fc-a841-11e7-ab55-27219df83c97