NPE 2015, the glorious feast of technology, happened at an important point for the plastics industry. Things look great right now. Longer-term, however, the industry faces major challenges of so-called “soft skills” involving people — in a world of robots and wage pressures.
What a fascinating time for U.S. manufacturing. Factory output has passed the pre-recession level. Capacity utilization is back to the healthy 80 percent level. Americans bought some 16.5 million vehicles last year. Gas is cheap. Interest rates are low.
Processors are ready to replace older machinery. More companies now have a planned schedule for doing that each year, instead of simply waiting until the aging metal finally bites the dust.
For plastics, the third-largest manufacturing industry in the United States, it all came together at the Orange County Convention Center. Parts zipped out of machines. Automation was everywhere. Injection molding and other plastic processes have gone cellular, doing everything right at the press. Five- and six-axis articulating robots grab parts out of molds — some already assembled by two-shot molding or in-mold assembly — and present them to a camera inspection system, decorating station, electronic tests, almost anything you can imagine.
Every single part can be a perfect one. You can use in-mold sensors, tied to the machine controller, to know if a part is good or bad, even before the mold opens. Last week in Orlando, the industry got an early glimpse of sensors that can “listen” to a motor, pump or gearbox and let you know when the oil is low, and warns of mechanical problems before they happen.
And 3-D printing was everywhere, highlighted by Arburg's Freeformer — now for sale in the United States. Energy efficiency gains. In-mold labeling. Blown film with so many layers that, if you still use your fingers to count, you might need a third hand — or for microlayer cast film, an extra 20 hands.
The Plastics News Business Monitor Index for the first quarter of 2015 — analyzed by economist Bill Wood — comes in at a strong 104.3. A value above 100 means an increase in business activity levels. New orders and production are especially robust.
It's a bright picture. But what about the future? That's as complicated as the union work rules at McCormick Place …
Americans are talking about manufacturing again, as the sector led the economy out of the Great Recession. Americans think a strong manufacturing base is very important to our standard of living. Wages are finally beginning to move up, as job growth gains steam after more than five years of a sluggish recovery. Reshoring, bring it on.
But what about the pay? A report last November by the National Employment Law Project said that, although manufacturing has been surging in the last few years, the jobs don't pay the high wages of the past. The title of report says it all: “Manufacturing Low Pay: Declining Wages in the Jobs That Built America's Middle Class.” NELP is saying that more than 1.5 million factory workers, or one of every four, make $11.91 or less. More than 600,000 make $9.60 or less.
The report says that real wages for manufacturing workers declined by 4.4 percent from 2003 to 2013, nearly three times faster than workers overall. One problem is the increased use of temporary workers. And the report said generous subsidies governments dangle to lure manufacturing, don't always deliver the good jobs as promised.
Some of this wage erosion — especially at automotive parts suppliers — is undoubtedly because the new jobs are nonunion. Even the United Auto Workers accepted a two-tier wage scale. Of course, unions are not much of a factor in the plastics processing sector — outside of some of those Tier 1 auto supplier plants.
Plastics still has its share of low-skilled, entry-level jobs, and a lot of molders do hire through temp agencies like Manpower. At its best, that can be a way to prove someone is a good worker who shows up on time and pays attention, a person worthy of full-time employment. At its worst: Cheap labor, no strings attached.
Then comes the impact on human workers of automation, so abundant in Orlando this week. If you talk to any processor, or robot salesperson, you will hear this: Robots don't replace employees. Indeed, robots improve safety and quality. They free our employees from the mundane, boring factory jobs so they can put their skills to better use.
A recent Wall Street Journal article, “Jobs and the clever robot,” had this subhead: “Experts rethink belief that tech lifts employment, as machines take on skills once thought uniquely human.” Google is working on a driverless car. Rio Tinto uses self-driving trucks and drills at its iron ore mines in Australia.
The WSJ talked to economists who think recent advances may signal that “automation technology is near the tipping point, when machines finally master traits that have kept human workers irreplaceable.” What if there are people who want to work but cannot?
The Journal notes this bleak view is in the minority among economists. I sure hope so.
America has an income gap. The middle class is shrinking, if you haven't already heard this a thousand times from President Obama, but it does ring true.
We want to believe that America can close the income gap if we start closing the skills gap. If we can boost vocational training and get the young people interested in manufacturing, the middle class can be saved.
Just keep it between us humans, OK? Don't breathe a word to one of those two-armed Baxter robots —he/she/it will just raise its eyebrows. And turn its eyes in your direction … Or is Baxter rolling its eyes in disgust at you? Inept human.
Don't look at me, Baxter. ... Don't LOOK AT MEEEEEE ……
Bregar is a Plastics News senior reporter.