#611 – Automation is Necessary

Posted on | The Agurban

Automation is Necessary

A couple weeks ago in our Agurban “The Real Reason the U.S. is Losing Factory Jobs”, we outlined some key points from an Associated Press report entitled Mexico Stealing Factory Jobs? Blame Automation Instead. This week we would like to share another portion of that report that highlights a long-term customer of ours, Kennametal, and how they see their future.

CEO Ronald De Feo is overseeing a turnaround at Kennametal, a Pittsburgh-based industrial materials company. The effort includes investing $200 million to $300 million to modernize Kennametal’s factories while cutting 1,000 of 12,000 jobs. Automation is claiming some of those jobs and will claim more in the future, De Feo says.

“What we want to do is automate and let attrition” reduce the workforce, he says.

Visiting a Kennametal plant in Germany, De Feo found workers packing items by hand. He ordered $10 million in machinery to automate the process in Germany and North America.

That move, he says, will produce “better quality at lower cost” and “likely result in a combination of job cuts and reassignments.”

For manufacturers to remain competitive, and therefore, in business, they must adopt these automation efforts. Manufacturing is no longer a low-skill job, but rather, is becoming high-tech.