A key repetitive promise from then candidate Donald Trump was that he would bring back jobs—especially, manufacturing jobs.
Although I wish him well, I have my concerns.
After World War II, much of the world was in tatters. It took decades for foreign nations to rebuild. Although this gave the U.S. manufacturing machine a distinct advantage, it was not a permanent advantage. As part of the agreement to surrender and end the war, foreign companies that previously supplied the Japanese and German war machines were no longer allowed to build weapons.
Instead, they turned to building vehicles and the U.S. global dominance of manufacturing was slowly challenged.
Fast forward 70 years and many assume the decline in “traditional” U.S. manufacturing has been the result of jobs being outsourced to emerging markets. This may have been so once upon a time, but not now. As such, President Trump will face hurdles when it comes to “bringing these jobs back to America.”
The hurdle does not come from other countries ability to compete better or smarter than Americans. Rather, it is the fact that these jobs often don’t exist any longer…at least not as performed by humans.
Instead, the constant evolution of technology has allowed companies like Fanuc, an industrial robot maker, to build the largest market share for production machinery while churning out 40% operating profit margins.
If we want proof of how profoundly technology and automation has changed the world, we need to look no further than the Toyota factory in San Antonio where they produce the rapid selling Tundra and Tacoma trucks.
Toyota started production in 2006 recognizing that Texans buy more trucks than any other state, resulting in Toyota selling 30% of their product in the Lone Star state.
Impressively, Toyota produces about 230,000 trucks per year in San Antonio. Their manufacturing facility is over 2 million square feet and utilizes more than 400 robots assembling pieces requiring more than 2,700 precision welds. Once this task is completed, another 90 robots deliver near-flawless paint jobs.
In the end, 2,000 plus parts are crafted together resulting in a new truck every 62 seconds. This is clearly a superior production format when compared to the way vehicles were assembled in the 1970’s.
Despite this robotic revolution, the need for humans in manufacturing has not gone away—but it has changed. According to the Bureau of Labor Statistics, this past November there were 324,000 manufacturing jobs currently unfilled. This was an increase from 238,000 a year prior.
This is an interesting dilemma that presents our economy with a significant opportunity if the appropriate training and skill set is available.
Obviously, robotics offer efficiency while increasing safety and ergonomics for a healthier work environment. However, they cannot do everything.
As such, according to Glassdoor.com, a Toyota line assembler can make $33,000 per year while an engineering specialist can bring home $75,000 per year. Mechanical and product engineers can earn $67,000 to $86,000 per year.
Similarly, employees working for Fanuc, the robotics maker used by Toyota, can also do well. A paint process engineer or product development engineer can earn more than $70,000 per year while a programmer analyst can net more than $100,000.
However, to earn these incomes the mindset must change. In a world so heavily impacted by technology and automation, one cannot come out of high school and expect to make a living that will support a family of four. To fill the jobs that are in demand by the modern workforce, more training, education and certification will be required.
“Bringing back the jobs” may help us temporarily. However, to truly give our national economy strength, a longer-term solution is to broadly invest and support technical training programs.
Automation and technology will never stop evolving. A robust emphasis on training and education are necessary to succeed today. Furthermore, the demands of tomorrow’s workforce will require even more training, education and technical skills to remain relevant and competitive.
Dave Sather is a Certified Financial Planner™ and owner of Sather Financial Group. His column, Money Matters, publishes every other week.
