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The effect of automation in Manufacturing in the world

kpotter

Diamond
Joined
Apr 30, 2001
Location
tucson arizona usa
I am a very late adapter to the cnc automation world. I have been in business 25 years and never owned or ran cnc. I have 13 fulltime employees and we had dedicated machines to produce our products. I resisted cnc till about 4 months ago. I bought a new lathe and mill. I payed a programmer to set up and program them and we operate them. It used to take 3 people running as hard and as fast as we could push our k and t mills to produce 100 parts in a single day. That was our record and we were truly running faster than we should and taking big risks. We set up the cnc mill to do this product, running it slow and not even trying to be efficient we produced 233 parts with one person pushing the button and doing other stuff. The parts are better and now they cost us a fraction. I can tell you what happened to all the workers they got replaced. The payment on the mill is no where near the cost of an employee. I was looking to hire more workers when a friend pulled be aside and smacked me.
 

Spinit

Titanium
Joined
May 13, 2007
Location
Central Texas
I am a very late adapter to the cnc automation world. I have been in business 25 years and never owned or ran cnc. I have 13 fulltime employees and we had dedicated machines to produce our products. I resisted cnc till about 4 months ago. I bought a new lathe and mill. I payed a programmer to set up and program them and we operate them. It used to take 3 people running as hard and as fast as we could push our k and t mills to produce 100 parts in a single day. That was our record and we were truly running faster than we should and taking big risks. We set up the cnc mill to do this product, running it slow and not even trying to be efficient we produced 233 parts with one person pushing the button and doing other stuff. The parts are better and now they cost us a fraction. I can tell you what happened to all the workers they got replaced. The payment on the mill is no where near the cost of an employee. I was looking to hire more workers when a friend pulled be aside and smacked me.

I like your story and have always respected your efforts in the past using the manual machines. I also know it is the reality of CNC Machines and what they can do and bring to any shop. I see the difference clearly over many years and concluded years ago that this is a better way and that overall people in our trade will move to shops with a job open. Manufactured goods have increased overall because of CNC and it seems employment has been catching up to the increased demand. It also lowers pay for less skilled Machinists as the high skill level does not seem to be needed because of the reliability of CNC's. CNC's are here to stay. Yes and increased automation is coming and there is no doubt.
 

Spinit

Titanium
Joined
May 13, 2007
Location
Central Texas
I am curious since you need less machines and employees is it a consideration to utilize your existing machines if you can find work for them or is it the case that the obvious path forward is to go CNC's? It seems that changing would be the best way.

What kind of CNC's did you decide on and have you gotten in both a mill and a lathe? This is exciting considering the great increase in quality and production plus the icing on the cake of reduction in operating costs.

 

Shawnrs

Stainless
Joined
Mar 30, 2016
I like your story and have always respected your efforts in the past using the manual machines. I also know it is the reality of CNC Machines and what they can do and bring to any shop. I see the difference clearly over many years and concluded years ago that this is a better way and that overall people in our trade will move to shops with a job open. Manufactured goods have increased overall because of CNC and it seems employment has been catching up to the increased demand. It also lowers pay for less skilled Machinists as the high skill level does not seem to be needed because of the reliability of CNC's. CNC's are here to stay. Yes and increased automation is coming and there is no doubt.

I would put a highly skilled person on my CNC vs a low skilled person. I want my machine to make good parts and not junk. I find it hard to train lazy and stupid on our machines, the seem to think just plop the stock in a vise or fixture and parts come out 15 minutes later. The nice thing about our CNCs are that 1 guy can maintain 2 or 3 machines at a time. We can put button one while the skilled are setting up the next machine.
 

Shawnrs

Stainless
Joined
Mar 30, 2016
I am a very late adapter to the cnc automation world. I have been in business 25 years and never owned or ran cnc. I have 13 fulltime employees and we had dedicated machines to produce our products. I resisted cnc till about 4 months ago. I bought a new lathe and mill. I payed a programmer to set up and program them and we operate them. It used to take 3 people running as hard and as fast as we could push our k and t mills to produce 100 parts in a single day. That was our record and we were truly running faster than we should and taking big risks. We set up the cnc mill to do this product, running it slow and not even trying to be efficient we produced 233 parts with one person pushing the button and doing other stuff. The parts are better and now they cost us a fraction. I can tell you what happened to all the workers they got replaced. The payment on the mill is no where near the cost of an employee. I was looking to hire more workers when a friend pulled be aside and smacked me.

Imagine making a fixture that holds a lot of parts and loading it at night when you close the shop only to come in the next day to have them all completed.
 

Spinit

Titanium
Joined
May 13, 2007
Location
Central Texas
That is really a worthy thing running lights out so to speak. It takes a lot of tweeking to get that just right I bet.

I read one article which claimed that the pilot-less vehicles are the big wave for investors with a lot of money being invested into that.
 

kpotter

Diamond
Joined
Apr 30, 2001
Location
tucson arizona usa
I ran a whole months worth of parts in about 10 hours using these machines. They are running slowly so they dont make a bunch of mist and I dont have to listen to the noise. Even running slow they paid for themselves in a couple months. I could take on other work but there is no reason to deal with someone beating me up on price and breathing down my neck to finish their stuff. I used to be that guy, I got tired of begging to get work done by job shops.
 

Spinit

Titanium
Joined
May 13, 2007
Location
Central Texas
I ran a whole months worth of parts in about 10 hours using these machines. They are running slowly so they dont make a bunch of mist and I dont have to listen to the noise. Even running slow they paid for themselves in a couple months. I could take on other work but there is no reason to deal with someone beating me up on price and breathing down my neck to finish their stuff. I used to be that guy, I got tired of begging to get work done by job shops.

Yes since you were able and willing to get the machines you discover that in your case it really has become a boom. What got you to this point is also as important. Just the pressure being off of your shoulders helps a lot.Take care of your customers and retain them is where you are and also you now have all of this potential for growth before you.
 

Spinit

Titanium
Joined
May 13, 2007
Location
Central Texas
Automation has marched forward and will continue as long as it is a sustainable investment. Displaced workers must find where they can find a new way to earn a income. The American dream is much effected to the extent that generations of Americans since 1940 are said to be in decline.

Article also says that the word Luck is increasingly used today in connection with the American dream.

Is the American dream really dead?

It is scary when we see that local government will have to give massive tax breaks to attract jobs to a area. What is bad is with money given in tax cuts becomes much more cost than benefit and so the agreement is a huge loss for local government to have money to provide needed services we expect from government.

Some have made the point that these kinds of incentives should be outlawed. That might mean that such Tax breaks and subsidy from government has become a losing arrangement.
 

plastikdreams

Diamond
Joined
May 31, 2011
Location
upstate nj
Automation has marched forward and will continue as long as it is a sustainable investment. Displaced workers must find where they can find a new way to earn a income. The American dream is much effected to the extent that generations of Americans since 1940 are said to be in decline.

Article also says that the word Luck is increasingly used today in connection with the American dream.

Is the American dream really dead?

It is scary when we see that local government will have to give massive tax breaks to attract jobs to a area. What is bad is with money given in tax cuts becomes much more cost than benefit and so the agreement is a huge loss for local government to have money to provide needed services we expect from government.

Some have made the point that these kinds of incentives should be outlawed. That might mean that such Tax breaks and subsidy from government has become a losing arrangement.

It has to be amicable for both sides. Do some cities give the farm away on some deals, most likely...this is betting on other companies to come for lesser breaks. Around here this takes place in the worst areas like Newark, Patterson, Irvington, and the like. Don't hear about it much near me.
 

Spinit

Titanium
Joined
May 13, 2007
Location
Central Texas
I can not blame them really unless it costs way too high to have that arrangement. Taxes vary place to place anyway and the costs of things are different also in different areas. Before even negotiating with a large employer a city may have advantages before any negotiations take place.
 

Mcgyver

Diamond
Joined
Aug 5, 2005
Location
Toronto
It is scary when we see that local government will have to give massive tax breaks to attract jobs to a area. .

its not scary, its wrong. Get your fiscal house in order and lower taxes for all (if you think that is the main thing attracting jobs) rather cutting special deals to who ever has 1) lobbied the hardest, 2) contributed to campaigns the most, 3) will lead to the best headline or 4) who simply happens to be a buddy. Its another form of favoritism and corporate welfare; taxpayers should be incensed about this and thinking capitalists everywhere should reject it. I'm creating jobs in my business, working and pay tax so the #[email protected]#% politicians can give it to another company? All so some crooked provincial leader gets the get shovel turning ceremony headline? GRRRRRRR
 

CarbideBob

Diamond
Joined
Jan 14, 2007
Location
Flushing/Flint, Michigan
Tax breaks and concessions should increase the number of people paying taxes, buying things, keeping up property values, supporting local businesses.
If not then yes, a bad investment.

Flint gave all kinds of tax breaks to GM through the 60s, 70's, 80's. and many complained it unfair.
Now we don't have these tax breaks to complain about anymore.
I think things were better in my town when we were giving millions in such breaks, corporate welfare or whatever you'd like to call it.

Very arguably they were not directly paying enough taxes to support the infrastructure they were using and it's cost to the local government.
They were however providing many paychecks that paid all sorts of taxes.
All the concessions in the world would not have changed what happened but the local effect when these non tax-paying entities left can't be denied.

Sort of a death spiral.
Money is needed but fewer to pay in. Higher tax rates are then needed but the population can't pay it.
So a government desperate to work in a budget without cash cuts corners everywhere they can, even on your water supply.
Funding for law enforcement goes down the tubes and the police force shrinks.
The local gangs take over "policing or protecting" neighborhoods. They extract a "tax" of their own for said service.

Looked at with a narrow view such giveaways are bad but it's a very complicated equation.
I'd take a tax free zone any day to have the 80,000 jobs back.
Bob
 

Mcgyver

Diamond
Joined
Aug 5, 2005
Location
Toronto
is that a rare civilian promotion of pork barrel politics lol? Think big picture. Politics and gov is supposed to create an environment with all treated equally...not pick and chose. If lower industrial taxes are the key to attracting business, then lower them for all. Hows it not wrong for two businesses, possibly competitors, and one pays all the tax so other doesn't have to be because some government crook pointed the finger at one? What if the mayor who I know came by and gave me zero tax and you the finger, that ok with you? its just complicated?

Next up, what net is accomplished? A tax break isn't creating jobs, its moving them from one place to another. Think of the hardship in the place the plant is leaving because some politician decides to shoulder their tax burden on their citizens in the new place. The net results is NOT new jobs, its broke municipalities and citizens suffering the tax burden; as you described it the death spiral. Just make it illegal to pick favorites, tax should apply equally to all.

Knowing corporate welfare is wrong and that the rules and the law should apply equally to all is NOT a complicated equation. Its when your politicians push that aside and start doling out cash for the headlines that things get complicated. In Ontario there is a provincial law forbidding municipalities from offer tax incentives. It works very well, is never an issue and the economy has been very strong for a long time. The municipalities still compete with each and try to have the lowest industrial taxes, but its by having the lowest cost for all businesses there, not doling out to a select few. (While municipal politicians can't do that here, our past provincial crook sure did. :(, thats another sad tale)

I'm all for lower tax, but it should not be discretionary. There is a strong argument backed up by lots of evidence that industrial growth tends to happen in places that tax it less. So tax it less if you want industrial growth, but don't play favorites.

Tax breaks and concessions should increase the number of people paying taxes, buying things, keeping up property values, supporting local businesses.
If not then yes, a bad investment.

Flint gave all kinds of tax breaks to GM through the 60s, 70's, 80's. and many complained it unfair.
Now we don't have these tax breaks to complain about anymore.
I think things were better in my town when we were giving millions in such breaks, corporate welfare or whatever you'd like to call it.

Very arguably they were not directly paying enough taxes to support the infrastructure they were using and it's cost to the local government.
They were however providing many paychecks that paid all sorts of taxes.
All the concessions in the world would not have changed what happened but the local effect when these non tax-paying entities left can't be denied.

Sort of a death spiral.
Money is needed but fewer to pay in. Higher tax rates are then needed but the population can't pay it.
So a government desperate to work in a budget without cash cuts corners everywhere they can, even on your water supply.
Funding for law enforcement goes down the tubes and the police force shrinks.
The local gangs take over "policing or protecting" neighborhoods. They extract a "tax" of their own for said service.

Looked at with a narrow view such giveaways are bad but it's a very complicated equation.
I'd take a tax free zone any day to have the 80,000 jobs back.
Bob
 
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Spinit

Titanium
Joined
May 13, 2007
Location
Central Texas
is that a rare civilian promotion of pork barrel politics lol? Think big picture. Politics and gov is supposed to create an environment with all treated equally...not pick and chose. If lower industrial taxes are the key to attracting business, then lower them for all. Hows it not wrong for two businesses, possibly competitors, and one pays all the tax so other doesn't have to be because some government crook pointed the finger at one? What if the mayor who I know came by and gave me zero tax and you the finger, that ok with you? its just complicated?

Next up, what net is accomplished? A tax break isn't creating jobs, its moving them from one place to another. Think of the hardship in the place the plant is leaving because some politician decides to shoulder their tax burden on their citizens in the new place. The net results is NOT new jobs, its broke municipalities and citizens suffering the tax burden; as you described it the death spiral. Just make it illegal to pick favorites, tax should apply equally to all.

Knowing corporate welfare is wrong and that the rules and the law should apply equally to all is NOT a complicated equation. Its when your politicians push that aside and start doling out cash for the headlines that things get complicated. In Ontario there is a provincial law forbidding municipalities from offer tax incentives. It works very well, is never an issue and the economy has been very strong for a long time. The municipalities still compete with each and try to have the lowest industrial taxes, but its by having the lowest cost for all businesses there, not doling out to a select few. (While municipal politicians can't do that here, our past provincial crook sure did. :(, thats another sad tale)

I'm all for lower tax, but it should not be discretionary. There is a strong argument backed up by lots of evidence that industrial growth tends to happen in places that tax it less. So tax it less if you want industrial growth, but don't play favorites.

Sustainability is a big thing. Giving tax incentives for wealthy corporations is in principle defeating the purpose of having taxes is not very fair to wealthy or not businesses. It is like specific tax cuts also like reducing the corporate tax. When this is done it reduces taxes for the whole category equally.

It is endless it seems when started that deciding to make the practice against the law is refreshing in a real way. Sports teams will often move their team to another area if tax cuts provided expire. Each state, city, or locality have advantages and disadvantages such as energy resources, labor, educated workforce and other factors.

California (I like California) has a higher tax rate than many States yet they have a lot of very profitable businesses there in the State. It appears (or could be implied) that higher taxes attracts businesses and maybe highlights a important factor and that is lifestyle or quality of life. How tax monies are spent for the greater good of citizens is very important also and it is a selling point to attract business.

Detroit was very hot for some time yet despite all that money, profits, and high pay the city society declined. A highly responsive government which faithfully serves the public interest is a critical feature of a working society. Corruption will eventually destroy this and so respect and the enforcement of the rule of law is critical. When you mention making it (tax breaks) against the law it makes sense.

Just making tax breaks equal adds real clarity with a law and yet down the road another place may choose to give tax breaks. There must be other factors besides tax cuts which would make different places competitive quality of life being one factor I can think of.
 

Mcgyver

Diamond
Joined
Aug 5, 2005
Location
Toronto
You're wading into who and what shouldn't be taxed, a whole different subject and no doubt wll be highly contentious. (btw most economists would say you really can't tax corporations, as all a tax does is reduced retained earnings which at some point down the chain has an individual as it's beneficial owner). My point was much simpler (I'd hope entirely uncontentious) than what category should be taxed, being that fiscal policy should be a framework universal applied based on criteria, not something politicians get to pick and chose which particular entities it applies to ....which is (I think) mostly the case with municipal negotiated tax incentives.
 

Ries

Diamond
Joined
Mar 15, 2004
Location
Edison Washington USA
Its extremely simplistic to say that industrial growth happens in places that tax it less. That might be true, but only if all other factors were equal- infrastructure, financial system that is regulated enough to be safe and trustworthy, a working justice system, a working transportation network, educated populace, and a dozen other major factors.
But, the thing is, even in the USA, those factors are NOT the same from state to state, or even within states.

So we have plenty of examples of places with low tax rates, but so many other undesirable factors, meaning profitable industries and manufacturers choose higher tax areas because the total package makes it possible to be a more profitable business.

NYC, or California (really, the whole West Coast) or London, or Singapore, or Hong Kong- all examples of places with higher taxes, and yet, are big magnets for business.

Taxes are one factor- but, often, given how low actual net tax rates are on corporations in the USA, often a pretty minor one.
Tax rates are more of an ideological burr under the saddle than a practical concern for most US businesses.
I made more money in Los Angeles, consistently, even though the taxes are pretty high- because there was so much business going on in every field. Most people have no idea how much manufacturing goes on in LA- its enormous. There is a steel mill, and pretty much every kind of manufacturer there you can imagine. Bigger, more professional platers, or anodizers, or sandblasters, than in whole states in other parts of the country.

Certainly individuals, especially retired ones, move more based on tax rates. But Boeing, or Microsoft, or Haas, or a few dozen other of the largest and most profitable companies (and exporters) in the USA still keep building more in high tax areas.
 

Mcgyver

Diamond
Joined
Aug 5, 2005
Location
Toronto
Its extremely simplistic to say that industrial growth happens in places that tax it less.

sure, but all things being equal, of course it does. I think its obvious a statement like that implies all things being equal, and equally obviously (i hope) its one of many factors. You're hardly going located your billion $$ company HQ in the Sudan because taxes are 10% lower. Having been in the advisory position to fortune 500's on making those decisions, it as absolutely guaranteed an important factor on where business locate.....along with a list of other criteria.

I guess we're saying the same thing, but a good example of how impactful lower taxes are was the development pattern in the GTA where pretty everything is the same on either side of an imaginary line vs the other, except industrial taxes. There was an exodus to the low tax area.
 








 
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