What happens when a trio of technological, political, and social problems hit the sheet metal industry harder than ever before? We’re faced with making tough decisions and finding innovative solutions:Automation
The rise of mobile robots and cobots (a combination of collaborative robots), boosts productivity and lowers the accident rate in fab shops, but the concern of job loss is evident -- and being swept under the rug.
Automation is a real threat to the labor force across many industries, including sheet metal, but Machine Design argues that "though workers could be displaced, jobs are actually on the rise."
The only difference is that these careers are for those who understand, improve, and fix these robots instead of those who perform the same work. Influx of smart factories like Bystronic, an Illinois-based manufacturer, spur what’s being called The Fourth Industrial Revolution.
"Fast-spreading technologies like robotics and 3D printing will exacerbate this trend."
The Boston Consulting Group, a Bethesda-based business management expert, has estimated that while "a human welder...earns around $25 per hour, including benefits, the equivalent operating cost-per-hour for a robot is around $8."
Lack Of Interest
Did you know that the U.S. has lost 5 million manufacturing jobs since 2000? Today, fewer than one in ten American workers are employed in this sector.
Aside from technological changes, it's known as the Great Shift.
According to CNN Money, "Workers transitioned from the fields to the factories. Now they're moving from factories to service counters and healthcare centers. The fastest growing jobs in America now are nurses, personal care aides, cooks, waiters, retail salespersons and operations managers."
So, even though "blue collar workers," like sheet metal fabricators and welders make three times the average minimum wage, people are simply moving onto retail and healthcare.
"Buy American, Hire American"
This is the official name of President Trump’s latest executive order, signed in mid-April 2017 at Snap-On Tools, a Wisconsin-based manufacturer. It's meant to "protect workers and students like you," he said to a crowd of technical students and manufacturing employees.
According to CNN Politics, "Trump said the order would 'aggressively promote and use American-made goods and to ensure that American labor is hired.'"
This order was signed because the U.S. Administration believes the country’s "grit" and "craftsmanship" have been taken advantage of by those abusing H1-B visa programs and "lax enforcement of Buy American laws." Trump also decried the World Trade Organization (WTO) and North American Free Trade Agreement (NAFTA) before signing.
What does this mean for the steel and sheet metal industries?
According to Reuters, many steel executives and analysts had questions about how this would impact a global industry that heavily relies on foreign collaboration. While Buy American laws have been in place for years, "contractors frequently find loopholes to use imported steel," including tin plates and semi-finished products.
However, closing those loopholes creates fresh problems for U.S.-based companies.
For example, concerns in the construction sector include how strict the definition of what constitutes U.S.-made products will be. Does the origin of scrap metal matter? How long will it take to see a significant difference in American manufacturing jobs?
This executive order also puts a hefty price tag on Trump’s $1 trillion infrastructure spending plan, which was a key campaign promise and an attempt to win the votes of those in trade careers, according to Fortune.
Buy American, Hire American raises prices on construction materials, making schools, oil pipelines, highways, and bridges more expensive to build.
"Over the past 12 months, prices have increased 19 percent on steel mill products [and] 17 percent on copper and brass mill shapes."
In the short term, Buy American "[calls] for federal agencies to initiate a 220-day review of how they can strengthen protections on American-made goods. The order also [demands] that publicly financed projects use American-made steel."
Only time will tell the long-term effects of this bold move.
For more information on the future of the sheet metal industry, download Kaempf & Harris' Forecast Summary below: