Ford Explores Automation to Cut Costs, Balancing Labor Agreements
Ford is investigating automation possibilities to reduce expenses, as revealed by Ford CFO John Lawler. While automation can enhance efficiency and safety, it may not decrease labor costs or workforce size. Meanwhile, automakers like Ford must navigate labor agreements, such as the recent UAW deal, which may impact their automation strategies.
Automation, while expensive and task-specific, can improve assembly line efficiency and worker safety. Ford, like other automakers, is exploring these opportunities. However, the high cost of installing robots makes them suitable only for specific tasks, such as lifting heavy objects.
Automation can also make work easier for employees, allowing them to extend their careers. For instance, it can help delay retirement for assembly line workers. Yet, automakers may not use robots to offset rising labor costs due to agreements like the United Auto Workers (UAW) deal. Stellantis, for example, agreed to significant wage increases during UAW negotiations.
Despite these agreements, replacing humans with robots at scale is not made more likely by the UAW deal, according to Dan Hearsch of AlixPartners. However, excessive reliance on robots can lead to issues, as seen in 2018 when Tesla had to halt production at its Fremont plant due to over-reliance on automation and understaffing of human workers.
Ford's exploration of automation to lower costs is balanced by the reality that it may not reduce labor expenses or workforce size. The UAW deal and other labor agreements further complicate automakers' automation strategies. While automation can enhance safety and ease work for employees, it must be implemented judiciously to avoid production disruptions.
