Analysis: Robots lift China's factories to new heights

Sun Jun 3, 2012 6:13pm EDT
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By Don Durfee

BAODING, China (Reuters) - The giant orange robotic arms that swiftly weld together car frames at the Great Wall Motors factory in Baoding might seem like the perfect answer to China's fast-rising labor costs - they don't ask for a raise, get injured or go on strike.

For Great Wall, a private sector Chinese car maker that employs 50,000 workers, the Swiss robots and other machinery that line its bright factory floor produce more than cost savings. The company hopes they will help it build cars good enough to compete with the global auto makers.

"You don't have to be an expert see the (quality) gap between Chinese cars and those made by companies like Audi and Volkswagen," said Li Shaohui, who oversees automatic control engineering for the company. "To beat those competitors we have no choice but to use a higher level of equipment and technology."

From car plants to microchip foundries, China's industrial sector increasingly runs by machine.

According to Nomura, 28 percent of factory machines in China use numerical controls - one measure of automation. That may be far lower than Japan's 83 percent, but China is growing far faster than Japan did at a comparable stage of development, says Ge Wenjie, a machinery analyst with Nomura.

One of the biggest could be Foxconn Technology Group, maker of products for tech giant Apple, which is talking of plans to put a million robots in its factories.

The army of cheap laborers that made China a manufacturing powerhouse is neither as vast as once thought nor as cheap as it was. In response, manufacturers have been spending heavily on machines that will both make them more productive and let them churn out higher quality goods.

That change will pose a growing challenge for U.S., European and Japanese industrial companies not used to competing with Chinese firms in the high-end segments of their markets.   Continued...

A worker walks past machines on a photo and mirror frame assembly line at a factory in Zibo, Shandong Province May 28, 2012. REUTERS/Aly Song