What To Do About The Long-Term Implications of Automation

The companies you mention absolutely are focused on profit. What you're missing is that the business strategies of companies that are creating new products (big pharma, Tesla, SpaceX, etc.) are working on long term strategies that incur significant investment expenditure in the short term. The first HIV pill took many millions of dollars to create. The rest of the copies of those pills cost little but sell for a lot. That's a general theme when innovating. It's almost always the case for companies going through IPO procedures.

That does not even slightly suggest they aren't attempting to maximize profit. Look at medical appliance and drug costs and the wealth of those in that industry.

They got beat. I don't know the specific of how they got beat, but numerous other companies entered the field in areas that overlapped or directly competed with them. Craftsman tools used to be something in real demand. Now, there are competitive options. The same goes with Kenmore. And,, the number of low end clothing stores and big box outlet stores blossomed bigly. Companies targed Sears customers in every segment and they won.

Perhaps a more interesting question is what Sears would have to have done to try to keep up. What was so wrong with what they did. The same goes for Montgomery Wards. You used to be able to buy a HOUSE (literally) from their catelog. Their catalog business had no real competition. What happened? KrispyKreme lost their business. Why was their brand management so wrong that it brought them down.

And, each of these companies are case studies in business school, where young Americans study to win the profits made by others today.

 

Working in automation on robots in industrial and manufacturing is a GREAT job and can pay you in SIX FIGURES. What's the problem?

 

OK


https://financialrhythm.com/wp-content/uploads/2018/06/profit-by-industry.png

 

You list all these things but do not comment on where we are at relative to the 60's except for household income and on this your analysis is incorrect because it does not look at what a dollar was worth.

The median cost of a house in 1960 was 11,900 ... roughly 2 years salary. The median cost of a house today is more than 200,000 - roughly 4 years salary.

In the 60's someone working at sears could afford a house a car and your wife did not have to work. Good luck doing that today.

These are the numbers using "household income". It gets much uglier if you use individual income. In the 60's household income was often just one income earner - more often today it is two income earners.

 

People will have to adapt and learn skills that take them past a job that can be automated. Doesn't say much for one's skill level if they can be replaced with a machine.

 

Humans are not all the same

Some are outstanding, some are average, and some are rather slow

New forms of automation are coming

But that is no excuse for moving jobs to china which is the more immediate problem than automation

 

Nope

 

Right....the discussion is about automation not China.

 

So if an American worker has no job because he was replaced by a chinese guy thats ok but if it was a robot thats bad?

Hum

 

Not what I said. Just pointing out that you're veering from the thread topic. Focus.

Machines are going to mainly replace work that is repetitive and predictive. Machines will at least be more efficient than some workers.

 

So you prefer to discuss machines rather than people?

 

The discussion is about machines replacing people. So we're discussing machines AND people. You seem to be struggling with this. Sorry, but I just won't waste my time with someone who can't keep up. Good day!

 

I disagree...maximizing profits cannot be realized until all other critical factors are in place and sustainable. Profitability is always a great goal but seldom if ever the prime objective. 10-15% of IPO's fail or are withdrawn...lots of risk and other issues long before profits can be realized and sustained.

There are myriad reasons for Sear's failure but my point was just because they are large companies, or public companies, this does not guarantee they are always business smart. Campbell's Soup, Crocs, Harley-Davidson, Kodak, Macy's, Payless Shoes, Quiznos, Subway, Tiffany, K-Mart, SAM's Club, JC Penny, Lowes...and the list goes on and on. A lot of fixing needs to be done before any of these can prioritize profits. Look at GM?

In many cases I might even say that some of these failures were due to too much focus on profits...

 

I did comment on what the dollar is worth...inflation.

Your $200,000 house cost is also four times more house than people need! As a kid in LA our first house was probably 900 square feet so what is the median price today of a 900 square feet home?

If people today consumed the same items as your 1960's Sears worker they can afford to live just fine. However, 'most' people live beyond their means and worse yet do this with debt spending.

The key thing about today is anyone who is unhappy with their situation simply needs to take steps to change their situation...government will never solve any of these problems for people...

 

Reality says that automation cannot simply displace everyone since there would be no consumers to buy the stuff built by automation.

It's not doom and gloom...people simply need to adjust...anything less is just whining...

 

It can

And many liberals are looking forward to the day that robots do the work for them so that they can get paid to paint or write poetry

The loss of jobs to automation, chinese coolies overseas or illegal aliens here in America who just swam the river last week is serious and not easily overcome

 

What actual choice do you have?

If the US wants to sell into the world's other 95% consumers then the US must allow them to also sell into the USA.

The USA cannot simply apply tariffs to every nation in which the US cannot compete because consumers lose.

I'll bet $1000 that if you could talk to any CEO of multi-national companies most will say the ideal scenario would be to have all of their facilities here in the USA. But many times this simply is not practical. For example, if GM had a huge market in Europe then it makes perfect sense to build vehicles in Europe...this is not a labor conspiracy...it just makes sense. Many US companies beg government for more and better workers and when US cannot provide suitable labor then business must go where labor is available. Read about Apple who needs 500,000 to a million workers and 150,000 engineers, etc. to support factories...where are you going to get this in the USA?

Lastly, why don't US companies produce/compete for the millions of imports we buy every day at every major retailer in the USA? US business is capable so why are they building all this crap?

 

GM absolutely IS working to maximize profits. Obviously, they have some work to do, but that does not change the objective. They aren't in business to feed the poor or solve climate change or ensure you have a ride to work. They are in business to maximize profit for theiir shareholders. They may be more or less successful. They may need to go through a low profit period to get back on track. But, the goal is the same.

The same is true for all the other companies you mention.

IPO is just how every for-profit public corporation like those you mention gets started. Obviously, the IPO could fail and/or the resultant company could fail.

 

You are talking over the central point - which is that average earnings back in the 60's was able to buy more than it is today.

 

I continue to disagree; maximize profits has no meaning. Quantified profit goals have meaning. Below is GM's strategic plan...finding sustained profitability, and not maximize profits, is their goal.

GM’s strategic plan includes several major initiatives that the company anticipates will help it achieve 9- to 10-percent margins on an EBIT-adjusted basis by early next decade.

• Lead in Product and Technology: In 2015, about 27 percent of GM’s global sales volume is expected to come from products new or refreshed within 18 months. That figure is expected to rise to 38 percent in 2016 and 2017, and reach 47 percent in 2019.
  During the same time frame, GM plans to execute the world’s largest automotive deployment of 4G LTE high-speed mobile broadband, introduce vehicle-to-vehicle connectivity in the 2017 Cadillac CTS and launch a highly automated driving technology currently called Super Cruise, which allows for extended periods of hands-free driving on highways.
  GM has also developed an innovative Mixed Material Body Structure that uses GM-patented welding technology and a combination of steel and aluminum stampings, castings and extrusions to deliver designs that are lightweight, use 20 percent fewer parts, have class-leading torsional stiffness and exhibit superior noise and vibration characteristics.
• Grow Cadillac: GM is establishing its flagship brand as a separate business unit headquartered in New York City to pursue growth opportunities in the luxury market with more focus and clarity. Cadillac expects to introduce four new vehicles in North America in 2015, including the recently announced CT6. In addition, Cadillac plans to introduce nine new models in the next five years in China, which is expected to become the world’s largest luxury car market later this decade.
• Continue Growing in China: GM’s joint ventures in China are planning to invest $14 billion from 2014 through 2018 to open five new vehicle- manufacturing plants and support sales of just under 5 million vehicles annually. In the same time frame, GM expects to launch 60 new or refreshed vehicles, including nine new sport utility vehicles.
• Continue Growing GM Financial: GM Financial, which has seen its earning assets grow from $8.7 billion in 2010 to $37 billion today, continues to invest to support the sale of new GM cars, trucks and crossovers around the world. GM Financial has sharply increased the number of GM customers it serves in the United States, Canada, South America and Europe. Later this year, GM Financial expects to enter the growing Chinese market.
• Deliver Core Operating Efficiencies: GM’s strategy to improve relationships with suppliers, derive more global volume from fewer vehicle architectures and lower enterprise costs for material and logistics is expected to deliver significantly better variable margins on upcoming high-volume product launches, including the Opel/Vauxhall Corsa and Astra in Europe, and the Chevrolet Cruze and Malibu in North America. By 2020, the company expects that about 99 percent of global production will be on core architectures.