Only robots can bring factories back to the United States, says Bike Pioneer

While people fear automation will cut jobs, Kamler says overall he will need to hire more workers to take care of the robots he plans to buy.

Courtesy: Kent International Inc.

Courtesy: Kent International Inc.

How to bring manufacturing back to America was a burning question during the presidential election. Arnold Kamler, who has the same goal for his family-owned bicycle business, says both contestants are going the wrong way – talking about tariffs or taxes, when they should ease the way for robots.

Kent Bicycles employs around 150 people at a plant in Manning, South Carolina, which Kamler opened six years ago. The company still does most of its manufacturing in China and Taiwan, and even this partial relocation was a risky business that went against the grain. Kamler would like to go further and quadruple its American production to 1 million bikes per year. But he says he’s not getting the kind of government help he needs.

Photographer: Mark Kauzlarich / Bloomberg

President Donald Trump has tried to boost manufacturing by imposing tariffs on imports from China and other countries. In the election, Trump and his Democratic rival Joe Biden promise to use the tax system to bring factories home – with a mix of incentives for companies that do so and penalties for those that produce elsewhere.

“Everyone on both sides likes to make big tax and tariff announcements – that doesn’t help,” Kamler says. The industrialists of American rivals, from China to South Korea and Japan, receive substantial help from politicians when they seek to modernize factories to make better use of robot technology, he says. “The very first thing the US government should do is help US businesses automate.”

America already has one of the lowest automation rates among the world’s major industrial powers.

The rise of robots

Among the world’s top 10 manufacturers, the United States lags behind in automation

Source: United Nations Statistics Division, International Federation of Robotics

The political arguments revolve around the idea that the manufacturing sector, which employed about a quarter of America’s workforce in the 1950s, up from less than 9% now, may once again become the bedrock of middle-class jobs. It’s part of what Trump meant by “making America great again.” It was also a theme of Biden’s campaign, with the promise to “create millions of new jobs in manufacturing and innovation.”

When the question is framed this way, automation tends to come across – along with globalization – as an enemy of jobs. As you walk through the Kent factory, it’s easy to see why. The factory is home to a mix of manual and automated processes, and switching between them feels like a journey through time.

Side by side

In the main area, dozens of men and women assemble the bikes – each with a specialized job, like looping the chain around the derailleur or threading the brake cables.

A few meters away, in a crisp, all-white room, machines spray the frames with matt powder before sending them to an oven that bakes the color into a glaze. Only one worker at most is needed – to manually spray powder on edges that robots might have missed.

The machines spray the bicycle frames with matt powder. The Kent factory houses a mix of manual and automated processes.

Courtesy: Kent International Inc.

Kent’s expansion plans would see the assembly process play out more that way. Still, Kamler says overall, he’ll need to hire more workers to take care of the robots he’s planning to buy. There will be job offers in other words, and they will probably be better rewarded. The paint line requires a higher skill set and pays up to $ 1.50 an hour more than the assembly line.

Something like that is true nationally, according to the Manufacturing Institute, which represents industry leaders. His research shows that about three-quarters of manufacturers plan to increase their investments in smart factory technology in the coming year. A similar proportion said the biggest impact of automation on the workforce will be to create opportunities for people who know how to use the new machines.

Carolyn Lee, the institute’s executive director, estimates there are already around 400,000 such openings and says manufacturers will need to fill 4.6 million by 2028.

“One of the main benefits of automation is that it replaces repetitive or physically demanding tasks, allowing people to focus on tasks that require human skills and creativity and create even more jobs along the way, ”she said.

Service Jobs

Unions, naturally, see this as a rosy-tinted vision and are more worried about the jobs that will disappear as a result of automation – about 40 million in the United States by 2030, according to a McKinsey study.

Protecting employees from this risk is now part of the negotiation process. In 2018, a landmark deal negotiated by culinary workers in Las Vegas with local hotels required employers to give six months’ notice before introducing machines that could displace workers – and train staff in how to use them.

The episode shows how automation has spread beyond factories and into service industries – where most of the job losses during the pandemic shutdown have been concentrated. This could be worrying for the laid-off workers. Brookings Institute researchers have found that automation often leaps forward during recessions.

Kent Bicycles weathered the crisis without any job cuts – thanks to the renewed interest in cycling among locked-in Americans. This is a relief for Kamler, after a period when the company was hit by tariffs on almost every part it imports. Kent had to crank prices up to 20% and temporarily lay off around 40 employees – one of the reasons Kamler, a Republican, was angered when his factory appeared briefly in a local Trump campaign video. He says he will not vote for the president.

“We’ve gone months shipping a lot of bikes and losing money” because of Trump’s tariffs, he says. Now, however, “the business is insanely good”.

But even with all of this new demand, Kamler says robots are the key to increasing production – because expanding manual production lines to this scale will increase costs and make his bikes uncompetitive. He estimates that customers are willing to pay maybe 10% more for products made in America, but that’s the limit.

“If we are to make bicycles on a large scale, we need a lot more automation,” he says. “We just can’t do it like we did years ago.”

Before it’s here, it’s on the Bloomberg terminal.

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