Automotive News reports that expansion in the use of robotics and the increased use of battery packs will drive the repatriation of car production to Europe and the US.
The gist of the story is that it will make less sense to have production of vehicles in places such as China (far from the West) when robotics can replace labour, when the parts are costly to ship and when the cost of over-seas labour is rising. The effect will be to make it once more economically sensible to have car production in the US and Europe that might previously have been unprofitable.
Such a development can be judged from a variety of view points. The Chinese won’t like it as they are very keen to have the jobs and the exports. Those employed in new, more automated factories will be happy. And those who see the total amount of labour falling might be unhappy as the question arises who will buy the cars if fewer people are employed globally. For individual firms, there is a relative competitive advantage in reducing labour. You can lower your unit cost and increase profits.
The problem arises when everyone has done this or gone to the wall. And the process can’t be stopped. Once the technology exists to make a thousand widgets with ten people instead of fifty, that technology will become universal. Only growth in the market overall can cause an increase in labour demand so that maybe an eleventh or twelfth body is added to the workforce. Where do the other forty people go in the meantime?
The closure of Rover in the UK was followed by a study of where the labour force went. Most had jobs 18 months later or had retired. Of those who found jobs, the majority had taken a pay cut.
You can understand the pattern of labour loss as something like this (the numbers are for illustration): 10,000 production line workers in Europe, 5000 in China, 1000 back in Europe. Globally, 9000 workers are surplus to requirements.