While the U.S. manufacturing industry has seen a slow recovery since crashing in the spring, manufacturers are still reeling from the global economic turmoil — and looking to 2021 and beyond, many of them are planning to get by with fewer workers and more automation.
Many Texas manufacturers cut their workforce in March and April, and it’s unlikely employment will return to pre-pandemic levels anytime soon. Factory owners are looking to reduce headcount and make sure they can make it through the next major disruption.
Factory floors could see an influx of even more automation as manufacturers try to increase production and reduce expenses.
“The move to advanced shop floor machine technology and high-tech equipment will accelerate as it always does after a dramatic economic shock,” said Duffy Shea, president of Alamo Iron Works.
But manufacturers won’t necessarily be installing massive, one-armed robots on factory floors. Instead, the new technology could include sensors and machine learning to predict and prevent problems on the production line before they occur.
Toyota is on track to complete a $391 million investment into its South Side truck plant by next year. One of the major parts of that investment is new technology that will be able to automatically identify any malfunctions in the line or faulty equipment in vehicles.
“The ability to detect any kind of errors … is another area that is maybe a first ever that we’re putting in,” Kevin Voelkel, president of Toyota Motor Manufacturing Texas, said earlier this month.
The incorporation of more advanced technology probably won’t translate to more manufacturing jobs for humans.
“These changes in operations are driving many manufacturers to reevaluate the role of the workforce,” Deloitte analyst Paul Wellener wrote in a report on the U.S. manufacturing industry. “Some operational job losses during the pandemic could become permanent changes to the labor profile.”
In March and April, the manufacturing industry shed roughly 55,000 jobs in Texas, according to the Federal Reserve Bank of Dallas.
Since then, manufacturers have brought back just 8,300 jobs — and in three of the months from May to November, the industry lost jobs.
San Antonio lost about 4,000 manufacturing jobs in April alone. By comparison, San Antonio manufacturers cut 6,000 jobs throughout the entire Great Recession.
Since May, the industry has added 2,900 jobs in San Antonio, according to the Dallas Fed.
Klaus Weiswurm is chairman of ITM, a Schertz-based company that builds machines for other companies to manufacture their products.
He said his customers have sought to automate more manufacturing processes and “take the human element out of it.”
“The one thing we see from all of our customers is we’re asked two questions. First: ‘How can I increase my production?’ Two: ‘How can I reduce my headcount?’” Weiswurm said. “So what I predict is that you’ll see a lot more robotics come in and quality control be done by machines and machine learning, as opposed to having a quality control inspector or a quality control supervisor.
“Many things we have done over the last four years have been to increase production and reduce headcount,” he said.
Weiswurm and Shea of Alamo Iron Works are skeptical the manufacturing industry will come roaring back in early 2021.
The early months of the year will look a lot like the last six months of 2020 — “uneven, but trending up,” Shea said.
“The second half of 2021 will be strong,” he added.
Despite the headwinds facing the industry, the San Antonio Economic Development Foundation still identifies manufacturing as one of the region’s most prominent industries.
In Seguin, which has become a hub of manufacturing activity, three new factories are slated to start operations in 2021.
CoffeeTech, an instant coffee manufacturer, announced in July it would building a new plant in Seguin, creating 91 jobs. Construction on the facility was pushed back about six months because of the pandemic, but it’s on track to be up and running next year, said Josh Schneuker, executive director of the Seguin Economic Development Corporation.
United Alloy, a metal fabricator, is expected to begin operating in Seguin in January, and the company is currently hiring 40 workers.
Another firm, Continental Structural Plastics, is expected to be running by summer, Schneuker said, and will eventually hire 200 workers.
He said it’s a positive sign the companies maintained their commitments despite the continued economic uncertainty. Schneuker, like Shea, is also eyeing a return to normal economic activity in the second half of 2021.
“There’s a lot of optimism about where things will head once a vaccine is widely available,” Schneuker said. “Once that happens, I anticipate things are going to start to get back to normal, and we’re going to see an increase in consumer spending, and that’s going to lead to more demand for manufacturers.
“Fall to winter 2021 is when I’m really looking the most forward to,” he said.
diego.mendoza-moyers@
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2021 to bring more uncertainty, automation for Texas manufacturers - mySA
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