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Friday, May 29, 2015 1:25 AM


Introducing the Zero Labor Factory (90% Free Actually); Robots at Chili's, Applebees, Panera


In the strive for zero labor factories we are nearly there. Is 90% good enough?

China Daily reports Manufacturing Hub Starts Work on First Zero-Labor Factory.

A manufacturing hub in South China's Guangdong province has begun constructing the city's first zero-labor factory, a signal that the local authorities are bringing into effect its "robot assembling line" strategy.

Dongguan-based private company Everwin Precision Technology Ltd is pushing toward putting 1,000 robots in use in its first phase of the zero-labor project, China National Radio reported. It said the company has already put first 100 robots on the assembly line.

"The 'zero-labor factory' does not mean we will not employ any humans, but what it means is that we will scale down the size of workers by up to 90 percent," said Chen Qixing, the company's board chairman.

After the work on smart factory started, Chen predicted that instead of 2,000 workers, the current strength of the workforce, the company will require only 200 to operate software system and backstage management.

"It is necessary to replace human workers with robots, given the severe labor shortage and mounting labor costs," said Di Suoling, head of Dongguan-based Taiwan Business Association.

Manufacturers in the PRD have been hit by a shortage of an estimated 600,000 to 800,000 workers, according to data released after the Spring Festival in February.

Tens of thousands of migrant workers had earlier gone back home to inlands for a family get-together and some of them decided to settle down in their hometown where the living costs are much less than the coastal cities.
Shortage of Labor?

There is no shortage of labor. There is no shortage of skills either. Rather, there is a shortage of people willing to work for what factory owners are willing to pay.

And with cheap money everywhere you look, there is plenty of money at low rates to buy robots.

Meanwhile, back in the US, McDonald's employees think they are worth $15 an hour for taking orders and handing people a sack of crap.

Robots at Chili's, Applebees, Panera

High wages means fewer jobs. CNN accurately reports Robots will Replace Fast-Food Workers.
Panera Bread (PNRA) is the latest chain to introduce automated service, announcing in April that it plans to bring self-service ordering kiosks as well as a mobile ordering option to all its locations within the next three years. The news follows moves from Chili's and Applebee's to place tablets on their tables, allowing diners to order and pay without interacting with human wait staff at all.

In a widely cited paper released last year, University of Oxford researchers estimated that there is a 92% chance that fast-food preparation and serving will be automated in the coming decades.

Delivery drivers could be replaced en masse by self-driving cars, which are likely to hit the market within a decade or two, or even drones. In food preparation, there are start-ups offering robots for bartending and gourmet hamburger preparation. A food processing company in Spain now uses robots to inspect heads of lettuce on a conveyor belt, throwing out those that don't meet company standards, the Oxford researchers report.

Darren Tristano, a food industry expert with the research firm Technomic, said digital technology will "slowly, over time, create efficiency and labor savings" for restaurants. He guessed that work forces would only drop as a result by 5% or 10% at a maximum in the decades to come, however, given the expectations that customers have for the dining experience.

"If you look at the thousands of years that consumers have been served alcohol and food by people, it's hard to imagine that things will change that quickly," he said.
I think Darren Tristano is in fantasyland. The higher the wage, the bigger the incentive to get rid of people.

Central banks have mush for brains in their attempts force wages and prices up in this type of environment.

Question of the Day

How much do you tip a human server server, when the server did not even take your order? The question will eventually be moot when robots bring food to the table.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Thursday, May 28, 2015 2:26 PM


April Greek Capital Flight €5 Billion; Eurozone Liabilities Hit €115 Billion


Chalk up another €5 billion in capital flight from Greece in April. Total eurozone exposure to Greek currency liabilities now sits at €115 Billion, not counting accelerated capital flight in recent weeks.

The following two charts produced with data from EuroCrisis Monitor.

Greece Target2 Imbalance Since February 2008



Greece Target2 Imbalance Detail Since June 2014



The chart shows a rise of €2 billion but that does not count cash.

Target2 Explanation

For a refresher course on Target2, please see Reader From Europe Asks "Can You Please Explain Target2?"

Intra-Eurosystem Liabilities 

The latest Intra-Eurosystem Liabilities from the Bank of Greece are €114.95 billion as shown below.



Change From Last Month

Last month, eurozone exposure to Greek liabilities was €96.427 billion of Target2 imbalances plus another €14.028 billion net liabilities related to the allocation of euro banknotes.

"The past week in May was more challenging compared to the previous ones in the month, with daily outflows of 200 to 300 million euros in the last few days," a senior Greek banker said yesterday.

In the last week alone, it seems likely another €2 billion was pulled from Greek banks. The total May drain will not be reported until June 10.

The ECB is attempting to stem the flow by not upping emergency liquidity assistance (ELA) as noted yesterday in Run on Greek Banks Accelerates; ECB Halts Emergency Funding Hike; Untangling the Lies

Everyone Prepared?
When the ECB and Germany say they are prepared for Grexit, do they include taxpayers who will have to foot the bill for default?

My friend Lars from Norway pinged me with this observation today...

Greek GDP is about €180 billion. Public sector is 60% of the total. That makes the private sector contribution to GDP about €72 billion.

Total public sector debt is close to €500 billion (not €320 billion as quoted by the mainstream media). So a private sector with €72 billion final sales will have to service a debt load of €500 billion.

Isn’t the conclusion obvious?

Regards

Lars
Since June of 2014, Greek banks shed about €70 billion in deposits, an amount roughly equivalent to Greek private GDP.

Not to worry, everything is clearly under control.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

12:11 PM


Swede Has Had Enough


A Swedish man reached the absolute end of what he can take anymore and profanely complains about Swedish politicians. The man is the founder of a new political party called Riksdemokraterna.

Warning: graphic language.



Link if video does not play: Swede Has Had Enough

My comment: Beggar-thy-neighbor policies, deflationary conditions, and the rise of extremist political parties all go hand in hand.

Discontent is spreading in spite of the alleged recovery.

What happens when the next recession hits?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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