WEBVTT - Human vs Machine: Robots on the Assembly Line 0:00:00.520 --> 0:00:05.640 When we abandoned the policy of America. First, we started 0:00:05.680 --> 0:00:11.479 rebuilding other countries instead of our own. The skyscrapers went 0:00:11.560 --> 0:00:15.200 up in Beijing and many other cities around the world, 0:00:15.720 --> 0:00:20.840 while the factories and neighborhoods crumbled right here in Detroit. 0:00:25.079 --> 0:00:28.520 In August, Donald Trump, then still accountidate, laid out his 0:00:28.560 --> 0:00:31.800 economic agenda in a major speech. In it, he pledged 0:00:31.800 --> 0:00:35.520 to generate more manufacturing jobs for Americans, and he couldn't 0:00:35.560 --> 0:00:39.800 have chosen a more appropriate location. Detroit, the poster child 0:00:39.840 --> 0:00:47.200 for post industrial decline. It did redounded sense of wanting 0:00:47.240 --> 0:00:51.920 to bring back Detroit. In the audience was a twenty 0:00:51.960 --> 0:00:55.240 six year old Detroit native, A. K. Bennett. We've heard it, 0:00:55.320 --> 0:00:59.160 you know, a few times, you know, from multiple politicians. UM. 0:01:00.040 --> 0:01:04.600 And there still hasn't been that true push to really 0:01:05.360 --> 0:01:10.240 bring things back, um in terms of manufacturing. But as president, 0:01:10.280 --> 0:01:13.080 Donald Trump has made a US manufacturing revival one of 0:01:13.120 --> 0:01:20.880 his biggest priorities in terms of spurring new manufacturing and industry. Um. 0:01:20.920 --> 0:01:25.800 There has not been a lot of outside help, not 0:01:25.920 --> 0:01:28.840 a lot of outside help yet, but there is a 0:01:28.920 --> 0:01:31.679 chance that could be about to change. Just one month 0:01:31.720 --> 0:01:35.199 after Trump's November elections, came the first promise to return 0:01:35.280 --> 0:01:39.080 significant jobs to US shores. We're gonna get things coming. 0:01:39.080 --> 0:01:41.959 We're gonna get Apple to start building their damn computers 0:01:41.959 --> 0:01:44.960 and things in this country instead of in other countries. 0:01:46.520 --> 0:01:49.120 It's not Apple, but a company that works very closely 0:01:49.160 --> 0:01:52.520 with it. Fox Con is a Taiwanese company which makes 0:01:52.520 --> 0:01:55.760 the iPhone for Apple and the Xbox for Microsoft. It 0:01:55.840 --> 0:01:58.520 has promised to invest seven billion dollars in the US 0:01:58.720 --> 0:02:11.040 and generate as many as fifty new jobs in the process. Hi. 0:02:11.120 --> 0:02:13.919 I'm Brad Stone, and I'm Alex Wet and this week 0:02:13.960 --> 0:02:16.520 I'm Decrypted. We'll take a very close look at Fox 0:02:16.600 --> 0:02:19.600 Comp's plan and whether it really will create those good 0:02:19.639 --> 0:02:23.240 American factory jobs that President Trump is calling for. This 0:02:23.360 --> 0:02:25.760 is our third episode in a series looking at the 0:02:25.800 --> 0:02:28.600 impact that automation could have on our jobs. If you 0:02:28.639 --> 0:02:31.480 have a story to share, send it to Decrypted at 0:02:31.480 --> 0:02:35.720 bloomberg dot net. Advances an industrial automation are making it 0:02:35.800 --> 0:02:39.079 cheaper than ever to bring manufacturing jobs back to the US, 0:02:39.639 --> 0:02:42.400 But by its very nature, that's because it would require 0:02:42.520 --> 0:02:45.880 fewer workers on the factory floor. We'll see whether those 0:02:45.960 --> 0:02:48.120 jobs could still give a boost to communities in the 0:02:48.160 --> 0:02:50.560 heartland and we'll find out what's in it for fox 0:02:50.639 --> 0:03:00.239 Con stay with us. So, Alex, were you surpris eyes 0:03:00.280 --> 0:03:02.320 by fox cons announcement that it was going to build 0:03:02.320 --> 0:03:04.680 a factory in the US. Yeah. I've been looking really 0:03:04.720 --> 0:03:07.560 closely at like the costs of making iPhones and any 0:03:07.560 --> 0:03:11.160 other electronic device, and it's the labor costs which make 0:03:11.200 --> 0:03:14.600 a huge difference between China and the US, and that's 0:03:14.600 --> 0:03:16.680 why they do this stuff in in in the cities 0:03:16.720 --> 0:03:20.200 around China. There's so much theater right now around companies 0:03:20.240 --> 0:03:22.440 saying they're going to bring jobs back to the U S. 0:03:22.480 --> 0:03:24.480 How real is this and when when do we think 0:03:24.480 --> 0:03:27.760 we'll see a fox complant in the United States? It 0:03:27.840 --> 0:03:29.840 clearly takes a while to build these things up, but 0:03:30.160 --> 0:03:31.880 it could be, you know, next year that we see 0:03:31.919 --> 0:03:34.519 something that The question is when they bring jobs back 0:03:34.760 --> 0:03:37.040 quite how many jobs will come and what kind of 0:03:37.040 --> 0:03:43.680 a boost does this give to potentially rest belt cities. A. K. 0:03:43.840 --> 0:03:47.760 Bennett comes from a family of auto workers on both 0:03:47.800 --> 0:03:50.960 sides of both my mother and father's side. I would 0:03:50.960 --> 0:03:56.600 say about were employed in the by the Big Three. 0:03:57.400 --> 0:04:00.000 The so called Big three means they work for General motors, 0:04:00.120 --> 0:04:04.400 Ford and Chrysler, you know, through the fifties, sixties, seventies, 0:04:04.400 --> 0:04:09.240 and eighties. But grandparents, uh, two of my four grandparents 0:04:09.240 --> 0:04:13.840 were multiple and uncles, cousins. The post war Haiti I 0:04:13.960 --> 0:04:16.200 motor city, it was kind of like a golden age 0:04:16.240 --> 0:04:20.800 for American manufacturing. There are still some cousins and to 0:04:20.920 --> 0:04:23.320 the day that are working for the auto industry, whether 0:04:23.320 --> 0:04:25.359 it be for a supplier or one of the Big Three. 0:04:25.920 --> 0:04:28.080 But of course it's not just Detroit. The whole Rust 0:04:28.080 --> 0:04:30.440 Belt was booming with industrial activity for much of the 0:04:30.480 --> 0:04:34.440 twentieth century. Ohio typically ranked second only to Indiana in 0:04:34.440 --> 0:04:38.440 the US in steel production. Wisconsin meanwhile, fed that metallurgy 0:04:38.480 --> 0:04:41.560 industry with foundry and metal working equipment, which were a 0:04:41.600 --> 0:04:44.599 staple of its economy. Donald Trump is quick to evoke 0:04:44.640 --> 0:04:49.599 those times when he talks about manufacturing what you have 0:04:49.760 --> 0:04:54.279 in mind, or the jobs from the nineteen seventies of 0:04:54.480 --> 0:04:58.000 people kind of standing on an assembly line, being able 0:04:58.040 --> 0:05:04.799 to go from high school into uh good job that 0:05:05.080 --> 0:05:08.760 enables you to buy a house, in a car and 0:05:09.480 --> 0:05:12.640 have a pretty good life. That's Caroline Freud from the 0:05:12.680 --> 0:05:16.360 Pizson Institute, a DC based economics think tank, and those 0:05:16.440 --> 0:05:21.200 jobs frankly don't exist anymore. There's a few issues of 0:05:21.240 --> 0:05:23.919 play here. One big problem has been the cost of 0:05:23.960 --> 0:05:27.719 full time employment. American workers are more expensive than workers 0:05:27.760 --> 0:05:30.480 in China or other parts of the world. A factory 0:05:30.480 --> 0:05:33.280 worker here can cost close to forty when you take 0:05:33.320 --> 0:05:36.279 into account health, insurance and other costs. He accounts bought 0:05:36.320 --> 0:05:39.120 in China cost just one tenth of that. But cheaper 0:05:39.200 --> 0:05:42.760 still are robots, which offer the tantalizing prospect of a 0:05:42.920 --> 0:05:47.000 US manufacturing resurgence. The snag is that with robots doing 0:05:47.000 --> 0:05:49.400 a lot of the work, they probably won't bring back 0:05:49.400 --> 0:05:51.800 the millions of jobs that Trump is looking for. The 0:05:51.880 --> 0:05:54.920 number of Americans and manufacturing jobs has fallen from a 0:05:55.040 --> 0:05:58.760 ninety nine peak of almost twenty million to about twelve 0:05:58.800 --> 0:06:02.200 point four million today, but industrial output in that time 0:06:02.240 --> 0:06:06.520 has gone up because factories are increasingly automated. That also 0:06:06.560 --> 0:06:09.279 helps explain why labor costs in the US are higher. 0:06:09.800 --> 0:06:14.440 Rather than assembling components manually, these workers operate complex machinery, 0:06:14.520 --> 0:06:16.960 doing work that would otherwise be done by several people. 0:06:17.720 --> 0:06:22.240 If you look at manufacturing, there's a big increase in 0:06:23.080 --> 0:06:27.880 managerial work, or work that requires computer or engineering skills 0:06:28.240 --> 0:06:32.680 and a decline in the production worker because robots can 0:06:32.760 --> 0:06:41.799 do those kind of routine tasks more efficiently. Back in Detroit, 0:06:42.120 --> 0:06:46.000 Ak works as a project manager in the construction industry. Now, 0:06:46.120 --> 0:06:48.599 a K says he's not a Trump supporter, but he 0:06:48.640 --> 0:06:51.800 went to see Trump layout his economic plan, and Detroit 0:06:51.880 --> 0:06:54.400 was also one of the final three locations that fox 0:06:54.480 --> 0:06:57.159 Con is considering for a mega factory in the US. 0:06:57.720 --> 0:07:01.159 Detroit is up against Racine, Wisconsin, and Columbus, Ohio to 0:07:01.200 --> 0:07:03.640 win the plant, according to people familiar with the matter, 0:07:04.480 --> 0:07:06.640 which means A K is in a pretty good place 0:07:06.680 --> 0:07:09.520 of a huge industrial building project comes to his town. 0:07:10.080 --> 0:07:14.920 This would be a massive project. Uh that would you know? 0:07:15.200 --> 0:07:19.640 There's there'd be thousands of trades persons on site. But 0:07:19.840 --> 0:07:22.800 let's break this down. When fox Con talks about creating 0:07:22.840 --> 0:07:25.960 fifty jobs in the US, it doesn't mean the factory 0:07:26.040 --> 0:07:29.760 will have fifty workers. That number also includes the people 0:07:29.800 --> 0:07:31.960 who build the plant and then work in the extended 0:07:32.000 --> 0:07:35.880 supply chain feeding it with components. The plant would be 0:07:35.960 --> 0:07:41.200 huge in terms of construction jobs, design jobs, engineering jobs, 0:07:41.920 --> 0:07:46.480 and then um going forward for an additional logistics and 0:07:46.520 --> 0:07:50.040 other suppliers. Potentially, my understanding is from talking to sources 0:07:50.120 --> 0:07:52.760 that the factory could employ close to ten thousand people 0:07:52.800 --> 0:07:55.560 in the long term, and that fox could build other 0:07:55.560 --> 0:07:58.920 satellite plants elsewhere in the US and alex What will 0:07:58.960 --> 0:08:00.880 they be making there. The idea would be that this 0:08:00.960 --> 0:08:03.760 main plant would make large l c D display panels 0:08:03.840 --> 0:08:06.520 which would then be shipped to these other factories to 0:08:06.560 --> 0:08:10.400 make things like computer and TV screens, And these are 0:08:10.400 --> 0:08:13.520 the factories that Foxconn is thinking about building, So not 0:08:13.680 --> 0:08:16.760 the famous iPhone, right. It still requires a lot of 0:08:16.800 --> 0:08:19.600 manual labor to put an iPhone together, so the iPhone 0:08:19.680 --> 0:08:22.280 isn't the ideal project to build in a highly automated 0:08:22.320 --> 0:08:24.960 factory in the U S. L c D screens have 0:08:25.000 --> 0:08:28.200 been built by robots for years, so what specifically is 0:08:28.240 --> 0:08:30.920 holding back the iPhone from being produced or at least 0:08:30.960 --> 0:08:33.400 assembled in the US. So a lot of the components 0:08:33.559 --> 0:08:36.120 which go into an iPhone can be built by robots, 0:08:36.160 --> 0:08:38.880 but actually that final process of sticking all these bits 0:08:38.920 --> 0:08:42.880 together can require some really fiddly screws to piece it 0:08:42.880 --> 0:08:45.240 all together, and that's not something that's very easy for 0:08:45.320 --> 0:08:48.800 robots to do, right. Those fiddly screws are difficult for 0:08:48.920 --> 0:08:51.960 robots and tasks like printing silicon chips that's far better 0:08:52.000 --> 0:08:54.520 suited for automation, which is why there is still so 0:08:54.600 --> 0:08:58.360 much semiconductor manufacturing in the US right. Intel is building plans, 0:08:58.400 --> 0:09:05.680 particularly in Arizona, to processors. Well, there's a somewhat morbid 0:09:05.760 --> 0:09:07.560 joke that the fact of the future will just to 0:09:07.600 --> 0:09:12.599 have two employees, a human and a dog. That's Eric Brynjolfson. 0:09:12.880 --> 0:09:15.120 He's a professor the m I. T. Sloan School of 0:09:15.120 --> 0:09:18.760 Management and the co author of the influential book The 0:09:18.800 --> 0:09:22.320 Second Machine Age, Work, Progress and Prosperity In a time 0:09:22.320 --> 0:09:26.160 of brilliant technologies, the humans job will be to feed 0:09:26.200 --> 0:09:28.160 the dog, and the dog's job will be to keep 0:09:28.160 --> 0:09:30.880 the human from touching any of the equipment. Although I 0:09:30.880 --> 0:09:33.320 should say we're probably not at the dog and human 0:09:33.360 --> 0:09:36.760 stage yet. But one thing Eric did emphasize to me 0:09:36.880 --> 0:09:39.120 is that for all the rhetoric we hear from politicians 0:09:39.160 --> 0:09:42.280 about how manufacturing will bring back jobs for companies like 0:09:42.320 --> 0:09:45.319 Fox Com, this really isn't about jobs at all. You know, 0:09:45.360 --> 0:09:47.400 if you walk around a lot of American factories that 0:09:47.480 --> 0:09:50.400 virtually lights out with very few humans, and the few 0:09:50.480 --> 0:09:53.400 humans who are there, you know they're paid pretty good wages, 0:09:53.840 --> 0:09:56.600 but it's not the thousands or millions of jobs we 0:09:56.720 --> 0:09:59.680 used to have in that kind of work. It's really 0:09:59.720 --> 0:10:02.840 the to establish good relations with the Trump administration that 0:10:02.880 --> 0:10:05.960 it's driving fox Kin here and automation is what's making 0:10:05.960 --> 0:10:08.640 it possible. Will dig into that some more later in 0:10:08.679 --> 0:10:17.360 the show. Companies usually employ consultants who help them find 0:10:17.400 --> 0:10:22.000 potential sites for new factories. It always starts with sitting 0:10:22.000 --> 0:10:25.440 down with them and defining what exactly they need to 0:10:25.520 --> 0:10:29.280 be successful. I chatted with Darren Budau. He's based in 0:10:29.360 --> 0:10:33.800 Chicago and leads Deloitte site selection practice. We call those 0:10:33.800 --> 0:10:37.040 critical location factors. We really want to understand what makes 0:10:37.080 --> 0:10:41.319 them tick and what makes this new deployment of their's successful. 0:10:42.120 --> 0:10:45.920 It's a process of elimination. We will be reviewing potential sites, 0:10:46.000 --> 0:10:50.560 actual actual properties, whether they're existing buildings or land sites 0:10:50.960 --> 0:10:54.120 that have what the client needs. The consultants have a 0:10:54.160 --> 0:10:57.800 list of criteria, things like labor costs, transport links, proximity 0:10:57.840 --> 0:11:02.040 to key suppliers and customers. From there, there's always a 0:11:02.120 --> 0:11:07.360 due diligence process of conducting additional analysis and study on 0:11:07.480 --> 0:11:11.240 the labor market. On the the technical aspects of the 0:11:11.280 --> 0:11:14.880 site itself from a from a utilities and infrastructure perspective, 0:11:15.280 --> 0:11:24.600 we want to identify any possible risks before negotiations. With 0:11:24.679 --> 0:11:27.480 their shortlist of sites ready, the company then approaches the 0:11:27.520 --> 0:11:30.600 local government authorities to see what sweeten is they can offer. 0:11:31.440 --> 0:11:35.120 Those can come in three main forms. Tax incentives and rebates, 0:11:35.360 --> 0:11:39.959 infrastructure improvements like new bus and subway stations, and labor incentives, 0:11:40.160 --> 0:11:44.920 usually education programs to train staff. Incentive packages can sometimes 0:11:44.920 --> 0:11:48.160 stretch into the hundreds and millions of dollars. Fox Con 0:11:48.280 --> 0:11:50.839 is being advised by e Y, the consultant we probably 0:11:50.840 --> 0:11:52.880 know as Ernst and Young, which is helping it get 0:11:52.920 --> 0:11:55.600 the best possible deal. We said earlier in the show. 0:11:56.000 --> 0:11:58.120 Our sources tell us that e Y has whittled the 0:11:58.120 --> 0:12:01.000 shortlist down to Detroit, New Michigan, We're seeing in Wisconsin 0:12:01.160 --> 0:12:04.840 and Columbus in Ohio. But there's still one nagging question, Alex, 0:12:05.200 --> 0:12:15.240 what is in it for fox Com? Hi? Everyone? Every week, 0:12:15.440 --> 0:12:19.760 our team here at Bloomberg Technology spends so much work 0:12:20.200 --> 0:12:23.960 making sure that this show is great, and we have 0:12:24.040 --> 0:12:27.160 a special request to ask of you. If you like 0:12:27.240 --> 0:12:30.280 the show, um, please help us get the word out 0:12:30.559 --> 0:12:32.800 so more people can find us. Maybe you have a 0:12:32.840 --> 0:12:35.920 friend who likes technology a lot who's never listened to 0:12:35.920 --> 0:12:40.040 a podcast before, or if you listen on Apple podcasts, 0:12:40.160 --> 0:12:43.320 you can leave us a rating and a review. To 0:12:43.400 --> 0:12:46.080 do that, just search for Decrypted then hit write a 0:12:46.120 --> 0:12:49.880 review inside the reviews tab. Thanks so much for supporting 0:12:49.880 --> 0:12:57.680 our show. We spend ages puzzling out of this all. 0:12:57.760 --> 0:13:00.280 I will take your word for that. Seriously. I spoke 0:13:00.320 --> 0:13:02.760 to like tons of people over the course of several 0:13:02.800 --> 0:13:05.800 weeks trying to work out what exactly is the business 0:13:05.800 --> 0:13:09.800 appeal of Wisconsin or Michigan in particular. They don't check 0:13:09.840 --> 0:13:13.120 obvious boxes like having really good transport links which could 0:13:13.360 --> 0:13:16.000 allow equipment to be shipped to Asia for final assembly, 0:13:16.200 --> 0:13:18.959 or even proximity to customers. Well what about proximity to 0:13:19.000 --> 0:13:22.080 car makers? I mean, all these automobile manufacturers now need 0:13:22.200 --> 0:13:25.000 new technology, and the suppliers like Fox kind of help 0:13:25.080 --> 0:13:28.400 them put screens and digital technologies into their cars. Yeah. 0:13:28.400 --> 0:13:31.000 I did think about that, because autonomous cars will give 0:13:31.080 --> 0:13:33.679 drivers more time to serve the web and watch films 0:13:33.720 --> 0:13:35.320 because they don't have to pay as much attention to 0:13:35.360 --> 0:13:37.440 the road. But if that were the case, they wanted 0:13:37.440 --> 0:13:39.920 to be near those customers. The South would probably make 0:13:40.000 --> 0:13:42.520 more sense. There are more luxury car makers there who 0:13:42.520 --> 0:13:44.320 are going to be perhaps the first to have the 0:13:44.320 --> 0:13:47.280 autonomous cars, and the labor costs they are lower. Well, 0:13:47.400 --> 0:13:50.480 lots of declining industry in the Midwest. Is there something 0:13:50.520 --> 0:13:52.520 to the to the kind of labor base and the 0:13:52.559 --> 0:13:56.040 availability of possible workers in you know, former steel factories, 0:13:56.080 --> 0:13:59.199 former chemical factories that makes us appealing to fox Camp. Well, actually, 0:13:59.200 --> 0:14:02.160 the chemical factory idea we thought might be that you 0:14:02.200 --> 0:14:04.559 need chemicals to make l C D and so proximity 0:14:04.600 --> 0:14:07.440 to those guys would help. And of course Detroit has 0:14:07.720 --> 0:14:10.839 a legacy workforce from the automotive industry, but it's still 0:14:10.920 --> 0:14:13.040 a very different kind of skill set you need to 0:14:13.120 --> 0:14:17.559 run an electronics factory. From all my conversations, it increasingly 0:14:17.600 --> 0:14:21.440 seemed like there could be another motivation at play. If 0:14:21.440 --> 0:14:25.760 you look at the hun plan and there's a plant 0:14:25.880 --> 0:14:29.600 in the states that they're considering, Um, it didn't surprise 0:14:29.680 --> 0:14:32.400 me that so many of them happened to be swing states. 0:14:33.480 --> 0:14:36.320 That's Caroline the economist we heard from earlier. That's a 0:14:36.320 --> 0:14:38.960 good point. In Wisconsin. Trump won with a marchin of 0:14:39.000 --> 0:14:42.120 twenty three thou votes and had just eleven thousand more 0:14:42.200 --> 0:14:45.120 votes in Hillary Clinton in the state of Michigan. In Ohio, 0:14:45.240 --> 0:14:47.920 my home state, Trump had a more substantial victory, but 0:14:48.000 --> 0:14:58.000 it has long been considered a swing state. The sheer 0:14:58.080 --> 0:15:02.320 dollars are significant, I think for any state. David Welch 0:15:02.360 --> 0:15:05.040 is the Bloomberg Bureau chief in Detroit. He's been keeping 0:15:05.080 --> 0:15:07.240 his air close to the ground as FOTS gone whittles 0:15:07.280 --> 0:15:10.600 down its shortness. I asked him how significant an investment 0:15:10.640 --> 0:15:12.640 the plant would be for the region. But this would 0:15:12.640 --> 0:15:16.600 really tower, and it's important for for southeastern Michigan because 0:15:17.600 --> 0:15:20.080 the state has been trying to wean itself off of 0:15:21.040 --> 0:15:23.720 its master reliance on the auto industry for a long time, 0:15:23.800 --> 0:15:26.720 with with not a lot of success. The two other 0:15:26.760 --> 0:15:28.960 sites in the running have a similar story to tell. 0:15:29.360 --> 0:15:33.040 In Racine, politicians have worked hard to reduce unemployment from 0:15:33.040 --> 0:15:36.040 a two thousand ten peak of eighteen by bringing in 0:15:36.120 --> 0:15:39.960 new investment. It now stands at about five. Columbus is 0:15:40.000 --> 0:15:42.440 perhaps the town that needs the investment the least, but 0:15:42.520 --> 0:15:44.800 that also means it already has a strong labor force, 0:15:44.800 --> 0:15:48.600 which would suit Foxcount's needs. Any governor trying to attract 0:15:48.640 --> 0:15:51.960 a new manufacturing project has to negotiate a delicate balance 0:15:51.960 --> 0:15:54.760 between trying to attract projects that will create jobs but 0:15:54.800 --> 0:15:57.520 without appearing to plan it a big business. Here's what 0:15:57.600 --> 0:16:01.600 David said about Michigan's Republican governor Rix Nida Governor Snider 0:16:01.680 --> 0:16:04.080 has not been a big fan of just handing money 0:16:04.280 --> 0:16:08.480 to companies. He's been more interested in building infrastructure, giving 0:16:08.520 --> 0:16:13.080 training grants and and and sort of facilitating um as 0:16:13.080 --> 0:16:16.120 opposed to throwing money at people. Are companies? And what 0:16:16.160 --> 0:16:19.560 about the political calculation? Alex Trump wont all three states 0:16:19.560 --> 0:16:21.960 in the last election, but the wins in Michigan and 0:16:21.960 --> 0:16:25.440 Wisconsin were both unexpected and critical. If it really is 0:16:25.480 --> 0:16:28.520 a political calculation, Michigan and Wisconsin have got to be 0:16:28.560 --> 0:16:31.600 favorites because they had had such a narrow margin of 0:16:31.640 --> 0:16:34.840 victory for the Republicans last time around. But whichever state 0:16:34.920 --> 0:16:37.680 eventually wins the Megaplan, Trump will likely be able to 0:16:37.680 --> 0:16:40.720 stay credit for it. And Trump is going to be telling, 0:16:41.040 --> 0:16:43.160 you know, in a couple of years, he's gonna be 0:16:43.240 --> 0:16:45.240 telling the people in this area, hey, look, you know 0:16:45.240 --> 0:16:47.840 I got you some particularly it's Michigan, I got you 0:16:47.880 --> 0:16:50.640 a huge plant that's that's not automotive. I brought you 0:16:50.760 --> 0:16:54.320 something else, and we're talking about a few thousand workers, 0:16:54.320 --> 0:17:04.160 So it's it's it's a pretty big deal, no question. Okay. 0:17:04.560 --> 0:17:07.000 So even if fox CON's megaplant is going to be 0:17:07.160 --> 0:17:09.960 very highly automated, it's still going to create an investment 0:17:09.960 --> 0:17:12.359 to give a boost to a city like Detroit. So 0:17:12.440 --> 0:17:14.960 there's a clear advantage to Trump and building a plant here. 0:17:15.200 --> 0:17:17.840 But what's in it for fox Con? The short on 0:17:17.920 --> 0:17:20.160 SWA is that having a factory in the US could 0:17:20.160 --> 0:17:22.240 make life easier for false Cone when it tries to 0:17:22.320 --> 0:17:25.040 import iPhones made in China. Okay, so I think I 0:17:25.080 --> 0:17:27.880 get it. If fox Kind builds a plant or even 0:17:27.920 --> 0:17:31.639 several plants, employing thousands of workers in the US, it 0:17:31.680 --> 0:17:35.040 could convince Trump not to slap import duties on iPhones 0:17:35.040 --> 0:17:38.040 made in China and ship to the States, exactly because 0:17:38.119 --> 0:17:41.200 fos Cone could fairly say it's already bringing jobs here 0:17:41.960 --> 0:17:44.560 and bringing iPhone manufacturing to the U. S would be 0:17:44.560 --> 0:17:48.200 a far more involved prospect, Yes, because replicating the rich 0:17:48.240 --> 0:17:51.840 ecosystem of supplies that exist around these main manufacturing hubs 0:17:51.880 --> 0:17:54.800 in China would be incredibly complicated, right, And as we 0:17:54.920 --> 0:17:58.560 discussed earlier. iPhone production is just much harder to automate 0:17:58.600 --> 0:18:00.920 than making displays. In a sense, you could say that 0:18:01.200 --> 0:18:04.200 Scone is buying a stay of execution for its Chinese 0:18:04.200 --> 0:18:07.159 iPhone making business. Okay, So, in the sense we're seeing 0:18:07.200 --> 0:18:11.000 three tiers of manufacturing. You have basic repetitive tasks which 0:18:11.000 --> 0:18:13.879 can be done by robots, more complex tasks which are 0:18:13.960 --> 0:18:16.359 present need a lot of manpower, and a high level 0:18:16.400 --> 0:18:19.720 automation which will requires small numbers of staff and their 0:18:19.760 --> 0:18:23.600 dogs who might even need engineering degrees. Deloitte has one 0:18:23.640 --> 0:18:26.480 foecust showing the US could be more competitive than China 0:18:26.600 --> 0:18:29.360 as soon as because of this. And while it's not 0:18:29.440 --> 0:18:31.440 yet clear who will win the race when it comes 0:18:31.440 --> 0:18:35.560 to attracting high tech manufacturing projects, the bleak reality facing 0:18:35.600 --> 0:18:39.760 many American workers is the possibility that large scale manufacturing 0:18:40.080 --> 0:18:46.439 is unlikely ever to return douled automation. You know, you 0:18:46.480 --> 0:18:49.080 may have a job for five years, but then five 0:18:49.160 --> 0:19:01.719 years a job could be gone to a robot. And 0:19:01.800 --> 0:19:05.199 that's it for this week's Decrypted. Thanks for listening. We 0:19:05.280 --> 0:19:06.920 always like to hear what you think of the show. 0:19:07.160 --> 0:19:09.399 Record a voice message and send it to Decrypted at 0:19:09.400 --> 0:19:12.560 Bloomberg dot net or I'm on Twitter at a TB 0:19:12.760 --> 0:19:16.240 web and I'm at brad Stone. If you haven't already, 0:19:16.480 --> 0:19:19.240 please subscribe to our show wherever you get your podcast. 0:19:19.600 --> 0:19:22.080 While you're there, please leave us at reading and a review. 0:19:22.320 --> 0:19:25.840 It really helps more listeners find the show. This episode 0:19:25.880 --> 0:19:29.160 was produced by Pierre Gadkari, Liz Smith, and Magnus Hendrickson. 0:19:29.600 --> 0:19:32.359 Thanks to Isabel Gottlieb for her help on today's show, 0:19:32.560 --> 0:19:35.000 as well as David Welch and Detroit and John McCormick 0:19:35.040 --> 0:19:37.600 in Chicago for their tireless hounding of the story. In 0:19:37.640 --> 0:19:41.760 Michigan and Wisconsin. Aliceabar edited my print story about box 0:19:41.800 --> 0:19:44.560 cons Megaplant, which you can read at Bloomberg dot com, 0:19:44.640 --> 0:19:48.080 Forward slash Tech. Alec McCabe is head of Bloomberg Podcasts. 0:19:48.320 --> 0:19:49.240 We'll see you next week.