BERLIN (Reuters) – Machine parts producer S&D Blech is replacing the retiring head of their grinding unit with a robot due to Germany’s acute labor shortage. This move is becoming increasingly common as the labor squeeze tightens with the exit of Germany’s post-war “baby boom” generation.
In June, official data showed that 1.7 million German jobs were unfilled. The German Chambers of Commerce and Industry (DIHK) estimates that over half of companies are struggling to fill vacancies, which is estimated to cost Europe’s largest economy nearly 100 billion euros ($109 billion) per year in growth.
S&D Blech’s managing director, Henning Schloeder, explained that their push towards automation and digitalization over the years is due to this trend. Schloeder stated, “This will further aggravate the already difficult skilled labor situation, particularly in production and crafts.”
According to Schloeder, finding a replacement for the head of the grinding unit was challenging not only due to his experience but also because the job is physically demanding and unattractive to potential candidates. Machine-grinding involves high heat, continuous noise, and dangerous sparks.
In recent years, the increase in women in the workforce and immigration has helped compensate for demographic changes in Germany. However, as baby boomers retire and new generations with low birth rates enter the labor force, the Federal Employment Agency predicts a shrinkage of 7 million workers by 2035.
The impact of advanced automation technologies, from robotics to AI, will be felt in other developed economies as well. Nela Richardson, chief economist at ADP, a global payrolls and HR services provider, stated, “Long term, all those innovations are a game-changer for the world of work. Everybody will do their job differently.”
Germany is already the world’s fourth-largest market for robots due to heavy investment in automation by car makers and other industrial giants. As robots become cheaper and easier to operate, smaller companies such as S&D Blech, bakeries, laundries, and supermarkets in Germany’s economic backbone of family-run Mittelstand companies are also adopting automation.
Germany saw around 26,000 robot installations last year, making it the largest market in Europe. Ralf Winkelmann, managing director of FANUC Germany, which sells Japanese-made robots to small and medium-sized enterprises, said, “Robots enable the survival of companies that see their future at risk due to staff shortages.”
Companies keen on automation but hesitant to lay off workers are basing their plans on retirement and attrition. Family-run ROLEC, for example, bought its first robot last year to continue production overnight. Automation has become easier with robots no longer requiring programming skills.
Workers and trade unions have started viewing robots more positively, with a survey showing that nearly half of German employees see robots as helping to address labor shortages. Automation can also make work healthier, more interesting, and safer.
Daimler Truck, a lorry and bus manufacturer, extensively uses robotics to assist with physical challenges faced by workers. However, Matthias Krust, head of the company’s works council, emphasized that humans offer more flexibility, especially in complex and differentiated production processes.
Reporting by Maria Martinez; Additional reporting by Victoria Waldersee in Berlin and William Schomberg in London; Editing by Matthias Williams and Catherine Evans
