ABB invests in US robot factory

John Revill

ZURICH (Reuters) – ABB is expanding its main US robot factory as its customers in the automotive, packaging and engineering industries face a tight job market as they bring production home.

The Swiss engineering company, which competes with Japan’s FANUC and Germany’s Kuka, is spending $20 million to increase capacity at its Auburn Hills facility in Michigan to meet demand driven by the Biden administration’s massive industrial stimulus package.

The United States is the third largest in the global robotics market, valued at about $50 billion a year, according to ABB and the International Federation of Robotics (IFR) estimates.

Rapid growth is expected as U.S. companies move production closer to home to avoid logistical bottlenecks that have stalled supply chains in the wake of the global pandemic.

“After the biggest shocks in the industry, including COVID, the semiconductor shortage, and then the war in Ukraine, all enterprises want to become more resilient,” said Sami Atiya, head of robotics and discrete automation at ABB.

“In terms of critical parts of long supply chains, the more products you can bring closer to your home, the more resilient you become,” he told Reuters.

A survey conducted by ABB last year showed that 70% of North American businesses have been affected by supply chain disruptions over the past year.

As a result, 37% of businesses wanted to bring their business back to the United States, while 33% were considering moving closer to the country.

A tight job market and rising wages are making robots more attractive.

“There is a huge shortage of skilled workers in the US,” Atiya said. “With an aging population, that gap is widening.”

He added that robots have become easier to use, making them attractive to small and medium-sized businesses such as bakeries.

IFR expects the number of industrial robots installed annually in America to grow by an average of 8% per year over the next three years, much faster than Europe’s 1%.

China and Japan, the two largest robot markets, are expected to grow by about 8%, according to IFR data.

“The US market is particularly interesting because it is more open to foreign business because it does not have its own domestic brands,” said IFR general secretary Suzanne Biller.

“It’s different from China, where they’re trying to develop their own, and from Japan, which is dominated by its own players.”

The Biden administration’s $430 billion Inflation Reduction Act, which includes key provisions to reduce carbon emissions, increase domestic production and manufacturing, was not a direct factor behind ABB’s investment, the executive said.

However, the law, along with a $52 billion semiconductor manufacturing program, could boost demand.

Companies such as Siemens and Audi have announced major investments in the United States amid Biden’s stimulus, while chip makers such as IBM Corp and Micron have also announced new manufacturing sites.

“The growth potential in the industrial robot market is huge,” Atiya said. “We are seeing double-digit growth in the US market over the next few years and see no reason why this could change.”

(Reporting by John Revill; editing by Alexandra Hudson)

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