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Recent key developments in MAKE│NZ
The results are in from our Wage Survey that we ran over the last two weeks. While we still didn’t get a huge response, we did get an increase after mentioning it again last week, so thank you to those who contributed. Below is the average hourly wage from those who replied:
| Our question | Average wage rate ($ per hr) |
| What’s your current wage rate for your Production Lead | 44.03 |
| What’s your current wage rate for your Shift Supervisor | 38.53 |
| What’s your current wage rate for your Assembly Staff | 30.83 |
| What’s your current wage rate for your Forklift Operators | 28.28 |
| What’s your current wage rate for your Fabrication Lead | 42.9 |
| What’s your current wage rate for your Fabrication Staff | 35 |
As you may have hear over the last few weeks, we had a Production Managers meeting last week at the University of Canterbury. The meeting was a great opportunity for those who attended to get a look at what students (and potential new staff) get up to. Students spoke on behalf of eight different clubs; The Aerospace Club, UCHP, UCM, UC Robotics, UC Biomed, UC Flight, Tron Soc, and MEC soc. After each presentation we had some back and forth questions between those presenting and everyone else in attendance, it seemed these clubs aren’t often all represented in the same room so there was lots of questions from the students as well as the manufacturers.
To round out the afternoon we took the time to have an open question time for the students to ask what employers in the manufacturing field are looking for, and what they can do to be more appealing applicants.
A key take away was the importance of hands-on experience. Having spent some time hands on with a CNC machine or a lathe was considered comparable and perhaps even more important than a students GPA. So then, we pass the question on to you-
On our quest to promote events that might be of interest to our community, we’ve found out about a current event being put on by OMRON-
We’ve not had any involvement in this but it may be of interest to some of you, so feel free to pay them a visit!
Recent key developments in New Zealand
•It’s always a worry when people who are presented in major media as subject matter experts reveal a lack of understanding of the subject matter they are talking about. It’s a particular worry when the subject matter is important to businesses, including manufacturing – like the introduction of four-day working weeks.
On RNZ Morning Report this morning, Dr Dougal Sutherland of Umbrella Wellbeing Ltd. made the case for the 4-day working week – 32 hours that is, not “trying to shoehorn 40 hours into four days”. Beyond the benefits of improved worker health and wellbeing, Dr Southerland also claimed that “many of the studies in this area show that productivity remains the same, and in some cases even increases, when you drop down to 32 hours per week. So, it’s good for workers, but it’s also good for businesses. … [and] this says that if we reduce working hours, we get more out of people.” There appears to be some slight confusion in the terminology here. The UK Office for National Statistics defines ‘Labour Productivity’ as “the measure of how much output is produced per unit of labour input, for instance, per worker.” At constant productivity, reducing the number of hours worked per week by 20% will mean reducing output by 20% – not sure how many businesses will regard that as a benefit. Conversely, to maintain output at 100% while reducing the labour input by 20% would require productivity improvements of 20%. There is no doubt that four-day working weeks may well improve productivity, but unless the number of hours worked remains at previous levels, meaning 10-hour days, output will decline and unlikely to be fully compensated for by improved productivity. The arithmetic is fairly simple here, one would have thought …
•Among employees in Australia and New Zealand, there is evidence of increased levels of perceived uncertainty. A lot of that perception appears to be tied to fears around job security, combined with a perception of personal economic conditions deteriorating.
For New Zealand, the data from June’s Westpac-McDermott Miller Employment Confidence Index paint the picture:
However, the uptick in the most recent quarter is due to public sector employees’ confidence having increased 7 points up to 96.2. Confidence amongst employees working in the private sector has further eroded this quarter with a drop of 2.9 points down to 85.0.
As an aside, a fear of losing one’s job, and of a deteriorating financial situation, is likely to contribute to rising workplace stress levels that employers have to deal with under the Health and Safety at Work Act 2015, even when, arguably, these factors will be outside of the control of employers in most cases.
One of the factors contributing the rising job insecurity is the fear of “AI will take my job”. On that, and focusing mostly on what the experience has been so far, the reality is – apart from some confirmed job cuts in the tech industry, there is little evidence yet of significant layoffs due to AI-associated automation. Which is not surprising on several levels. First, redundancies aren’t often just due to one factor. Companies in decline may lay off workers and increase automation to reduce their total cost of labour. Second, as it inevitably happens, when a certain technology is en vogue (‘hot’), there will be a strong temptation to use the label where it doesn’t really fit. That includes mass layoffs, where the adoption of “AI” (which may well be just ‘automation’) may be seen as more acceptable socially and politically than other explanations.
Back to the hard numbers: On July 2, Reuters reported that Microsoft announced plans to lay off 9,000 employees as the tech giant looks to rein in costs amid hefty investments in artificial intelligence infrastructure. Does that count as “AI replacing humans”? The same Reuters article also mentioned significant job cuts by Alphabet, Amazon and Meta. In each case it wasn’t entirely clear to what extent this was “AI replacing humans”. Moving on to predictions, then. There is a reasonable agreement in the assessment of what industries and associated job types are likely to be affected most by the introduction of AI, with this graph illustrating it well:
In terms of age groups and experience, the jury is still out, but the net balance of predictions considers younger / entry-level workers to be at a higher risk. There can be little doubt that this will vary quite a bit between different job types and industries.
When it comes to future automation and the use of AI in manufacturing SMEs, a recent review paper identifies the usual suspects standing in the way of more widespread adoption: “organizational rigidity to change, insufficient financial resources and insufficient skilled personnel, among others.”
And a recent report by McKinsey and Co on the potential of embodied AI creating robotic coworkers again cites cost, speed of introduction and the skills required to implement the technology successfully as major stumbling blocks at this stage, but lists potential (future) applications, including in manufacturing:
Recent key developments in the World
•The Russian Federation was -and still is – a significant exporter of energy. In 2024, Russian exports accounted for 11% of the global trade in crude oil, making it the second-biggest exporter by value, 17% of natural gas, and 7% of LNG. In addition, the Russian Company Rossatom is the biggest supplier globally of enriched uranium for nuclear power stations. The US President, and the NATO General Secretary, have now threatened to impose a 100% tariff on goods exported to the United States from countries that still by goods from the Russian Federation, especially crude oil and natural gas, by early September. Imagine how a cut-off, or even a partial restriction, of those exports would impact global energy markets in terms of energy prices and logistics. This Reuters article provides some useful insights on the matter.
•As promised, we’ll sprinkle some good news in among the many things that (may) give us reason to worry. The wider world of AI is seeing a growing number of start-up companies springing into life, and some of them even relevant to manufacturing. One of these is MANIX AI, a Munich-based company with a sole focus on building manufacturing optimisation agents that enable autonomous factories. And it’s not only the company that is quite young; it started in September 2023:
Two of them are ex-BMW, all with a computer science / engineering education
MANIX AI’s sole product (so far) is a set of AI-powered manufacturing optimisation agents designed to integrate end-to-end data capture for manufacturing operations, AI training and deployment, and AI-based monitoring. They’ve managed to attract about USD17m of investment to date and built to an impressive list of manufacturing clients, including major car companies like Audi, BMW and Stellantis. Their specific product may well not be a good fit for (most) New Zealand manufacturers at this stage, but the concept is where we all need to go: end-to-end data capture and delivery of real-time information that can then be used by machine-learning tools to optimise operations. And isn’t it just good to see bright young people applying their skills to improve productivity in manufacturing?
•The movement pushing for a re-industrialisation of the US is gathering momentum, or at least the conversation about it. Last week saw the completion of a two-day conference Reindustrialize 2025 (https://www.reindustrialize.com ) under the credo of “Combining cutting-edge technology with manufacturing is crucial to revitalize and scale the American industrial base, ensuring long-term economic growth and global competitiveness in the modern era.” About 1,200 people attended the two-day conference, double the number from when the conference was held for the first time last year, with thousands more on a waiting list.
One of the speakers at the conference was John Phelan, the US Navy secretary. He spoke bluntly about the dire state of affairs and proposed combining commercial and military shipbuilding abilities to address the shortfall of shipbuilders. “Our shipbuilding industry has eroded, hollowing out the very capacity we need to maintain credible naval deterrence,” he said.
That “dire strait of affairs” is analysed very competently in the latest edition of What’s Going on With Shipping, which includes this quote from Sal Mercogliano when he talks about the problems the US navy has with getting its ships repaired: “Not the least of which, too, is that they depend on small contractors and small manufacturers for a lot of replacement parts, and that creates a supply chain bottleneck.” We’ve earlier mentioned US plans to dramatically increase their own ship-building capability and capacity (military and civilian) – and the realisation that this is unlikely to happen within a few years.
Most people outside of manufacturing, including the vast majority of our political leaders and the officials providing them with advice, have got no idea about the intricate web of supply chain relationships involved in manufacturing even moderately complex pieces of machinery and equipment. Not only that. Under ‘normal’ conditions, that web of supply chain relationships cannot be created overnight. Its formation involves a process of ‘organic growth’, involving, among others, the formation trust in business relationships.
What if conditions are not ‘normal’? The recent example of the growth of the drone industry in the Ukraine shows that under pressure manufacturing capability and capacity can by scaled up at great speed. This is not the place for a detailed analysis, but a good summary can be found here.
Here are the numbers for Ukraine’s drone industry. n.b. all this information comes from Ukrainian sources:
| Year | Companies | Approved Models | Monthly Capacity | Investment (US$B) |
| 2022 | 7 | 7 | 20,000 | 0.11 |
| 2023 | 40 | ~40[estimate] | 50,000 | 1.0 |
| 2024 | 200 | 67 | 150,000 | 2.5 |
| 2025 | 500 | ~100[estimate] | 200,000 | 2.7 |
As this graph shows, most of the components involved are manufactured within the country
Ukraine is a large country by area, but even before 2014, when the war started, at 45 million inhabitants it wasn’t a populous country by international standards. Estimates of its total civilian labour force come up with a drop from 20.5m to 15.4m today.
Keep in mind that in wartime, government can intervene and direct manufacturers’ activities to a much greater extent than in peacetime. Also keep in mind that supply chains to build small drones will be several orders of magnitude simpler than those for US military vessels.
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