This Shanghai Factory Plans to Replace All of Its Human Workers

Machines thrum. Conveyors move components. A dog-size, self-driving cart hauls materials along a taped-off path. Here and there, a few people press buttons, turn wrenches, operate handheld scanners, and fold boxes.

If the Cambridge Industries Group factory in Shanghai, China seems a little empty, it's on purpose. With robots handling two thirds of the labor, the facility is one of the most automated—thus, worker-free—in the global electronics industry.

This factory's on track to become 90 percent automated in coming years. As soon as the technology is available, it will be 100 percent automated, with machines totally replacing human beings.

CIG's Shanghai plant offers a preview of a future many government officials and everyday people fear—and which economists warn is increasingly likely as industrial robots rapidly get better and cheaper. A jobless future; one that could spark popular revolt against the leaders who let it happen.

Gerald Wong founded CIG in 2005. Today the company has facilities in Shanghai, Hong Kong, and Delaware. It makes small electronics: routers, modems, and smart-home boxes, for a wide range of brands. On its website, the privately held company boasts of its "competitive advantages in technologies, leadership, and innovation."

These advantages, in other words, are robots. Starting in 2014, Wong pushed hard to automate CIG's production processes. The firm purchased foreign-made robots, especially American models. The first generation was obsolete within six months, Wong told Motherboard during a March 2 visit to the Shanghai plant. The visit was sponsored by the China-U.S. Exchange Foundation, a Hong Kong-based nonprofit.

CIG is now on the third generation of automation and working on the fourth. CIG's goal with the fourth generation is to automate 90 percent of its labor.

CIG has reorganized to become robot-centric. The job of the human staff is to code and maintain the bots. "We're not a typical company," Wong said. "We program the robots in-house." It's probably safe to say that the workers who take care of CIG's robots are the only people at the company outside of senior management who can rest assured they'll still have a job in 10 years.

The factory floor at the 86,000-square foot Shanghai plant is a technological marvel, a blend of robot and human labor that on March 1 alone assembled 49,062 routers and other products, according to company statistics.

The plant hums practically around the clock. There are two 10-hour shifts, each with a one-hour break. Robots do almost all of the repetitive, high-precision work. A swiveling robotic arm places chips into sockets for programming. A machine prints the circuit boards, and another machine heats the boards. Computer-steered drills, saws, and manipulators shape and separate the boards and place components on them. Robotic arms pluck parts and finished products from conveyors and conduct much of the testing before returning them to the conveyors.

Seven hundred people work here, each earning around $7,000 a year. But touring the plant, you rarely see more than a few of them at a time. They feed tangles of materials into the printers and scoop parts from the robotic haulers that wheel along pathways between the big machines. They work handheld scanners in the testing bays.

A few repairmen prowl the automated assembly lines with tools. But mostly, the human workers pack the products, folding boxes and stuffing finished routers, cables, and adapters into the boxes then slapping labels on them.

At one of the boxing stations, there's an ominous presence. A maroon-colored, six-axis robotic arm, around four feet long from base to claw. A product of the Massachusetts Institute of Technology's Rethink Robotics lab that's currently in testing at CIG, the new six-axis arm makes the bot more precise and flexible than older robots, and could soon replace the human boxing crew.

Worse for CIG's workforce, the robot doesn't require coding. To teach it a new task, you simply grab it and guide it through the motions you want it to replicate. This bot can ape the dexterity of human shoulders, elbows, wrists and fingers, and could be the one that gets CIG to 90 percent automation and beyond.

The last few workers—the ones who will teach and repair the six-axis bots—could be the hardest to replace. Total automation is the "end target," Rose Hu, CIG's senior vice president for marketing, told Motherboard, but, she added, "it's a process."

Wong isn't shy about the way automation benefits him. Buying and operating a typical robot at CIG ends up costing as much as three people's wages, Wong said. Still, he insisted that his company has a sense of social responsibility, although it's not clear how he defines the term.

How many people can a single robot replace? Cao Qinghoa, who oversees production at the Shanghai plant, said he's not sure—but it's a lot. Before automation, he said, electronics plants in China were unimaginably crowded.

As the Chinese economy expands, wages have also risen. In Shanghai, labor costs have swelled 150 percent since 2009, Wong said, and the local minimum wage has grown by 110 percent. As a result of rising education and expectations, he said, "not enough people want to do blue-collar work anymore."

Wong said that China's now-defunct one-child policy, which limited each family to a single kid, has exacerbated the labor shortage. "The customer is really pushing for better quality and flexibility and lower cost," Wong explained. To him, that's a clear demand for automation.

But it's not hard to detect contempt in Hu and Wong's descriptions of their workers. Many of them come from rural communities, where they could work the land and feed themselves. Instead, they get jobs at CIG because "they want cash," Hu said.

"They want to buy an iPhone," Wong chimed in, adding that he's traveled in the countryside and "they all have iPhones." He said one nice thing about robots is that, unlike people, they "don't make trouble."

But people—1.4 billion of them in China—could make much more trouble if they suddenly find themselves jobless. Creating jobs is one of Beijing's top priorities: More important than human rights; more important than environmental protection; and even more important than projecting China's growing military and diplomatic power abroad.

"Chinese leaders' responsibility first and foremost is to lift the next 200 million Chinese people out of poverty," Eric Li, a billionaire investor based in Shanghai, told Motherboard.

If the government fails to do that, it could lose legitimacy. "If you don't deliver, you lose power," Li said. In that context, automation is very, very dangerous. "Artificial intelligence and robotics are perfect examples… of trends that are extraordinarily disruptive. The task of political institutions is extraordinary. If they don't reform fast, they're going to see revolts."

But it's not clear how China can roll back what Li described as the "quiet revolution" in industrial automation. China has embraced robotics for their near-term benefits, despite the long-term risks. "The government supports what we do," Wong said.

China not only aims to automate its plants, it wants to be the country that helps other countries automate their plants. With easy access to government loans, Chinese firms are snapping up foreign robotics companies and intellectual property related to automation. "The Chinese are trying to make robots for the world," Li said.

But what happens when the only job left for a human being is designing the robot that makes the robots that keep a factory like CIG's churning out tens of thousands of products a day? What happens when there are no more jobs?

It's not just a Chinese problem. The whole world needs to answer this question. But for Wong, there's no going back on automation. "Our strategy is we buy robots, we make more profit and in return we buy more robots."

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