ABB invests in US robot factory as reshoring trend picks up

By John Revill

ZURICH (Reuters) – ABB is expanding its main US robots factory as its customers in the auto, packaging and machinery industries there face a tight labor market as they bring production back 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, Michigan site to meet demand fueled by Biden’s massive industrial stimulus package. government was boosted.

The United States is the third largest in the global robotics market, which ABB and the International Federation of Robotics (IFR) estimate is worth around $50 billion a year.

Rapid growth is expected as US companies move production closer to home to avoid logistical congestion that have glued supply chains since the global pandemic.

“After the biggest shocks to the industry, including COVID, semiconductor shortages and then the war in Ukraine, all companies want to become more resilient,” said Sami Atiya, head of ABB’s Robotics and Discrete Automation division.

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

A survey by ABB last year found that 70% of North American companies suffered supply chain disruptions in the last year.

As a result, 37% of companies wanted to bring their businesses back to the United States, while 33% considered nearshoring – to bring it closer to the country.

A tight labor market and rising wages make robots more attractive.

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

Robots are now easier to use, which makes them attractive to small and medium-sized businesses like bakeries, he added.

The IFR expects that the number of industrial robots installed annually in America will grow by an average of 8% per year over the next three years, much faster than in Europe, which will see growth of 1%.

China and Japan, the two largest markets for robots, will grow by about 8%, according to the IFR.

“The US market is particularly interesting because it’s more open to foreign companies because it doesn’t have its own domestic brands,” said IFR Secretary General Susanne Bieller.

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

The Biden administration’s $430 billion anti-inflation bill, which includes key provisions to reduce carbon emissions and increase domestic production and manufacturing, is not a direct factor in ABB’s investment, the executive said.

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

Companies like Siemens and Audi have spoken of big investments in the United States due to the Biden stimulus, while chipmakers like IBM Corp and Micron have also announced new manufacturing facilities.

“The growth potential in the industrial robot market is enormous,” said Atiya. “We see double-digit growth for the US market over the next few years and see no reason why that should change.”

(Reporting by John Revill; Editing by Alexandra Hudson)

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