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App. B—Commissioned Background Papers

Daiwa Securities America Inc.

Page -11-

MANAGEMENT

Japanese management on all levels has been more responsive to the

introduction of robots employment has created

than their American counterparts.

Life-time

greater

security

and

a

more

long-range

attitude

among Japanese managers. attitude. Japanese managers incorporating robots into p

The absence of stock options reinforces this are able to tolerate the high initial costs of reduction and are willing to accept a much longer

payoff than their American counterparts.

In the first year of robot

duction,

costs

interest

costs,

can and

be very high-- not only increases in depreciation, miscellaneous costs related to the robot (changes

intro- in the

plant and its equipment to accommodate the robots) , but also interference and slowdowns in production while the robot is being fully integrated into

p reduction. In one case study in Japan, for example, the company had anticipated that robots would increase production, and thus would permit

write-off of all costs within the first year.

Instead, production declined

and total American

costs grew by 30%.

managers

to

abandon

Similar experiences have caused many

their

robot

program.

But

the

Japanese

persisted and at the end of the second year total costs if the product had continued to be produced manually.

were

25%

less

than

Japanese managers are generalists, often shifted from one area to another that bears little relationship to their previous experience. On the other hand, American managers tend to be specialists and stay within one area of work during their entire career. This, at times, creates opposition, if not hostility, to a novelty such as a robot that might undermine their position. American reports are replete with tales of opposition to robots by middle and lower managers and conflicts between manufacturing engineers seeking to introduce new technology and production departments seeking to maximize current production and intolerant of any interference in output. Even the front line of management-the foreman-often see the robot as a threat to their status especially when the robot requires “care and feeding” by an inexperienced youth with a training in electronics who substitutes knowledge for strength.

In an atmosphere of relatively high interest rates the financial side of

U.S. management constantly seeks shorter and shorter payouts and American roboticists often see these “bean counters” as their enemy.

The

non-adversary relationship and the long-term outlook which pervades the Japanese company has successfully coped with the issues of robot intro- duction.

American and European companies were also, to some extent, side- tracked in robotics as they had been in the production of numerical control machinery. The Americans developed very expensive and very complicated NC machines so that when the computer broke down, the entire

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