ABB plans $20 mn investment in US robot factory

ABB announced it will be spending $20 million for expanding its US robot factory targeting customers in the automotive, packaging and machinery industries.
ABB robotics for US market
The expansion in Auburn Hills, Michigan, will create 72 highly skilled new jobs in the area and is supported by a $450,000 Michigan Business Development Program performance-based grant.  ABB already has a workforce of approximately 350 employees at Auburn Hills. ABB has already invested $14 billion in the US since 2010. ABB’s footprint in the US is more than 20,000 employees over more than 40 sites nationally.

The Swiss engineering company, which competes with Japan’s FANUC and Germany’s Kuka, is spending for boosting capacity to meet demand spurred by the Joe Biden administration’s industrial stimulus package, Reuters news report said.

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

Rapid growth is expected as US companies bring production closer to home to avoid logistic log jams which have gummed up supply chains since the global pandemic. ABB aims to deliver close to 90 percent of robots to customers in the US, Canada, Mexico and South America from Auburn Hills.

“After the most intense shocks to the industry, including COVID, the semi conductor shortage, and then the Ukraine war, businesses all want to become more resilient,” said Sami Atiya, President of ABB Robotics and Discrete Automation.

A survey by ABB last year showed 70 percent of North American businesses suffered supply chain disruptions in the last year.

As a result 37 percent of businesses wanted to bring their businesses back to the United States, while 33 percent were looking at near shoring – bringing it closer to the country.

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

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

Robots were now easier to use, making them attractive to smaller and medium sized business like bakeries, he added.

The IFR expects the numbers of industrial robots installed each year in the Americas to expand by an 8 percent per year over the next three years, much faster than Europe which will see growth at 1 percent.

China and Japan, the two biggest markets for robots, will grow at around 8 percent, IFR said.

“The U.S. market is particularly interesting because it is more open to foreign businesses because it does not have its own domestic brands,” said IFR general secretary Susanne Bieller.

“That’s different to China where they are trying to develop their own and Japan which is dominated by its own players.”

The Biden Administration’s $430 billion Inflation Reduction Act, which includes major provisions to cut carbon emission, boost domestic production and manufacturing, was not a direct factor behind ABB’s investment, the executive said.

The act, along with the $52 billion semiconductor manufacturing program, could boost demand.

Companies like Siemens and Audi have spoken about large investments in the United States on the back of the Biden stimulus, while chip manufacturers like IBM and Micron  also announced new production sites.

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