Will AI in the automotive sector be a challenge to the product electrification? Which consequences for labour in Portugal?

Type de publication:

Conference Paper

Source:

Gerpisa colloquium, Brussels (2023)

Mots-clés:

Artificial intelligence, Automation, electrification, Portugal, workers committees

Résumé:

Besides the restructuring process transition to the electric vehicle, we have to consider as well the transition towards intelligent automation. As the Portuguese sector is characterised by a strong dependency on the value chain as high end supplier, such restructuring (electrification and automation) has a strong impact on the whole employment sectoral structure.
Intelligent automation will require data from the whole automotive value chain, which means a sophistication of both suppliers and OEMs will be needed.T he transformation of the structures and systems that underpin the automotive industry are mostly related to the following factors: a) the rapid technological developments leading to improvements in design and manufacturing, b) increases in digital driving systems, c) the changing of consumer preferences, d) the growing concern about sustainability and climate change and finally e) the regulatory pressures and measures. An example of such transformation is the rapid rise in the global supply and demand for electric vehicles (EV).
In terms of technological developments, these are being integrated into already highly advanced manufacturing in order to reduce lead times and increase customization. Furthermore, digitalization is disrupting the entire automotive supply chain, from product design to the sale of automobiles. As portugal has a main expertise on the supply level, these changes will affect deeply the labour market structure in the sector. For the whole global value chain, the advances are also enabling manufacturers to offer new products and services, such as EVs and (in less extend) automated vehicles (AVs).The digitalization process in this sector is set to revolutionize the entire automotive supply chain. Interconnected supply chains improve end-to-end management of the production process and drive down costs and lead times through partner system integration and advanced data and analytics. This can be done together with increase of efficiency of the process from design to manufacture and distribution. As the ILO report underlines, “digitalization is further altering the automotive value chain through the predictive maintenance of vehicles. (…) Continuous data analysis enables a system of preventive maintenance that reduces critical failures of vehicles, enhances driver safety and lowers the frequency and severity of recalls” (ILO, 2020: 18).
challenges of digitalization, their readiness and capability to adapt to the challenges of digitalization depends upon their size: the smaller the SME, the more likely it is to suffer rather than benefit from the industry-wide changes brought about by digitalization. In terms of sectors, in the German automotive supplier industry, about 54% of the companies report strongly or predominantly automated production; in 36% of the firms the production is characterized as mixed, i.e. it consists of automated and predominantly manual areas; only 10% of firms still have predominantly manual production (Krzywdzinski, Jürgens, and Pfeiffer 2016).
Our research in Portugal was based in secondary data analysis on the labour market in the automative sector (NACE 29) and on interviews with social partners (employers associations and workers committees) of component supplier sector. These interviews took place between October 2022 and January 2023. The literature review on the digitalisation transition, as well on experiences in product electrification in the Portuguese automotive sector (OEMs and suppliers), was also organised during the last two years.
The Portuguese report for ILO mentioned that “interviewees have stated that Industry 4.0 applications and automation are a reality, including robots, cobots and AI. For example, technological development continues to advance at Mitsubishi Fuso, as evidenced by the November 2020 announcement of a new tool using machine learning and advanced language processing techniques to improve quality management processes. Yet, there is a visible gradient in technology adoption between large firms and SMEs. The current focus is on digitalization rather than automation, as automation levels in the industry are traditionally high” (ILO, 2022: 50) in the automotive sector.
As we have concluded in other study, “therefore, the expectation is not for automation to replace workers but augment their capacity to perform their tasks and/or alleviate burden, in the short time. Robotics, automation, and computational vision will have widespread adoption in one to two years. However, cloud, plug and produce, blockchain and AI will take longer to be implemented as they involve connectivity, monitoring, data collection and automated decision making with implications at management level” (Moniz, Candeias and Boavida, 2022: 236).
But, if it is expected a job substitution at OEM due to the electrification of powertrain, the impact of this transformation will also impact the suppliers industry. This may have an increased impact on the Portuguese labour market of the sector.
However, we also agree with Pardi, Krzywdzinski and Luethje when they conclude that “even in routine based standardised jobs in the assembly line, when product complexity and variability is high, human work and tacit collective skills remain central in order to cope with uncertainties and non-standard work situations. Trade unions should pay attention to the status of this ‘real’ collaborative work, the recognition of the tacit skills involved, as well as the conditions under which these skills are integrated (or not) in new digital manufacturing system. Trade unions should try notably to be actively involved in the design and implementation of these technologies whenever possible. They should challenge in particular the top-down revival of the ‘high technology drive for automation for the sake of automation pushed by consultants and technology providers, and engage with local engineers and factory managers in bottom-up 'human fitting and motivating' automation strategies” (Pardi, Krzywdzinski and Luethje, 2020: 22).
This process to technological transition towards electrification and digitalisation in the automotive industry, will imply a large impact on the employment structutures of countries where the supply of components play na important role. The impact will be especially important in terms of new qualification needs for the workers than remain working in the sector, and on the substitution factor based on the product automation features. The challenges will demand a strong participation of workers representatives (unions and workers committees) in the negociation of technology development and application modalities. The competences for such negociation will become critical for the success of the industry in Portugal. This success involves all social partners and not only workers. In this regard, public policies supportive of these initiative may be critical.

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