Automation doesn’t necessarily lead to job loss, says leading Australian manufacturing business CEO


Dr Herbert Hermens, head of Australian-owned manufacturer Keech, has dismissed the notion that automation will force people out of jobs as unfounded and “alarmist”.

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Mr Hermens, whose company specialises in making steel castings and wear resistant products for the mining, construction, industrial, agriculture and rail industries, believes that a move toward automation is more likely to bring more value to businesses.

“Some businesses are failing to see the opportunity that automation brings – the opportunity to educate people and reskill the workforce in a movement towards more specialty skills that we can then export to the rest of the world. This will bring significantly more value to their operations than simply cutting jobs,” he said.

A recently released report by the Committee for Economic Development of Australia (CEDA) has found that 18.4% of the country’s workforce had a “medium probability” of losing their jobs in the next two decades. Mr Hermens, however, is on the opinion that those fearing about the future prospects of Australian businesses are “missing the point” of the report.

“Automation should be used to strengthen Australia’s position in the global market. It allows us to be more nimble and quick to respond to changing trends.”

Through continuous investment in automation in the last five years, Keech – which predominantly services the mining and resources sector – has seen about 10% growth in a market that has been in steep decline. Mr Hermens said his company recently expanded its capabilities through the adoption of industrial 3D printing and continues to invest in new technology.

“Keech invests 7% of its turnover into R&D and we’ve thrived for more than 80 years through constant adaptation. We’re moving a substantial percentage of our manufacturing processes to an automated system. Put simply, we’re embracing automation to improve market share, have better control, better quality products, and improve our global position,” he said.

“This is not just a cost cutting exercise. Our goal is not to shed staff. We’re implementing a training program to re-skill and re-deploy staff within the company. We hope to continue the move towards automation in our foundries over the next 15 years, but foresee no real reduction in labour over this time. This cost will be absorbed in our growth.”

Dr Hermens is a firm believer in the need to upskill Australia’s workforce and claims that both government and private entities should take an “active role” in stimulating the manufacturing sector.

“There is an urgent need for additional emphasis on science, technology, engineering and mathematics courses and a move for young people towards earlier engagement and training so they can continue to add value.”

He insists that workers’ training and re-deploying their skills within operations are key to progressing towards value added businesses.

“Keech is partnering with universities and other industry groups to ensure we continue to improve everyone’s capability and improve our business capacity. We recognise the opportunity automation presents to make developmental improvements and are embracing the advancement as a positive and necessary change.”