The Oklahoman

Robots outnumber humans at facility

However, Amazon says it is still hiring workers

- Joseph N. DiStefano

STANTON, Delaware – Amazon’s biggest, newest warehouse, with more robots than ever, brings America closer to an automated future when machines do all the work of moving everything from groceries to laptops, from makers to users. And do it faster.

While Amazon has been building increasing­ly automated warehouses since opening its first satellite center in 1997, five miles down the road in New Castle, Delaware, this $250 million showcase is something entirely different.

Inside the five-story plant – as big as 17 football fields, or four of Philadelph­ia’s tallest high rises – an electromec­hanical ballet performed by robots takes place in an eerie quiet. Robot vehicles, guided by optical and motion sensors, make turns tightly adjacent to one another, selecting and carrying Amazon’s vast array of merchandis­e from storage to delivery.

There are still workers unloading trucks from suppliers and stowing the contents – not in vast shelves for hands to grab but in eight-foot-tall stacks of square yellow bins. Once within these, goods begin their robotic travels.

Hour after hour, tireless robots seize the stacks and move them across the vast floors, dutifully pausing before isolated checkers, flesh, and blood, who wave electronic­s devices to verify the orders. Finally, workers pack the sorted goods onto conveyors to carry them to loaders for delivery.

And Amazon is developing drones and self-driving vehicles to speed those last steps.

Rival shippers such as FedEx or the U.S. Postal Service, big grocery chains, and upstart deliverers such as Philadelph­ia’s Gopuff have also been speeding up their warehouses. But Amazon’s massive investment will force its competitor­s to invest a lot more, a lot faster, analysts predict.

About 10,000 Amazon-built robots here far outnumber the 1,000 newly hired human workers who spend 10- to 12- hour shifts at the 3.7 million-square foot complex, which Amazon contractor­s erected on the site of a former General Motors factory that itself drew quite a bit of publicity in its day.

Does that 10-1 ratio spell an end to the massive hiring that has made warehouse work at double the minimum wage so widely available in recent years?

Amazon and its admirers are a little sensitive on this point, so it’s worth noting upfront: Amazon is still hiring, not just because so many workers don’t last a year, but also because its service is so popular that it keeps building more centers, adding people to run them, doing things robots still can’t. For now.

Amazon employed 1.3 million employees worldwide last year, up from 800,000 a year earlier. Among U.S. companies, only rival Walmart, with all its stores, employs more.

To be sure, some critical economists say Amazon destroys more jobs than it creates. Other analysts say that laborsavin­g has always been the goal of new technology.

In any event, Will Carney, the plant’s manager here, said, “Our hiring is not quite done.”

Amazon hopes it will be easier to keep human workers this winter, when the company has pledged to start providing workers up to $5,250 a year toward colleges costs. It may also add robots and employees in Delaware, though Amazon won’t detail its longerterm plans for the facility.

The staff, as much as it has grown since opening this summer, is still fewer than Amazon employs at fulfillment centers one-quarter this size.

The facility is the flagship of a sweeping expansion by Amazon across the Philadelph­ia region. Amazon has plans to open as many as nine new facilities in the coming months. That’s on top of the 14 sites added last year across Philadelph­ia and its suburbs, the Lehigh Valley, South Jersey, and northern Delaware.

In all, Amazon now has more than 57 centers up and running or underway across this greater Philadelph­ia region. Real estate and industry analysts call the growth unpreceden­ted.

Still, here in Stanton, Amazon is no replacemen­t for the former GM plant, where then-Sen. Joe Biden used to launch his political campaigns, gladhandli­ng the union workers.

Built amid farm fields in 1946, the old plant employed at its peak as many as 5,000 United Auto Workers members who built Oldsmobile­s, Chevettes and, toward the end, Saturns, before the last workers were let go in 2009 as a recession-wracked GM reined in production.

A Biden-backed proposal to build electric cars fizzled after burning through more than $200 million in state and federal subsidies.

Manufactur­ers add value, and GM paid well; distributi­on of goods made somewhere else was historical­ly a lot less lucrative. The GM plant, along with a nearby Chrysler factory, a DuPont paint complex, and a Claymont Steel works underpinne­d a prosperous postWorld War II American manufactur­ing economy. All four are closed.

Despite Amazon’s recent bump in pay up to $18 an hour – $3 more than Amazon projected two years ago when it announced its plan – the nonunion Amazon workers make less than GM workers did when the plant closed. (Less than half as much, adjusted for inflation.)

As wages creep up, Amazon has relentless­ly focused on consolidat­ing operations and speeding deliveries.

“This is just the beginning. You will see large centers like this throughout the country,” with other supersized facilities already rising in California, New York, Virginia, and Arkansas, said Subodha Kumar, a professor at Temple University’s business school and an expert on supply chains and informatio­n systems.

Robots make it easier to manage inventory, speeding the deliveries from Amazon’s smaller distributi­on centers in such cities as Philadelph­ia, said Kumar. Amazon now guarantees two-hour deliveries in many locations.

“They want 30 minutes,” he said. “They have plans to go shorter than that, if they can.”

Amazon said automation frees workers from dull, repetitive tasks. But workers have complained that automated production has been accompanie­d by speed-ups and a higher-than-average rate of injuries.

Why Delaware? It helps that the state gave the company, whose profits top $2 billion a month, about $4.5 million in up-front aid, while the local government cut realty taxes to a fraction of what GM paid. Wilmington’s proximity to workforces in Maryland, New Jersey, and Philadelph­ia’s southern suburbs helped, too.

“They try to find locations they can run at lower cost,” Kumar said.

(Amazon officials say the plant’s proximity to the Port of Wilmington, airports, and on-site railroad sidings don’t matter, since cargo goes in and out by truck.)

“I call these very large plants the ‘mothership­s,’ ” said Brittain Ladd, a former Amazon logistics executive turned automation consultant.

Ladd said Amazon’s latest expansion draws upon location and system-management lessons from its highly profitable Amazon Web Services network of services to corporatio­ns. He sees accelerati­ng automation as inevitable.

 ?? JOSEPH N. DISTEFANO/THE PHILADELPH­IA INQUIRER/TNS ?? Jairaj Vora is a manager at Amazon’s giant facility in Stanton, near Wilmington, Delaware.
JOSEPH N. DISTEFANO/THE PHILADELPH­IA INQUIRER/TNS Jairaj Vora is a manager at Amazon’s giant facility in Stanton, near Wilmington, Delaware.

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