They thought Henry Ford II wanted to eliminate them... but he really gave them new life. After World War II, a period of prosperity and rapid industrialization began in the U.S.
Editor's note: When big technological changes happen, they inevitably bring out the naysayers and fearmongers...
It's a natural reaction to be fearful of change – particularly when it comes to automation. Today's essay covers that idea. It's from Chaikin Analytics founder Marc Chaikin. And it published earlier this year in January in the Chaikin PowerFeed.
As you'll see, it's a good reminder to keep calm when it comes to "automation hysteria" about one big technology today...
They've Always Hated This Advancement
By Marc Chaikin, founder, Chaikin Analytics
They thought Henry Ford II wanted to eliminate them... but he really gave them new life.
After World War II, a period of prosperity and rapid industrialization began in the U.S.
Factories that previously churned out bombers and tanks to support the war efforts were reborn. They started producing everything from refrigerators to TVs to new cars.
But folks didn't embrace all the changes of the post-war boom...
Workers at Ford's factory in Detroit went on a 25-day strike in 1949. The strike paralyzed the assembly line. And it eventually involved more than 100,000 workers.
The striking workers left hundreds of half-finished Tudor sedans sitting on the factory floor.
Specifically, they hated Ford Motor President and CEO Henry Ford II's plan to "automate" production. He wanted to add a modern stamping plant, two engine plants, and a foundry.
In other words, Ford wanted to use machines to make things more efficient.
Understandably, the idea of machines replacing human auto workers at the factory led to an "automation hysteria." Practically everyone in the plant thought they would lose their jobs.
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The automation machines made cars faster than Ford's army of human workers. They could stamp, cut, weld, and spray paint faster – all without posing a risk to human health.
But the machines at the factory still needed human operators...
Someone had to move the cars from machine to machine throughout the assembly process. And the machines couldn't tell on their own if they needed to speed up or slow down.
The machines also couldn't tell if a bolt was out of place, a fender seemed out of shape, or if the paint was off. So when it came to ensuring quality, human workers were still essential.
After Ford introduced automation machinery, the company's annual production more than tripled from 1948 to 1957. And at the same time, its workforce grew 46%.
In other words, Ford's automation efforts didn't eliminate the army of human workers. The surge in productivity instead meant the carmaker could scale its output many times higher.
Ford wasn't alone, either. The "golden age" of the U.S. car industry is well known today...
Every major carmaker pushed to automate its assembly lines around the same time. And annual U.S. car production boomed from 3.5 million in 1947 to 6.1 million in 1957.
That was only the start of U.S. carmakers shifting to more automation, of course.
The industry now features nearly a third of all the country's industrial robots. An average carmaker operates 200 to 300 robots dedicated to simple tasks like machining and welding.
And these days, robots can do a lot more than just put cars together...
Last year, the U.S. manufacturing industry reportedly had roughly 274 robot workers for every 10,000 human workers. That doesn't sound like a huge number. But these robots have eliminated the human element from many mundane and repetitive tasks in the manufacturing process.
Put simply, we've come a long way from the early days of automation – when workers feared for their jobs. Yet today, those early arguments are more familiar than ever...
I'm sure you've heard some of the apocalyptic predictions about artificial intelligence ("AI").
We're now living in a new age of automation hysteria.
And well, I don't have a crystal ball. So I can't say exactly what tomorrow will bring.
But I do know one thing for sure...
The AI craze has created a massive tailwind behind tech stocks in this market. And as always, I'll be using the Power Gauge to find the best ways to capitalize.
Good investing,
Marc Chaikin
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.16%
10
10
10
S&P 500
UNCH
85
248
163
Nasdaq
-0.06%
24
51
25
Small Caps
+1.05%
444
1010
451
Bonds
+0.02%
— According to the Chaikin Power Bar, Large Cap stocks are more Bearish than Small Cap stocks. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Information Technology
+3.53%
Financial
+2.74%
Health Care
+2.44%
Discretionary
+2.31%
Real Estate
+2.02%
Communication
+1.65%
Industrials
+1.5%
Energy
+1.46%
Utilities
+1.42%
Materials
+1.03%
Staples
+0.04%
* * * *
Industry Focus
Semiconductor Services
8
20
11
Over the past 6 months, the Semiconductor subsector (XSD) has underperformed the S&P 500 by -4.35%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #10 of 21 subsectors and has moved up 8 slots over the past week.
Indicative Stocks
ADI
Analog Devices, Inc.
ALGM
Allegro MicroSystems
WOLF
Wolfspeed, Inc.
* * * *
Top Movers
Gainers
WBA
+5.33%
AMTM
+3.94%
DLTR
+3.83%
TGT
+3.01%
BBY
+2.9%
Losers
TSLA
-2.32%
FICO
-2.01%
CTAS
-1.64%
SMCI
-1.63%
TRGP
-1.56%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
No earnings reporting today.
Earnings Surprises
No significant Earnings Surprises in the Russell 3000.
* * * *
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