Charles R. Goulding and Preeti Sulibhavi discuss the current surge of labor strikes and explore how 3D printing could help companies manage rising labor costs during negotiations.
The summer of 2023 was a hot season for labor disputes in the US.
Wage negotiations with UPS, Hollywood and the Auto Workers unions have been the current hot topic.
When a company significantly heightens a certain expense, it’s necessary to identify new methods of income and/or other expense reductions to preserve profitability. Each of the three labor groups mentioned previously can employ 3D printing as a tool for both revenue growth and cost minimization.
UPS
UPS resolved their latest labor contention by conceding to major wage augmentations.
Brian Newman, the CFO of UPS, deliberated over the expense of these inflated labor costs, which are projected to be around US$500 million exclusively for the remaining part of 2023. Newman stated, “Now that we comprehend the magnitude of this cost, I can strategize on managing the Profit and Loss to enhance margins.”
We’ve remarked on how UPS is among the organizations approved for, and implementing, out-of-sight licenses for the drones they employ for some distant deliveries. Yet, the CFO delved further into how UPS is exploring “innovative methods to boost efficiency.” This includes extended automation and the employment of innovative technologies to tackle recurring problems such as packages landing on the incorrect delivery truck, requiring subsequent resorting.
UPS has adopted several technological improvements to streamline and enhance various processes within its operations. They’ve integrated Dexterity, Fortna, and Plus One Robotics for efficient sorting of small packages, thus enhancing safety and job satisfaction for employees. Moreover, they’ve incorporated Pickle Robot’s unloading technologies to reduce physical demand of trailer unloading for workers, whilst ensuring better package handling and reliability for customers.
In terms of simplifying demanding tasks, UPS has included autonomous guided vehicles (AGV) from companies namely Dane Technologies, Geekplus, Locus Robotics, Crown Lift Trucks, and Toyota-Raymond. These AGVs make possible the transportation of small packages and irregular-sized shipments within UPS facilities, thereby enhancing safety and operational efficiency. UPS has also adopted digital technologies like Delivery Photo and Delivery Defense to strengthen the security of global deliveries, effectively reducing incidences of fraud for customers.
These are some of the cost-cutting measures that UPS is taking and 3D printing can be one of them. Whether it is to fabricate drones or create replacement parts for UPS’ vast truck fleet, we have covered how 3D printing can be useful.
Hollywood
We have also covered the Hollywood actors’ and writers’ strikes. Now, with the SAF-AFTRA strikes resolved, audiences can now expect to see more new episodes of their favorite shows and movie production is resuming as well.
Hollywood is grappling with the ongoing effects of the pandemic, causing problems with production schedules and supply chains. One avenue for generating revenue during this time is through the sale of branded merchandise, such as toys and accessories. Such merchandise represents a significant revenue stream for films from Disney, Marvel, and other blockbuster franchises, like Barbie. In previous posts, we’ve discussed the role of 3D printing in creating toys and collectibles.
United Auto Workers
The United Auto Workers (UAW) strike is having a significant impact on the labor forces of the “Big Three” – Ford, General Motors (GM), and Stellantis. This strike is hitting middle-class workers hard – these workers being the backbone of the US economy. Even President Biden joined in on the UAW strike last September. Among the demands of the auto workers are concerns about the rapid transition towards electric vehicles (EVs) – an issue at odds with the Biden administration’s latest energy policies. The workers’ worry is that the shift in focus from internal combustion engines to EVs could cost them their jobs, especially considering EVs require around 40% fewer people for production, with no assurances that EV factories will be unionized.
3D printing technology offers potential solutions to some of these problems. It can be used to manufacture replacement parts, thereby reducing inventory costs. In line with this, 3D printing can also create new revenue sources by providing aftermarket accessories for automobiles.
As of last week, all three automakers have reached tentative deals with the union. Ford was first to announce its tentative agreement with UAW on Wednesday, October 25, 2023, with Stellantis and GM following suit less than a week later.
The Research & Development Tax Credit
The now permanent Research and Development (R&D) Tax Credit is available for companies developing new or improved products, processes and/or software.
3D printing can help boost a company’s R&D Tax Credits. Wages for technical employees creating, testing and revising 3D printed prototypes can be included as a percentage of eligible time spent for the R&D Tax Credit. Similarly, when used as a method of improving a process, time spent integrating 3D printing hardware and software counts as an eligible activity. Lastly, when used for modeling and preproduction, the costs of filaments consumed during the development process may also be recovered.
Whether it is used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.
Conclusion
There is a way to include 3D printing in these three labor disputes. Whatever the outcome is, there will be a need for cost-cutting measures and increasing revenue streams. 3D printing can assist in improving the profitability of companies in these industries, especially when labor costs are higher.
“Why did the 3D printer go to therapy? Because it had too many layers of unresolved issues!”
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