246 ANNUAL REPORT SAnTHSONIAN INSTITUTION, 1953 



in plastic, in transistors which will substitute for vacuum tubes, tradi- 

 tionally the least reliable electronic component, and in unitized cir- 

 cuits in which whole plug-in segments can be readily replaced, elec- 

 tronic controls can be as reliable and as easily maintained as the 

 machine itself. 



Inertia is another deterrent to automation, especially in a period 

 of easy profits. Still another is business uncertainty. Another is 

 the type of management thinking which keeps equipment operating 

 long after it is technologically obsolete. It is usually easier to obtain 

 funds to keep an old machine running than to purchase a new 

 unit, especially if the old machine still operates well and shows a sub- 

 stantial undepreciated value on the books. At the same time it must 

 be evident, to anyone who will exercise the most elemental logic, that 

 book value is in no way relevant to the question of whether or not 

 a machine should be replaced. Obsolescence is the result of tech- 

 nological change and is not affected by accounting procedures. 

 Whether the machine is 1 year or 20 years old, the question of whether 

 or not it should be replaced with a better machine depends entirely 

 upon comparative performance in the future, not upon bookkeeping 

 entries of the past. As a rule of thumb. Ford assumes that automation 

 tooling is justified if it will increase production and if its probable 

 cost will not exceed $3,000 per man transferred. The figure is very low 

 to insure a writeoff within the model year. Most plants are satis- 

 fied with a payoff within 3 to 5 years. The intangibles and un- 

 predictables usually result in a much faster writeoff. 



Labor groups have in many plants retarded technological progress 

 by insistence on former piece rates, prohibitions on the assignment 

 of workers to more than one machine, and outright obstructionism. 

 At the same time, the increased cost of labor is without question one 

 of the greatest incentives to increased automation, and the higher labor 

 wages go the more the likelihood of replacement. 



High income taxes and unrealistically low depreciation rates have 

 also retarded plant improvement. Management often asks "Why 

 invite labor trouble and tie up more capital when the Government 

 takes away in taxes most of the benefits from improved efficiency?" 

 It should be noted, however, that with taxes currently at an all-time 

 high, plant investment is also at an all-time high. 



What is the future of the automatic plant? One tries to be logical 

 and realistic in appraising the prospects and to avoid the temptation 

 to overrate the possibilities. And like being a poor lawyer, it is far 

 easier to be a poor engineer, easier to find reasons why it cannot be 

 done, than develop ways in which it can be done. But there is danger 

 in being too logical. The famous individual who resigned his position 

 in the U. S. Patent Office because there was nothing left to invent was 

 attempting to be logical. 



