Automation and the Importance of Reskilling Workers: A Case Study in the Automotive Industry

Abstract

Rapid technological developments, especially the spread of automation and artificial intelligence (AI), have been transforming the world of work, raising some concerns about the future of employment. Automation presents both opportunities and challenges for the labor market. While we can expect productivity to grow with automation, and with-it economic growth, the fear of job loss linked to automation is also present. This paper aims to study the impact of automation on employment, with a special focus on the automotive industry, which stands out as one of the sectors most affected by automation. A second objective is to examine the reskilling procedures implemented by companies in this context, with a view to identifying effective strategies that bring benefits to both the employer and the workforce. To analyze the implications of automation in the automotive industry and the strategies adopted by companies to face these implications, we carried out an exploratory case study, using interviews, with the participation of four companies located in the districts of Minho, in the North of Portugal. The results show that, considering the impact of automation on employment, there is no negative impact since the destruction of some jobs was compensated by the creation of new ones. As for the reskilling procedures implemented by companies, results indicate that reskilling and upskilling are important strategies to prepare workers to transition to new jobs and tasks. Automation has been present in the automotive sector for many years and it has been gaining greater relevance over time. Businesses gain from several benefits provided by automation, including improved value for money, increased productivity, and increased worker safety. At the same time, they also face some challenges, such as high investment costs and workers' apprehension about transforming workplaces. Nonetheless, the investment pays off since companies invest heavily in reskilling their employees, and thus have a more qualified workforce that is prepared for any change that may arise. This paper contributes to a deeper understanding of the implications of automation in the labour market in the automotive sector and highlights the importance of workforce reskilling for the sustainability of companies. These findings are relevant for both employers and employees.