November 20, 2011

November 20, 2011. Boston. With the holidays upon us, many are going to be asking Santa for just one thing – a job. The White House and Wall Street have been celebrating recent statistics showing the unemployment rate stabilizing at 9 percent. In fact, the number of new unemployment applications has recently been going down.

Critics argue that it’s only because millions of jobs vanished and there are fewer jobs out there to be lost. But where did all those jobs go? Some went to China and India. Some went out of business. And some, many in fact, were taken over by a legion of evil job-stealing robots.

Calling the robots evil may sound harsh. But it’s okay. They have no feelings. That’s the whole reason the nation’s largest corporations traded in the American worker for them. Robots have no shame, pride or even civil rights for that matter. They don’t complain, get hurt, pregnant, stoned or steal. In short, the American worker has been replaced.

Anyone who’s ever seen the movie the Terminator with Arnold Schwarzenegger knows how this story ends. Robots take all the jobs while computers are enlisted to supervise them. As soon as the first computer is taught to think for itself, it’s all over for mankind. A worldwide civil war between humans and robots ensues that ends in a nuclear holocaust and mankind needing to travel back in time to save the human race, from itself.

While the movie the Terminator is science fiction, each day seems to bring us closer and closer to that reality. The latest example comes from a recent CNN Money exclusive.

The cable finance show recently featured a story titled, ‘Robot Army Helps Run Warehouse’. The report featured a well-connected entrepreneur who used a string of friends, favors and funding to launch a company that is not only destroying America’s jobs, but bringing the Terminator movie one step closer to reality.

Mick Mountz launched the firm Kiva Systems after his eye-opening experience working for online grocer Webvan.com. “That 89 cent can of soup was costing us one dollar to get it into the tote,” Mountz told CNN Money. With millions of employees rushing around tens of thousands of giant warehouses across the country, Mountz says he realized there had to be a better way. His solution – replace the human warehouse workers with robots.

Mountz left his job at Webvan.com in 2002 and launched Kiva Systems. A small operation running out of a tiny office with no product and only an idea, Mountz enlisted the help of friends and acquaintances. Working his network of social contacts, Mountz secured $1.6 million to launch his idea. Next, he convinced some of his old frat buddies from MIT to help him build a prototype. By 2004, another friend had introduced Mountz to an executive in the Boston office of Bain Capital.

As detailed in the CNN Money story, the Bain managing director watched a crude demonstration inside the cramped Kiva Systems office outside of Boston. There, he watched a robot pick products off a made-up store shelf and realized he was witnessing, ‘a disruptive technology that could transform the $100 billion e-commerce market’. Bain Capital invested an initial $5 million, followed by an additional $15 million. While the money funded the manufacturing of the robots, it was Bain’s powerful list of friends that really made the difference for Kiva Systems.

The Bain Capital director introduced Mountz and his warehouse robots to many of his own friends and business associates. Many just happened to be executives at large corporations like Walgreens and Staples – companies with giant warehouses of product and thousands of workers filling orders and stocking shelves. With Mountz’ guarantee that the Kiva Systems’ robots could fulfill two to three times as many orders as their human counterparts, and eliminate all the drama and costs of human warehouse workers, a handful of companies gave the robots a chance.

Staples is reported as being one of the first to bring Kiva’s robot workers into its facilities. Testing the system in a small area initially, the company was eventually sold. They replaced their human workers with hundreds of robots at first. Now, Staples has 1,000 robots working at two of his warehouses. CNN Money reports that a start-up kit for the robot workers costs between $1 and $2 million. One large warehouse employing 1,000 robots costs upwards of $15 to $20 million.

With the rest of America suffering from the terrible economy, Kiva Systems is in the middle of a boom in business. The company reports revenue of $100 million and excitedly announced that sales more than doubled last year, increasing 130 percent. The company currently employs 250 people and says it is hiring about 100 additional employees a year to keep up with demand for its robot workers.

Among the more than two dozen corporations listed as Kiva Systems’ customers are:

• Saks Fifth Avenue
• GAP
• Office Depot
• Toys R Us
• drugstore.com
• Boston Scientific
• Walgreens
• Crate & Barrel
• Estee Lauder

Some argue that the robots need to be managed by human beings and at least we still have those high-paying jobs. But the article ends with an ominous observation by Crate & Barrel VP of Logistics John Ling. Inside the warehouse where the Crate & Barrel robot workers are picking thousands of orders, Ling admits, “Most of this stuff is driven by computers anyway.”