Adidas, the German maker of sportswear, has announced it will start pulling back its production lines from China back to Germany, but that it will will use machines instead of humans to make shoes.
More than 20 years after Adidas ceased production activities in Germany and moved them to Asia, Adidas unveiled the group’s new prototype “Speedfactory” in Germany. As of this year, the factory will begin large-scale production. What’s more, Adidas will also open a second Speedfactory in the U.S. in 2017, followed by more in Western Europe. According to the company, the German and American plants will in the “mid-term” each scale up to producing half a million pair of shoes per year.
At the moment, Adidas is producing 300 million pairs of shoes per year and growing its output in the double digits annually. That’s not even counting apparel and accessories.
Labour in Asia is also becoming less cheap these days, and manufacturers are increasingly turning to robots. The current model in the apparel industry is very much based on sourcing products from countries where consumers are typically not based. In the longer term Adidas could even produce the shirts of Germany’s national football team in its home country. The shoes made in Germany would sell at a similar price to those produced in Asia, where Adidas employs around one million workers. Arch-rival Nike is also developing its robot-operated factory.
This development in the shoe area is just the beginning and will be leveraged to the apparel industry as well. Put aside for a moment how moving jobs back to a country with high costs gives companies an incentive to automate.