Amazon Buys Robot Company for $755M Reducing Warehouse Staff’s Duties to Standing Still and Pushing Pretty Red Buttons

 

Kiva Systems is a company that found some success selling their warehouse robots to many major retailers looking to keep up with the juggernaut that is Amazon.com notable clients of their included the GAP and Toys “R” Us.

However, just recently Amazon responded with a big capitalistic FU to their competitors by buying Kiva Systems. This means that Amazon now kind of owns the distribution systems of many of their rivals.  The price of $755 million doesn’t sound too crazy now, does it?

But as we shall see, the real loser in this deal is the human race.  This is because along with this acquisition, Amazon is now the proud father of Kiva’s army of tiny orange warehouse robots.  Kiva’s promotion video gives us a bleak view of how the world will look when the robots take over.

Upon watching the video the first thing that you’ll notice is how poorly produced it is; like a 1980’s sexual harassment training video.  Hopefully Amazon will step in here and give it some zing.

Moving past that, we can see that Kiva’s warehouse system replaces traditional racks with dynamic ones carried by little orange robots that look like those things that scooted around the floor of the Death Star.

In the same way these little robots zoom along the warehouse floor to bring items directly to their human coworkers.  This frees the human worker of duties which require training like moving or thinking.

When products arrive to the warehouse the monk… I mean human places a tracking device with a pretty flashing red light onto the box of goods.  The robot then comes along carrying the correct shelf for that box.  Once the box is loaded the human zaps the shelf with a laser. Then it scurries off to its proper place and the next shelf comes along.

Outgoing shipments basically work in the same way where the robots come and go around a human who moves the items from one shelf to another putting the appropriate items into their outgoing package.  The human again doesn’t need to learn complex skills like literacy because the robots tell them where to put each item with a flashing red light.

When the outgoing box is full the robot carries the shelf to another human whose duty it is to tape the box closed and pass it off to yet another robot.

The inventory system and orders are all managed on a server by “distribution center operators” who can arrange shelves in the best places at the best times avoiding any complicated rearranging of goods.

Whether the “distribution center operators” are in-house or work for Kiva is uncertain from the video.  However it does make one stroke their chin in suspicion of what Amazon might be able to do with such information if they can get access to it.

Back in the warehouse though; with the diminished physical and mental capacity needed for the job, human workers should be able to pull off 72 hour shifts before any loss in efficiency is noticed.  This is great news for the bottom line.

The glaring truth in this video is that the only thing keeping humans in Kiva’s loop is our opposable thumbs.  So when we start seeing robots with thumbs, that’s when you really know it’s all over for our kind.  It’s just like in a documentary I saw called Terminator 2.

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Amazon under fire for unpaid Christmas helpers

 

Online retail giant Amazon has come under fire in Germany for using nearly 1,500 people on the most basic social support as unpaid packers in its logistics centers in the run-up to Christmas.

The company wanted to assess the workers’ potential for longer-term work, Die Welt daily reported this week. It said the majority of those working at the warehouses in Unna and Rheinberg am Niederrhein were kept on. The workers are those on Hartz IV social support, which continues to be paid as they try out for new jobs – at no cost to the potential employer.

But the service industry union Verdi and state labor minister for North Rhine-Westphalia Guntram Schneider, said the workers were being exploited – while their basic incomes were being financed by the state.

“It is simply not acceptable that a company gains a competitive advantage via this kind of state-funded test employment,” Schneider told the paper, and promised that his ministry would check how legal the scheme was.

Verdi said no other mail-order company in Germany used the try-out provision on the scale that Amazon does, adding that the union had long been critical of Amazon’s employment practices in Germany. These include a lack of wage agreement with workers’ councils, no Christmas or holiday pay, and the fact that two thirds of staff are on temporary contracts.

The union also said workers’ hands were constantly scanned electronically and that if they remained inactive twice in five minutes, they received a warning.

Yet the Christian Democrat Union opposition politicians in North Rhine-Westphalia criticized Social Democrat Schneider’s misgivings, saying he was bringing “a very successful work creation scheme into disrepute.”

The regional Labor Office in Düsseldorf said such training measures for Hartz IV recipients were possible for up to four weeks at a time. “I would find it a scandal if we were not longer able to offer them,” said Werner Marquis, manager at the office. He said it was a win-win situation for all parties.

He said one of the warehouses had a personnel take-up rate of 90 percent. “What more do we want?” he asked.

Amazon said in a statement, “We offer untrained workers as well as long-term unemployed a chance of a workplace and a return to working life.”

It said it aimed to take as many of the seasonal workers on long-term as possible.

 

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Amazon’s China Story Continues: Planning For Kindle, Kindle Fire Release? 

 

Amazon (NSDQ: AMZN) appears to be ramping up its activities in China. Today a report notes that the company is in talks with the Chinese government to retail its Kindle products, including e-readers in the country. If true, that would make China the first market in Asia to get a local Kindle product. The report today follows the news from yesterday that Amazon had officially rebranded its China operation solely under its own name, and taken a new Chinese URL in the process.

The report on the Kindle in China comes from Sohu IT (via MenaFN), which quotes Amazon’s SVP Marc Onetto as saying that the company was in talks with the government over a launch, and still needed to address areas like content copyrights for the Chinese market.

Those talks could go on for some time: Onetto also noted that no timeline for rollout had been set, nor did Amazon have any plans to share about working with local vendors to offer the device. In markets like the U.S. and UK, the Kindle comes bundled with connectivity either via WiFi or 3G, which Amazon gets through direct agreements with local carriers. That means the user pays a one-off price for the device with no recurring monthly charges for data services (paid e-books not included). But it took nearly two years for Amazon to launch the Kindle outside of North America.

We have contacted Amazon to comment on the report and will update this post as we learn more.

Amazon clearly sees a big opportunity for more business in China, even if it has not fully realized it yet. Onetto notes that operating revenues for Amazon have grown by 80 percent—not clear on the growth timeframe, though—and that China currently stands as second behind the U.S. for Amazon in terms of sales.

The company, according to TechWeb, already has some 400,000 square meters of warehouse space in 10 distribution centers, roughly one-third of the warehouse space it has in the U.S.

The Chinese business comes by way of its acquisition of Joyo in 2004, and until yesterday the company was known as Joyo Amazon.

Amazon currently makes 43 percent of its revenues outside of its home market; it’s not clear how much of it comes from China, although a report last year from Goldman Sachs estimated that in 2011 the company could make revenues of over $1 billion in the country. In the last quarter, the company reported $10.88 billion in sales, on net income of $63 million.

This is not the first report in recent times that floats the idea of the Kindle extending to Asia. Last week it emerged that Amazon is apparently working on also launching the device in Japan. If Amazon concentrates on launching a key-board free version of the Kindle, and the Fire tablet, in these markets, that will overcome at least one major hurdle in terms of making devices that are usable in countries where English is not the local language. 

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