In Taiwan’s Machine-Tool Industry, Contract Workers Do More than Scrape By
TAICHUNG, TAIWAN—The factory floor of Dah Lih machinery in Taichung, Taiwan is massive, clean and busy, with metalworking, assembly and inspection of machine tool components. Most of the workers are in the company uniform of a button-down short-sleeve shirt with the company logo. Most, but not all. One is intently hand-scraping the guideways of a five-axis machining center and wearing a white t-shirt with rolled-up sleeves. In this area of the factory are a few others, similarly attired and also doing the all-important work of hand-scraping hard, flat metal surfaces.
These are contract workers, explained Tim Wen of the company’s international operations department. The facility’s full-time workforce of over 250 people is supplemented by 50 such workers.
One might assume that these contract workers, as they are in many businesses in many countries, are lower in the pecking order than the full-timers, with lower pay, fewer or no benefits, hired on at busy times and let loose when not needed. That assumption would be wrong however.
The 60-km2 “golden circle of manufacturing” around Taichung is home to literally tens of thousands of factories. The Taiwan External Trade Development Council estimates that at least 350,000 metalworking professionals work in this region.The council recently sponsored a media tour of ten machine-tool companies in this area, including Dah Lih. Taiwan manufacturing prowess is becoming recognized, but slowly. Like Japan and Korea, the island nation has transformed itself from being a maker of cheap but low-quality equipment to becoming a highly efficient and skilled maker of top-level machines. Japan and Korea’s reputations lagged behind their prowess: Americans in their middle years can still remember when “Made in Japan” was shorthand for cheap and shoddy. Times change. Taiwan now seems to be occupying a moment in their history when its own ability to make high-quality equipment is at a high level, but its reputation in the public eye hasn’t caught up yet. These manufacturers and their machine-tool products are still largely a well-kept secret.
Among those keeping the secret are customers in Europe and Japan who are machine-tool makers themselves. Litz Hitech and Exact Machinery are just two companies in the Greater Taichung area that make complete machines for machine tool makers in Europe to sell under those customers’ names. Exact’s rotary tables and Litz’s laser engravers—in their customers’ well-known colors—were easy for visitors to see (but not photograph: no cameras were permitted) on their factory floors, a testament to both quality and secrecy.
As Japan’s and Korea’s did, however, Taiwan’s reputation around the world is catching up with its prowess. That prowess depends on quality control systems and lean programs to keep each company at the top of its game. And of course it depends on a skilled workforce.
And that brings us back to those t-shirted contract workers. Among these tens of thousands of companies there is a lot of competition for skilled workers—and more so in recent years, according to Dah Lih’s Tim Wen. Dah Lih Machinery was founded in 1960 and currently has workers that include veterans of 40–50 years of experience here. But as in other developed countries, the past couple of decades has seen local and national government encouraging young people to attend universities and forego the manufacturing realm.
“Now, all of these young people have huge school loan debts—and manufacturing doesn’t have enough new engineers,” Wen says.
The companies in the Greater Taichung area have a further disadvantage when it comes to attracting young workers, he points out: Taichung doesn’t have the glamor of the capital of Taipei and is also a landlocked area of an island nation.
Dah Lih is taking steps to alleviate the shortage of young talent, Wen says. As other companies are doing, Dah Lih is now collaborating with universities and vocational schools to offer students a dual system that combines hands-on work at a factory with classes at school. These moves haven’t really changed the trend as of yet, however, Wen says.
For all of these reasons, the experienced craftsmen (and as of now they are all men) who do crucial precision work such as hand scraping are in an enviable position of being a rare and dwindling commodity. As individually contracted workers, they make about double the salary of the full-time employees in the plant. They are completely responsible for the quality of their work; if they do something incorrectly, they must fix it at no charge. But this is seldom an issue at Dah Lih, Wen says.
Some of the aging contract workers are now bringing their sons in to learn the craft, hoping to pass on the work to them without either generation becoming a full-time employee of a single company. There aren’t enough sons—or at least interested sons—to replace their aging fathers, however, Wen notes—and so, for now, the hand scrapers in their white t-shirts stand out as beneficiaries of this local version of the aging-workforce challenge.