In the just-passed year of 2014, the industrial automation industry experienced many significant events, many of which will impact the industry in the coming year and beyond. As the saying goes, looking back is to better move forward. As 2014 has just ended, let's review the year and summarize the major events in the field of industrial automation:

　　1. Vietnam Riots: Manufacturing Relocation is Not as Good as Robot Replacement

　　On May 13, 2014, large-scale anti-Chinese riots occurred in southern Vietnamese provinces such as Binh Duong. Overseas Chinese in Vietnam reported that an apparently organized group of Vietnamese motorbike gangs smashed Chinese-owned factories and shops, with more than a dozen Chinese factories set on fire. By the afternoon of May 14, 2014, Vietnamese police had arrested 500 rioters involved in anti-Chinese violence. These violent incidents not only caused 60,000 workers in Binh Duong province to lose their jobs but also inflicted huge losses on companies from China, Taiwan, South Korea, Japan, and other countries. Many international investors expressed that these events would severely damage Vietnam's image as an investment destination.

　　Commentary: In recent years, as labor costs in China have risen, many foreign-funded factories have withdrawn from China, choosing Southeast Asian countries like Thailand and Vietnam with lower labor costs. Although this move saves costs to some extent, these countries also face political instability and inadequate infrastructure. Therefore, relocating factories to reduce labor costs is not a wise choice; upgrading to automated production with robots is a more practical solution.

　 　2. Mexico High-Speed Rail Incident: A Rough Start for High-Speed Rail Going Abroad

　　In the early hours of November 4, 2014, Beijing time, Mexico's Ministry of Communications and Transportation announced that a consortium consisting of China Railway Construction Corporation, CSR Corporation Limited, and four local Mexican companies won the bid for the Mexico City to Queretaro high-speed rail project, with a contract value of approximately 27.016 billion RMB. The railway is 210 kilometers long and is the first 300 km/h high-speed rail project undertaken overseas by Chinese companies. CSR was responsible for supplying high-speed trains worth 5.448 billion Mexican pesos (about 2.497 billion RMB), accounting for about 2.55% of the company's 2013 revenue. China Railway Construction Corporation held a 60% share in the construction part, about 30 billion Mexican pesos, and 100% of the operation and maintenance services, about 8.96 billion Mexican pesos.

　　However, surprisingly, around November 7, Mexico's Minister of Transportation Gerardo Ruiz Esparza told Mexico's Televisa TV that President Enrique Peña Nieto had canceled the November 3 bidding results and decided to restart the bidding process. Despite the twists and turns, industry insiders believe the Mexico high-speed rail incident marks the true "going global" of China's high-speed rail.

　　Commentary: With increased national support, China's high-speed rail has entered a rapid development phase, from technology introduction to achieving 100% domestically made core technologies. China's high-speed rail industry has gained great fame. Now, with successful overseas projects competing with European giants and receiving large overseas orders, it shows that China's high-speed rail has become a strong global player.

　 　3. Malaysia Airlines Incident: Gains and Losses of Automation Control

　　On March 8, 2014, a Malaysia Airlines flight from Kuala Lumpur to Beijing went missing, and the exact cause remains unclear. Also, on July 17, Malaysia Airlines flight MH17 from Amsterdam to Kuala Lumpur crashed in eastern Ukraine, killing all 298 people on board. These two Malaysia Airlines incidents attracted global attention and are no longer just aviation accidents; they involve automation, intelligent transportation, 3D printing, and other industry knowledge, prompting reflection among industrial control professionals.

　　Looking at industrial control hot topics from the Malaysia Airlines missing flight incident, the main points are:

　　First, avoid over-reliance on automation technology. Automation control technology is deeply applied in all areas of aviation. However, with increasing automated systems, pilot manual operation experience should still be valued.

　　Second, satellite sensors assist in locating MH370. European and North American teams have begun developing systems to more accurately mark the plane's position and map its flight path. Although the plane's automatic signals can indicate its location, these signals can be cut off, which may have happened with the Malaysia Airlines plane. New satellite sensors can aid search and rescue efforts and help airlines save fuel.

　　Third, countries deploy underwater robots to search for black boxes. After Chinese and Australian ships detected pulse signals from the seabed, the exact location and whether these signals came from MH370's black box became the focus of the search. Additionally, China dispatched the naval Yongxing Island ocean rescue ship to participate in the search. The ship carries 48 divers, 25 technicians, multiple deep and shallow diving suits, light diving suits, underwater robots, sonar scanning equipment, and advanced medical devices such as respirators, ultrasound, and ECG monitors.

　 　4. Kunshan Explosion: Unmanned Factories are the Trend

　　On August 2, 2014, an explosion occurred at Jiangsu Kunshan Zhongrong Metal Products Co., Ltd., resulting in 71 deaths and 186 injured receiving hospital treatment. The cause was excessive dust concentration in the factory workshop, which ignited upon contact with a fire source. The Kunshan "8.2" explosion is a painful lesson highlighting inadequate factory safety supervision. If machines replaced manual labor to create unmanned, intelligent factories, would casualties be reduced when accidents occur? The answer is obvious.

　　The "8.2" explosion has prompted reflection on manufacturing transformation. Labor-intensive production has been a major advantage for China's manufacturing development. Previously, China earned the title "world's factory" due to abundant cheap labor. Although in recent years, with declining demographic dividends, many companies have shifted factories to Southeast Asian countries like Vietnam and Thailand with lower labor costs, most small and medium enterprises still rely on cheap labor in their workshops. With the advent of the robot era, this pattern will eventually be broken.

　　Robots can replace workers in hazardous environments, especially in the metal processing and manufacturing industry. Whether light metals, non-ferrous metals, precious metals, special metals, or steel, the metal industry depends on foundries and steel/metal processing. Without automation and multi-shift operations, it is impossible to ensure economic efficiency, competitiveness, and reduce employees' heavy workloads.

　 　5. Haier Layoff Incident: Growing Pains of Manufacturing Transformation

　　On June 13, 2014, at the Wharton School Global Forum, Zhang Ruimin made a startling statement: "Last year, we laid off 16,000 employees; this year, Haier will continue to make bold cuts, laying off 10,000 employees, mainly middle managers."

　　Haier Group's innovative transformation of integrating individuals and units has entered a deep phase. On June 27, Haier Group CEO Zhang Ruimin used a metaphor in a speech: "If an egg is broken from the outside, it is food for people; if it is broken from the inside, it must be new life," which was a response to recent social discussions about Haier's mass layoffs.

　　From the perspective of Haier's senior management, the current employee adjustments are an inevitable result of innovation and transformation.

　　Internal data shows that since 2007, Haier Group has launched the win-win model of integrating individuals and units, improving per capita efficiency and employee income through business model transformation, management optimization, and intelligent manufacturing upgrades. Haier is upgrading traditional manufacturing with intelligence and deploying industrial robots. For example, a workshop for Haier drum washing machines has been upgraded to intelligent production, reducing the workforce from 45 to "unmanned production."

　 　6. Merger of China South Locomotive & Rolling Stock Corporation and China North Locomotive & Rolling Stock Corporation

　　On October 27, 2014, China South Locomotive & Rolling Stock Corporation, China North Locomotive & Rolling Stock Corporation, and South Locomotive's listed company Times New Material announced stock suspension due to undisclosed important matters. The market generally believed the suspension was related to a top-level directive for the two companies to merge and reorganize.

　　As early as September this year, there were reports that the State-owned Assets Supervision and Administration Commission was pushing for the reintegration of China South and North Locomotive & Rolling Stock Corporations into one company to better export China's high-speed rail technology overseas.

　　Regarding the real reason for the integration, insiders close to the process said that price-cutting competition between the two companies might have been a trigger but was not the main reason. The relevant parties hoped that the integration would further enhance the overall competitiveness of China's rail transit equipment industry and that high-end manufacturing like high-speed trains would have a radiation effect, driving overall improvements in China's core technologies in electronics, electrical engineering, materials, and machinery.

　　Commentary: Under China's strategy to transform from a manufacturing giant to a manufacturing powerhouse, high-speed rail, as a leader in high-end equipment manufacturing, benefits from the integration of the two companies by avoiding mutual price-cutting competition and forming a united front internationally. However, the end of the era of two giants will create a monopoly era. Regardless of which company dominates, downstream customers will feel uneasy.

　 　7. Siemens and General Electric Compete to Acquire Alstom

　　On May 27, 2014, Siemens announced a formal acquisition request for Alstom's power equipment business, with a takeover offer to be issued by June 16 at the latest. Just four days earlier, GE had extended the deadline for its $16.9 billion acquisition of Alstom's energy business to June 23 to gain more time to persuade the French government. On June 16, Siemens announced it would jointly submit a €7 billion acquisition proposal with Japan's Mitsubishi Heavy Industries to compete for French company Alstom. On June 21, Alstom's board officially accepted GE's revised takeover offer for its power equipment business.

　　At the same time, the French government unexpectedly announced on Friday that it would acquire 20% of Alstom's shares, becoming the largest shareholder and a key partner of GE in the three joint ventures to be established. The French government will purchase 20% of Alstom's shares from its current largest shareholder, the French Bouygues Group, which represents most of Bouygues' holdings in Alstom. Thus, the more than two-month-long Alstom acquisition saga officially ended.

　　Commentary: French Alstom is a major global company in power generation and transmission equipment, trains, and railway infrastructure, and also the manufacturer of France's high-speed trains. The competition between Siemens and GE to acquire Alstom involves not only business rivalry but also a contest of national strengths, especially between Germany and France, both central European countries. The domestic "Franco-German balance" sentiment in France was one of the main reasons for Siemens' failed bid.

　 　8. Russian Hackers Breach Industrial Control Systems, Attacking Over a Thousand Energy Companies

　　In mid to late July 2014, security researchers discovered a malware similar to Stuxnet called Havex, which is designed to infect SCADA industrial control systems. This malware could potentially shut down hydroelectric dams, overload nuclear power plants, or even shut down a country's power grid with the press of a button.

　　A security company reported that recently a Russian hacker group called Energetic Bear has used a sophisticated cyber weapon to damage over 1,000 energy companies in Europe and North America. Similar to Stuxnet, this weapon allows hackers to access control systems in the energy sector. The group, also known as "Dragonfly," has been active since at least 2011 and has used phishing sites and trojans since 2013 to attack energy suppliers in the US and other countries.

　　The report describes hackers secretly installing malware on computers at power plants, grid operators, natural gas pipeline companies, and industrial equipment manufacturers. Most targets are in the US and Spain, with others in Europe. The malware is used to steal files, usernames, and passwords. In the best case, hackers obtain valuable and sensitive information; in the worst case, they gain control capabilities or even disrupt national energy supplies. The motivation behind these attacks appears to be commercial intelligence. Considering the importance of Russia's oil and gas industry, this is a natural conclusion.

　　Commentary: Industrial control systems are widely used in metallurgy, power, petrochemicals, nuclear energy, and other industrial production fields, as well as in public services such as aviation, railways, highways, and subways. They are the "nerve center" of critical national production facilities and infrastructure. Once the "nerve center" is compromised, the entire national economy could suffer severe damage or even paralysis.

　 　9. Massive Strike at Foxconn's Brazil Factory

　　On September 18, 2014, foreign media reported that over 3,700 employees at Foxconn's largest factory in Brazil were on strike to demand higher wages and better working conditions. The strike began on September 11 and directly affected the shipment of new iPhone 6 and iPhone 6 Plus models.

　　Reports indicate that the workers want the company to provide a new salary and work plan. Their wages have not improved since 2012. Although the company proposed an adjustment plan and remedial measures within two weeks, the factory workers rejected the proposal.

　　This was not the first strike at the factory. In February 2013, workers also held a large-scale strike for similar reasons, demanding improved employee treatment within a specified timeframe.

　　Commentary: The strike reflects the challenges of upgrading traditional manufacturing. The internet era has fostered economic development and a new generation of workers with distinct personalities. Under new circumstances, traditional management methods are no longer suitable. The trend is to replace manual labor with machines, reduce personnel needs, minimize simple repetitive tasks, and substitute physical labor with mental work.

　 　10. Labor Disputes Triggered by "Machine Replacement" in Zhejiang

　　In mid-June 2014, a labor dispute caused by "machine replacement" occurred in Tiantai County, Zhejiang.

　　The incident originated from the company's introduction of a set of high-tech equipment, intending to lay off more than 50 employees. Over more than four years since its establishment, Xinwei Company had been continuously expanding and recruiting. Seeking greater development, in December last year, the management decided to introduce advanced equipment and processes to improve production efficiency and product quality, and decided to lay off more than 50 employees at once, nearly one-third of the total workforce.

　　Such a large-scale layoff caused emotional reactions among some employees listed for dismissal. A few employees resisted the layoffs and adopted uncooperative attitudes, affecting the company's normal production. The management adopted a phased solution. They found new positions for 20 laid-off employees in the largest local enterprise. However, the remaining employees had differing opinions and showed distrust towards the company. Through negotiation, the company finally understood its responsibilities and paid over 500,000 yuan in various compensations to the laid-off employees.

　　Commentary: The advantages brought by "machine replacement," such as efficient production, reduced defect rates, and lower labor costs, make manufacturing enterprises more competitive in the market. However, there are many issues, primarily who to replace and where the replaced employees will go. If these problems are not properly resolved, they can easily lead to conflicts and disputes.

　　2014 is considered the inaugural year of China's robotics industry. While the domestic robotics industry is booming, the replacement of workers by machines is continuously advancing, promoting the development of industrial automation in China. Although "machine replacement" can reduce labor costs to some extent, improper handling can easily cause conflicts. How should the industrial automation industry proceed in 2015? It still needs to address two questions well: which workers should be replaced by machines? Where can the replaced workers go? Once these two issues are resolved, the path of industrial automation will become smoother.