By Daniel Ebrahimpour

Edited by Kyrylo Khutornyi

By 2030, AI and automation are expected to boost global GDP by 14%, adding $15.7 trillion in economic productivity. But behind that economic growth, millions of jobs, especially in manufacturing, are disappearing. Goldman Sachs estimates that up to 300 million full-time jobs could be affected by automation, and factory floors, steel plants, and assembly lines are feeling the impact first.

For decades, manufacturing jobs have provided stable careers for high school-educated, middle-aged workers. Many of them have built lives around their work, and rely on these industries for long-term employment. Unlike past industrial revolutions, where initial fears of technological displacement eventually gave way to the emergence of new industries and professions, the rise of AI and robotics presents a uniquely challenging scenario. While historically technology created opportunities alongside the jobs it replaced, AI and robotics today are rapidly displacing roles without always offering immediate or accessible alternatives. This difference matters significantly for workers with limited options to reskill.

For example, Volkswagen recently announced plans to eliminate 35,000 positions as it restructures operations and invests in automation. Across the sector, auto manufacturers are deploying robotic assembly lines and AI-driven quality control systems, drastically reducing the need for human workers. The steel industry is seeing the same shift. AI-powered inspection systems now monitor production in real time, replacing manual quality control jobs. Companies are also using AI to optimize inventory and processing, meaning fewer people are needed to oversee operations.

These jobs aren’t coming back, and governments have no real plan to help those losing them. With many manufacturing workers lacking college degrees and deep into their careers, entire communities risk being left without work or options. The rigid skill sets of these jobs only further limit worker mobility in today’s economy. The question arises. What happens to these workers?

AI & Robotics: Transforming Manufacturing at an Accelerating Pace

The combination of advanced robotics and AI systems is rapidly changing the manufacturing landscape. Companies are actively deploying AI-powered robots to handle complex tasks with increasing efficiency. These robots don’t require higher wages, vacations, or union memberships. This makes them a highly attractive solution for industries facing labor shortages and rising costs. As AI capabilities improve, the pace of adoption is only accelerating.

Amazon, for example, has begun integrating Digit, a humanoid robot, into its warehouses late last year. These robots can operate for eight hours without interruption, work at 75% of human speed, and achieve a 97% success rate even when performing tasks they weren’t originally programmed for thanks to AI systems. Their operating costs currently range from $10 to $12 per hour, but Amazon expects this to drop to $2 to $3 per hour as production scales.

BMW is quickly following suit by implementing humanoid robots known as FIGURE 02 at its South Carolina factory where they have successfully completed automotive assembly tasks traditionally handled by human workers. Meanwhile, Standard Bots, a New York-based company, is leveraging AI and large language models (LLMs) like ChatGPT to enable its robots to learn tasks and adapt to their environments in real time.

This trend is only accelerating, with a McKinsey report revealing that 54% of manufacturing companies are now pursuing Original Equipment Manufacturers partnerships to standardize industrial Internet of Things (IoT) platforms, an eightfold increase since 2019. The majority of manufacturers now view digital solutions and AI as key components of their automation strategies.

The Potential Impact of AI Restructuring in Canada

With over 800,000 manufacturing workers in Ontario alone, the potential disruption from AI restructuring is massive.

Steel: 23,000 workers plus 100,000 indirect jobs.
Automotive: 125,000 direct workers, supporting 371,400 additional jobs.
Truck Drivers: 320,000 drivers nationwide.
Oil & Gas: 140,000 direct workers, indirectly supporting 900,000 jobs.

Reskilling vs. Reality: Can Workers Keep Up with AI?

A common criticism of these concerns is that AI will create millions of new jobs, and that workers can simply reskill into them. But how do you retrain a 40- or 50-year-old factory worker for an AI-driven economy—one that may force workers to reinvent themselves every 10 to 15 years due to the breakneck speed of technological progress?

Kai-Fu Lee, a Chinese AI expert, argues in his book AI Superpowers: China, Silicon Valley, and the New World Order that within 15 years, AI could replace 40–50% of all jobs in the U.S. If that projection holds, the scale of disruption will be unprecedented.

Furthermore, the jobs AI is expected to create are highly specialized and technical, requiring years of education and training. Roles such as AI model and prompt engineers, data curators, AI trainers and ethics and governance specialists demand skill sets that most displaced manufacturing workers simply do not have, and may not have the time or resources to acquire.

Next Steps?

There is no clear solution to AI-driven job displacement—and that’s the problem. Governments, businesses, and policymakers must start developing real, workable strategies now, rather than scrambling to react once the crisis fully unfolds.

Create national and industry-specific task forces involving representatives from impacted industries, academia, and government agencies to accurately measure the extent of AI-driven disruptions and outline clear sector-specific transition strategies.
Implement targeted economic policies and social safety nets, such as unemployment benefits specifically designed for workers displaced by automation and sector-specific retraining grants to ensure immediate and practical support for affected workers.
Revise educational policies and workforce development programs by integrating robust digital skills training and lifelong learning initiatives into national curricula, clearly emphasizing long-term adaptability and resilience rather than short-term fixes.

Without urgent action AI will continue to outpace our ability to adapt, deepening inequality and economic instability. The challenge is massive but ignoring it isn’t an option.

The Future of Blue-Collar Work: AI, Automation, and the Urgent Need for Policy Action