Interviews

CaliBurger chain rolls out burger-flipping robot

CEO John Miller discusses moving towards automation

 

This is a rush transcript from "Your World," March 10, 2017. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

NEIL CAVUTO, HOST:  People read into that, Andy, that what he's saying is this is yet another reason not to double the minimum wage, because you're all but enticing guys like me to use machines to replace workers, who certainly don't deserve 15 bucks an hour.  

ANDREW PUZDER, PRESIDENT & CEO, CKE RESTAURANTS:  Well, and, in part, that was true.  What my position on the minimum wage...

CAVUTO:  What was true, that sentiment or the way that...

PUZDER:  No, the fact, if you increase the minimum wage, it will incentivize people to automate.  

(END VIDEO CLIP)

TRISH REGAN, GUEST HOST:  And it's already happening.  

President Trump's former labor secretary nominee, Andy Puzder, didn't flip over mandated wage hikes, so labor groups, they didn't flip over him.  Or they might have flipped out over him and were instrumental in making sure he didn't get the gig.  

But was he right about automation pushing jobs out as wages go up?  One chain called CaliBurger is introducing this burger-flipping robot behind the counter.  

The CEO, John Miller, is here, and he is going to tell us why.  

Welcome, John.  Good to have you.  

JOHN MILLER, FOUNDER & CEO, CALIBURGER:  Thank you.  

REGAN:  Appropriate timing on jobs day to be talking about robot technology replacing workers.

But this is something that Andy repeatedly warned against.  What is behind this?  

MILLER:  For us, it's as much about turnover as it is anything else.  So, for whatever reason right now, millennials that we hire don't tend to stay very long.  So, they come in, we train them, they work for a while.  Then they go drive an Uber or go home to play competitive video games.  

So the cost of that turnover on our business is tremendous.  And so to the extent we can automate certain tasks in the kitchen, and the most dull, dangerous and dirty ones, and allow robots to work side by side humans, and reduce the amount we have to spend on training and retraining, that's our primary focus.  

REGAN:  What does it cost to buy one of these robots?  

MILLER:  Right now, they cost about $30,000 U.S.  But that cost is declining dramatically as the hardware becomes commoditized and you see increase in using of robots.  

REGAN:  So, realistically, in a couple of years, what would a robot like this cost if it catches on?  

MILLER:  We expect about $10,000 U.S.  

REGAN:  So, if you have an opportunity to buy a robot for $10,000 or employ a worker for more than that, and deal with all the headaches associated with employing workers, what are you going to opt for?  

MILLER:  Yes.

It's not just the headaches.  It's also the safety of the food, right? Robots don't spit in food or contaminate food.  It's consistency, quality. There's lots of benefits.  

And our view is that, with CaliBurger, we have built an interactive social experience in the dining room.  And so our feeling is that people would be better off, our staff will be happier actually interacting with the guests, doing this on -- we have video walls in the restaurants, where people play games together.  

So, our idea is, we would like to actually take our workers, redeploy them, and leverage their strengths, a human strength, which is social interaction, and not doing these repetitive, dull, dirty and dangerous tasks in the kitchen.  

REGAN:  That's interesting.

Now, I have read that the robots themselves have the ability to sort of self-correct.  In other words, if it screws up making one burger, it will remember that and change the next time?

MILLER:  Right.  

So, this is the burgeoning area of machine learning and artificial intelligence.  Right?  So, just like self-driving cars over time learn from things that happen and the system becomes smarter, we use the same types of technologies, machine vision, machine learning, so that the robot can learn from itself, get better and better and more consistent, and even take what it's learning from the grill, making burgers, and apply that to other types of...

REGAN:  Neat.

So, you know, part of the reason why this is such an issue right now is, of course, because you have people pushing for this federally mandated minimum wage.  And they want it to go higher and higher, it seems, at every turn. Businesses are saying, no, this is going to put me out.  

MILLER:  Yes.  

REGAN:  What do you think of it?  Do you want to see a federally mandated minimum wage hike?  

MILLER:  That is not good for our business.  Right?  So, but...

REGAN:  You would rather have a robot than deal with higher wages on workers?  

MILLER:  Yes, we think of it, again, as a cobotic situation, so robots good at certain things, humans good at certain things.  

But, certainly, the restaurant industry is under attack in this country, right?  We run a global business that operates in 12 different countries. And so we're consistently looking at the P&Ls of our global business.  And our free cash flow is much greater in other regions of the world, where labor cost is not as high.  

And with some things going on in the real estate industry, turnover, rising minimum wage, I do think, increasingly, the restaurant industry and other similar industries will look at automation.  

REGAN:  Well, it's good to have you here.  

MILLER:  Thank you.  

REGAN:  Thank you so much.  Appreciate it.  

MILLER:  Thank you.  

REGAN:  Good luck with it.  All right.  

END

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