That's argument is a bit rough given manufacturing is one of the areas seeing the most automation progress and success. One of the main reason it's not more successful is labor costs can be lower than automation that wouldn't be true if we wanted to replace the income of white collar workers in the US.

If we end up in a place where AI and automation take over then yeah I think we start looking at alternative income sources and economic system. Just like star trek predicted we would do after WW3.