Are you developing in Agile methodology?
If you do how the automation is taking part in the iteration?
How the automation development is happening?
How does it impact the interaction between dev & QA?
If it has a complex functionality that needs testing with a bunch of different data combinations, we will make the effort to automate during the sprint. If it's more UI centered and needs more browser compatibility/look and feel testing then we'd devote more resources to that and push automation to the end of a sprint for regression purposes.
Automation is very valuable as you move from sprint to sprint, ideally getting a continuous integration setup going. However, the same "to automate or not to automate" return on investment evaluation still has to occur given limited resources. Can't spend most of your limited testing time in a typical 2 week sprint just repairing/updating scripts that get put out of whack with a new release.
My view is AGILE best fits with new projects. The transition from traditional to AGILE with mature projects is very stress full and I,m currently going through this.
We plan for 2 week sprints and test automation is a big challenge. It becomes more worst if there is lack of resources. Testing sprint items and automating and maintain g test suits/ frameworks is a toguh task.
My view is though it is AGILE..better to have test automation team by its own as robustness is the key factor in test automation and business need results at end of the day.