Education and Manufacturing

Stephen DeAngelis

December 9, 2013

If you are a regular reader of this blog, you know that I formed a non-profit organization called The Project for STEM Competitiveness with several colleagues of mine. STEM is the acronym for science, technology, engineering, and mathematics. We believe that getting students excited about those subjects is going to be important if the U.S. is going to educate a workforce that remains competitive in the world. The goal of our Project is to help students understand why STEM subjects are important and how those subjects can help them develop the skills they will require to obtain a good job in the future. John McGlade, Chairman, President and CEO of Air Products & Chemicals Inc., reports that at any given time his company has “about 150 skilled-labor jobs [that] are open and unfilled … in the United States.” [“Closing the Manufacturing Skills Gap,” IndustryWeek, by Jill Jusko, 10 May 2013] Jusko reports, “Those unfilled positions represent 38% of the roughly 400 skilled-worker positions Air Products attempts to hire each year for its U.S. workforce, which numbers about 7,500.” She continues:

“Like many U.S. manufacturers, Air Products attributes its talent shortages in part to an aging baby boomer generation who have begun their exodus from the U.S. workforce. The oldest baby boomers turned 65 on Jan. 1, 2011, and every day thereafter for about the next 19 years, some 10,000 more will reach the traditional retirement age, according to the Pew Research Center. But it’s not just the departure of older, seasoned workers that is raising fears of vanishing manufacturing skills in the United States. The specter of knowledge walking out the door with retirees is buttressed by what many perceive as a lack of interest by young people in manufacturing as a career.”

According to Jusko, Pete Selleck, President and Chairman of Michelin North America, told participants at an IndustryWeek-sponsored manufacturing conference, “Very few students in school aspire to work in manufacturing.” For evidence to support his claim, “he pointed to a curriculum development process employed in South Carolina (where the tire manufacturer’s North American headquarters is located), in which students at a certain age begin to identify the career ‘clusters’ that interest them. While STEM ranked third, ‘that’s good news, manufacturing ranked 14th of 16 choices. Not so good.” Jusko continues:

“Between retiring baby boomers and uninterested youth, age clearly is taking its toll on U.S. manufacturing skills. There’s growing evidence, however, that manufacturers have begun identifying age as a potential solution to manufacturing’s talent shortage as well. Indeed, changing the negative perception of manufacturing among youth and their parents has become an integral component of closing the skills gap for a growing number of manufacturers.”

I can add my own testimonial to Jusko’s report. When we decided to establish The Project for STEM Competitiveness, we had no difficulty at all garnering the support of manufacturers in our area. They know that getting students excited about STEM subjects and manufacturing will help them find the skilled employees they will need in the future. Thomas A. Hemphill, Waheeda Lillevik, and Mark J. Perry write, “It is generally acknowledged that there is a shortage of skilled manufacturing workers in the United States, but estimates of the size of the shortage vary widely. At a time when unemployment in the United States remains stubbornly high, and while the U.S. manufacturing sector may be in the early stages of a renaissance, having a shortage of skilled workers is a serious challenge that needs to be addressed.” [“Confronting the U.S. Advanced Manufacturing Skills Gap,” The American, 28 January 2013] They note that a Boston Consulting Group (BCG) study estimated “that the high-skills gap in the United States translates to a shortage of only between 80,000 and 100,000 manufacturing employees, or about 8 percent of the nation’s high-skilled manufacturing labor force of 1.4 million workers. Those estimates differ significantly from other research that suggests a much greater shortage of skilled factory workers.”

 

The skills gap in manufacturing requires both short- and long-term solutions. Hemphill, Lillevik, and Perry believe that part of the short-term solution is getting manufacturers to pay higher wages. They explain:

“In its report, the BCG concludes that U.S. manufacturers are trying to hire high-skilled workers at ‘rock-bottom’ wage rates, and that is not what it would characterize as a ‘skills gap.’ As Adam Davidson asks in his recent New York Times Magazine article ‘Skills Don’t Pay the Bills’: Who wants to operate a highly sophisticated machine for $10 per hour? Answer: not a lot of people. As a result, says Davidson, there really isn’t a skills gap. Rather, it’s the unwillingness of manufacturers to pay higher wages that is causing the skilled worker shortage, which is a view that is consistent with the BCG report.”

Good wages will help encourage workers and students to obtain the right kinds of skills both now and in the future. The amount of education and training that a person requires varies by industry and position. A couple of years ago, New York Times‘ reporter Joe Nocera was given a tour of two new manufacturing plants by the man whose company built them, Stephen Gray, Chief Executive of Gray Construction. [“Factory Field Trip,” 26 September 2011] One of the things that impressed Nocera was that “these plants offer something that has become increasingly rare: middle-class jobs that don’t require a college degree. The jobs pay between $20 and $30 an hour, plus benefits, allowing a skilled machinist to make a decent middle-class living.” Nocera continued:

“The key word, of course, is ‘skilled.’ One reason Siemens and Caterpillar chose North Carolina is that Charlotte and Winston-Salem have community colleges that stress manufacturing skills. In Winston-Salem, Forsyth Tech, a local community college, was involved in wooing Caterpillar and created a program, in cooperation with the company, to make sure its graduates have the machining skills the company needs. Job training was part of the incentives packages that were dangled in front of the companies to lure them to North Carolina.”

Nocera reported that it’s not all good news. These new manufacturing plants are highly automated and don’t require nearly as many employees as industrial age plants required. Nevertheless, Nocera concludes, “Manufacturing is terribly important.” Andrew Liveris, the Chief Executive of Dow Chemical, told Nocera, “More than any other sector, manufacturing creates additional jobs in the supply chain.” Randy Jackson, Vice President of Human Relations and Administration with Kia Motors Manufacturing Georgia, Inc., agrees with Liveris. Jackson helped establish a Kia plant in Georgia that is “nestled within a cluster of educated workers and eager suppliers.” [“Kia: Collaborating On The Southeast’s Automotive Future,” by Joel Hans, Manufacturing.net, 11 November 2013] In addition to the 3000 jobs created at the Kia Plant, Jackson told Hans that the plant was confirming the generally-accepted rule that manufacturing has a “multiplier effect” of nearly five corollary jobs for every one manufacturing job. Kia has “helped create 14,000 jobs directly among suppliers. That doesn’t even count all the other positions necessary to keep a growing community functioning — those working in restaurants, banks, grocery stores and much more.” Jackson also confirmed that an educated and skilled workforce is critical to attract manufacturing. He told Hans “that one of the main reasons that major automakers have clustered in the Southeast is the unique and beneficial characteristics of its workforce. … The need for a good workforce is critical, Jackson says. Only if the available workforce is good can a company even consider locating or expanding in a certain region.” Sustaining that workforce, however, will take both effort and planning.

 

Selleck told Jusko that “Michelin’s efforts to encourage youth to consider a manufacturing career include working to bring teachers and middle school students into its manufacturing plants. The company wants to dispel the notion — still held by many, Selleck notes — that manufacturing plants today remain the dirty, harsh environments they were 50 years ago.” I really like that hands-on approach. Paul Teague also believes that manufacturers “should be making a similar push in their communities, particularly in the local education systems. There is a sound business reason to do that.” [“Talent management extends to the factory floor,” Procurement Leaders, 11 November 2013] Teague insists that manufacturers won’t succeed “without employees possessing the right skills, which primarily tend to be highly technical. Business leaders should be lobbying to get those skills included in public school curricula.”

 

At least some politicians agree that America will only remain competitive if we get students excited about STEM subjects and manufacturing careers. Earlier this year, “Oregon’s Senator Jeff Merkley announced the introduction of the BUILD (Building Understanding, Investment, Learning, and Direction) Career and Technical Education Act of 2013. This new legislation will provide grants to support state efforts to restart career and technical education programs that have been scaled back or eliminated.” [“Merkley introduces legislation to boost career and technical education in K-12 schools,” North Clackamas Chamber of Commerce, 16 July 2013].

 

As a final note, urban areas are often where one finds the most intractable unemployment challenges. To help remedy that, about a year ago, a new Urban Manufacturing Alliance (UMA) was launched. [“Alliance Created to Bring Manufacturing’s Recovery to Urban Areas,” SupplyChainBrain, 26 November 2012] The article continues:

“The UMA is anchored by the Pratt Center for Community Development in New York and SFMade in San Francisco. It will include manufacturing job creation efforts in 16 cities. Funding for the UMA was provided by a $300,000 contribution from Citi Community Development. Exchanging ideas on how urban manufacturing can reduce chronic unemployment and regain its foothold in dense urban areas are key goals of the new alliance. Members will also share best practices and address common challenges.”

One of the reasons that unemployment has been intractable is because urban education systems have failed to produce employable graduates. There are a myriad of reasons for this lack of success; but, without a system that provides students with the knowledge and skills they need, efforts like the UMA are going to have a difficult time achieving their goals. Those of us involved with The Project for STEM Competitiveness are hoping to develop programs that can be adapted to urban school systems and bring the excitement of making things back into the school.