Manufacturing

With talk of how hard it is to recruit manufacturing workers, representatives from Honda’s Alabama auto assembly plant took a unique approach to job recruiting. They set-up a tent at the Honda Indy Grand Prix of Alabama. There they showed off rivet guns, precision tools and pistons in pieces for assembly, and they invited visitors to try them out by asking, "How fast can you torque an engine?" The idea was to show visitors what manufacturing is really all about.

Innovate Manufacturing will locate its first U.S. headquarters in Knoxville, Tennessee. Mayor Tim Burchett is pleased with the decision the China-based company has made because they will be investing $4.7 million in building upgrades and renovations as well as creating 50 new jobs in Knox County.

Charleston Harbor is earning a new name as the deepest port on the East Coast, which will send ripple effects throughout South Carolina's manufacturing community. Secretary of Commerce Bobby Hitt said South Carolina has a variety of sectors dependent on this port including automotive, power-generation manufacturing, and distribution centers.

Trelleborg Wheel Systems is building a new production plant in Spartanburg County. The plant has already hired 52 employees, with 100 more to be hired by 2018. Most of these positions will be filled by local residents.

Manufacturing jobs have quickly become high-tech and high-paying, making them more attractive to a growing number of people. Tennessee is the number one state for auto manufacturing in the Southeast. With Knoxville being at the center of a number of surrounding auto assembly plants, this has resulted in 13,152 manufacturing jobs in the area.

A panel of manufacturing experts gathered at The Big M conference in Detroit to share their thoughts on the future of US manufacturing. Adrian Price, Director of the Global Manufacturing Business Office at Ford shared that the assembly line is here to stay, but that different techniques will continue to inform the way that we structure future manufacturing systems. Christine Furstoss, Global Technology Director of Manufacturing and Materials Technologies for General Electric discussed the need to create "brilliant factories;" factories that use the latest technologies to optimize operations. And Justin Fishkin, Chief Strategy Office at Local Motors introduced their 'micro-factories' concept that allows them to bring products to market rapidly.

Contrary to popular belief, industrial robots have been a substantial driver of labor productivity and economic growth. Is this positive impact on productivity having a negative impact on jobs? According to recent studies, no:  Robots increase productivity, but there is no visible relationship between the use of robots and the change in manufacturing employment levels. Instead, there is a change in the type of workers. With the arrival of robots, there is a higher demand for skilled workers relative to middle-skill and low-skill workers.

MAPI officials state that 2015 has been a rough year for manufacturing due to the rough winter curbing industrial production. Other negative contributors included falling energy prices, the strong dollar, and high inventory costs. Daniel Meck Stroths, the group's chief economist, predicted that the market will better absorb these shocks in 2016. The forecast expects GDP to increase by 2.4 percent through the remainder of 2015 and by 3 percent next year.

Two million manufacturing jobs are likely to go unfilled in the coming decade due to the skills gap. Not enough young people are filling the holes left by retirees, leaving 6 out of 10 openings unfilled. While many Americans believe manufacturing is vital to our future, many also believe that these jobs are diminishing and the industry doesn’t have the stability to provide a career. On the contrary, manufacturing executives are desperate to increase the skilled workforce and are willing to pay higher salaries than the market rates.

A report by Brookings says that select advanced industries are the future. Advanced industries invest heavily in research and development and employ a large percent of STEM workers. They include manufacturing, energy and services, and many others with jobs like aerospace manufacturing and computer systems design. Jobs available in these industries tend to fall in large metro areas, like Seattle and Austin.

Reshoring is a hot topic in manufacturing. It's good for America. It's good for our future. But, it requires careful planning and execution for success.

 

Government incentives, low-cost real estate and eager communities are attracting companies to reshoring.  However, failure to account for the existing skills of workers in the geographic area can mean disaster for reshoring efforts.

 

New production facilities often bring new types of machinery, which require staffing with workers who are trained to run, maintain, and repair the new technology. Without skilled workers, the production lines remain off.

 

One way to avoid failure -- partner with local community colleges who can train workers in the right skills for the jobs available.  This will take time, but will add to the success of reshoring in the long run.

Between 1990 and 2010, manufacturing jobs were slowly in decline. But over the past 5 years, employment growth in the manufacturing sector has been on the rise.

 

And while growth in Midwest states (Iowa, Minnesota, Illinois, Wisconsin, Indiana, Michigan and Ohio) has outpaced Southeast states (Louisiana, Mississippi, Alabama, Tennessee, Georgia, South Carolina and North Carolina), the overall picture of job growth in both regions is positive news.

In November of 2014, NPR explored the changing face of American manufacturing with Planet Money's Adam Davidson, who commented, "You need continuous improvement in your education. The main skill you need is the skill to learn more skills. The one certainty we have is manufacturing is going to look more and more like computer programming and engineering. It's going to involve a lot more brainwork and a lot less brawn work."

 

His comments reflect that the face of manufacturing has changed, and is continuing to change. In the future, the pool of workers is expected to be smaller. And if workers want to succeed, they'll need continuous improvement with on-the-job education.  Many employers today, recognizing this, are partnering with local community colleges to design and offer certificate and degree programs that address their evolving labor needs.

In December, President Obama announced more than $290 million in public-private investment for two new Manufacturing Innovation Hub Competitions. Both competitions will look for new public-private manufacturing innovation institutes; one focused on flexible hybrid electronics, and the other on smart manufacturing.

 

The President also announced $100 million to expand apprenticeships for American workers - a proven training strategy for workers to learn the skills that employers need for American business to grow and thrive in a competitive global environment.

 

The Department of Labor competition will use $100 million or more of H-1B funds to award approximately 25 grants to partnerships between employers, labor organizations, community colleges, and other groups that: launch apprenticeship models in new, high-growth fields, align apprenticeships for further learning and career advancement, and scale apprenticeship models that work.

Here are seven suggested New Year’s resolutions for U.S. manufacturers:

 

1. Develop your workforce

2. Educate yourself on emerging technologies

3. Invest in sustainability

4. Optimize your supply chain

5. Try exporting

6. Get certified

7. Embrace lean and continuous improvement

1. SMAC – social, mobile, analytics and cloud – represents the next wave for driving higher customer engagement and growth opportunities.

2. Social media is forcing manufacturers to become more customer-centric.

3. Internet of Things (IoT) will increase automation and job opportunities.

4. Greater capital investment.

5. The emergence of Next-Shoring — developing products closer to where they are sold allows for faster replenishment of store shelves.

The United States has been the leading producer of manufactured goods for more than 100 years, and the manufacturing sector is once again adding jobs and opening new factories at its fastest rate in two decades.

 

Yet, new and growing competition abroad are threatening the U.S.'s strengths in manufacturing innovation and technologies. To minimize these threats, the first Advanced Manufacturing Partnership (AMP) identified strategies to increase U.S. competitiveness for advanced manufacturing.

 

One strategy – upgrading community-college workforce training programs and deploying the talent of returning veterans to meet critical manufacturing skills needs – aims to connect more Americans with skills for successful careers in manufacturing.

Last year in the U.S., 39% of employers reported difficulty filling jobs due to lack of available talent, a "skills gap". This issue has become controversial because people mean different things by "skills gap." Some public officials have sought to blame persistent unemployment on technical skill shortages. Today’s unemployment is largely a cyclical matter, caused by the recession and best addressed by macroeconomic policy. Yet although skills are not a major contributor to today’s unemployment, the longer-term issue of worker skills is important both for managers and for policy.

 

Although it is difficult for workers and employers to keep up with emerging technologies, this difficulty creates opportunity. Those workers who acquire the latest technical skills earn good pay; those employers who hire the right workers and train them well can realize the competitive advantages that come with new information technologies.

Career opportunities include engineers, designers, machinists, and computer programmers among others.  The annual average salary of entry-level manufacturing engineers is nearly $60,000.  The annual average salary of manufacturing workers is more than $77,000.

The manufacturing sector has added more than 700,000 jobs over the last four-and-a-half years and is growing at twice the rate of GDP.  Manufacturing career opportunities include engineers, designers, machinists, computer programmers among others.  The annual average salary of entry-level manufacturing engineers is nearly $60,000, with an annual average salary of manufacturing workers is more than $77,000.

In August, General Motors (GM) announced it was moving production of the Cadillac SRX from Mexico to Spring Hill, TN. This move means a $185 million investment in the Spring Hill engine factory, plus the creation or retention of 1,800 jobs.

New National Skills Coalition (NSC) fact sheets show strong demand for middle-skill jobs in the 50 states and DC. Middle-skill jobs, which require education beyond high school but not a four-year degree, make up the largest part of the labor market in the United States. However, less than half of the country's workers are trained to the middle-skill level.

 

As the fact sheets show, this skill gap keeps states' economies from growing and employers from hiring. States can close their middle-skill gaps by:

* adopting policies that support sector partnerships and career pathways,

* making job-driven investments,

* directing policymakers to better align workforce and education investments with employer skill needs, and

* working with NSC to promote these strategies for change.

Dorchester County, South Carolina:  Innovative Machining Technology Inc. is opening a new manufacturing facility in Dorchester County. The $7.8 million investment is expected to create 45 new jobs, with hiring beginning in late 2014.

In September, the House of Representatives passed H.R. 2996, the Revitalize American Manufacturing and Innovation Act (RAMI).  H.R. 2996 directs the Secretary of Commerce to support the establishment of institutes across the country dedicated to improving U.S. competitiveness in manufacturing, increasing domestic production and accelerating the development of an advanced manufacturing workforce.

In the U.S., manufacturing jobs have shifted to certificate, credential, and degree bearing labor fields; computers, robots, and automotive equipment are at the forefront. The lowest rung labor jobs have lost out to equipment, software, and technology. Affordable competency-based education are now necessary to get a foot in the door.

Toyota Motor Corp. says it's expanding its technical center in Michigan and moving 250 jobs from Kentucky.

For more than 10 years, Toyota's Huntsville, Alabama engine plant has kept manufacturing waste out of a landfill using a 3Rs approach -- Reduce, Reuse, Recycle.

"Aligning Education with Employer Needs"

Multi-State Advanced Manufacturing Consortium (M-SAMC)

5101 Evergreen Road, Dearborn, MI 48128

Creative Commons License
Unless otherwise noted this M-SAMC Website is licensed under a Creative Commons Attribution 4.0 International License.

This workforce solution was funded by a grant awarded by the U.S. Department of Labor’s Employment and Training Administration. The solution was created by the grantee and does not necessarily reflect the official position of the U.S. Department of Labor. The Department of Labor makes no guarantees, warranties, or assurances of any kind, express or implied, with respect to such information, including any information on linked sites and including, but not limited to, accuracy of the information or its completeness, timeliness, usefulness, adequacy, continued availability, or ownership.

*AMTEC is supported entirely by a National Science Foundation (NSF) Advanced Technology Education (ATE) Program Grant (0903193). (AMTEC,NSF ATE DUE-0903193)