A recent study by Deloitte LLP and the Manufacturing Institute states: “For years, manufacturers have reported a significant gap between the talent they need and what they can actually find. [In fact] 67 percent of manufacturers reported that moderate to severe shortages of available, qualified workers exist, and 56 percent anticipate that these shortages will only grow worse in the next three to five years.”  The workers hardest to find are machinists, tool makers, mold makers, and other craft workers and technicians.
This is really old news, and we have been talking about the skilled labor problem for years. This is the fifth skills gap survey published by these organizations since 1990, and all show similar results, but, very few people who talk about this problem ever say exactly what skills are needed. The reason this is hard to define is that manufacturing covers a huge number of industries, industrial products, and types of manufacturing.
Six million people have been laid off from manufacturing jobs since 2001, and still 5 percent of all manufacturing jobs (60,000 jobs) remain unfilled. The manufacturers don’t want to hire back the low-skilled people; they want multi-skilled people who can do a wide variety of jobs. Due to automation and the changing nature of manufacturing work, I will make the case that the skills we need are very similar to the skills one receives in a long-term or apprentice-style program.
Penn United Technologies is a mid-size manufacturer located in Western PA that specializes in precision metal manufacturing. Jim Ferguson, director of training, explains that in 1997 they were doing most of their training through local vocational technology centers, but the training did not cover all of the skills needed for their type of manufacturing. They decided that they would invest in their own training and, designed the Learning Institute for the Growth of High Technology (LIGHT).
The institute is a 17,000 square-foot manufacturing training center located on the main campus of Penn United Technologies. There are three classrooms and four labs inside, equipped with the most up-to-date manufacturing machinery and state-of-the-art equipment so they can provide customized manufacturing training for both external customers and their internal employees.
LIGHT’s main mission is to assess, design, and develop manufacturing training programs to meet the needs of their customers and employees. The institute offers short-term training, long-term apprentice programs, tuition reimbursement for college courses, and customized training.
Their short-term training is a roster of 25 courses, and a growing selection of metalworking seminars and workshops. This training covers everything from 5-S and introduction to machining, to CNC programming and manual machining.
Their long-term training for employees includes four apprenticeship programs approved by the Pennsylvania Bureau of Apprenticeship Training (BAT), as well as three inter-company programs.
Bureau of Apprenticeship Training Approved
- Toolmaker - 5 years.
- Precision Machinist - 4 years.
- Press Technician - 3 years.
- Quality Assurance Technician - 3 years.
Internal Apprenticeship Programs
- Plating Technician - 3 years.
- Carbide Finish Grinder - 4 years.
- Carbide Preformer - 3 years.
Their employee training also includes tuition reimbursement to foster the professional development of their employees through their successful completion of studies in higher education, such as accounting, engineering, and business management, and the pursuit of 2- and 4-year degrees.
In cases where the standard program or course is not specifically what people want, they can customize the training. Their customized manufacturing training center offers tailor-made training through a list of courses, seminars, and workshops.
Penn United’s Light Training Center is a great model for all manufacturers who need the advanced skills of real journeyman. They recognize that to produce world-class products, they must offer world class training.
MAG IAS, LLC
Another good example is MAG IAS, an American based manufacturer of machine tools with plants in Germany and the U.S. I have always been a big fan of the German training model for manufacturing, because I believe it is the key to why German manufacturing is 21 percent of their GDP, while American manufacturing has slipped from 23 to 11 percent of GDP. MAG’s U.S. operations uses a system with similarities to the German training model, because the “amount of OJT and the special individual attention given to each apprentice by senior level master technicians match the hands on German philosophy.
MAG offers apprentice training, engineering co-ops, and internship programs. The company recognized the problem of retiring baby boomers and the impact it would have on their production systems and most importantly on their skilled trades. They reintroduced the apprenticeship program, which at one time had been common place in the machine tool industry, to their skilled trade workers.
The apprentices are full-time employees of the company. They receive wages and benefits, and the company pays for their education and training. Two of the apprentice programs (The Run-Off Technician and Electrical Technician) take 8,000 hours of OJT, combined with night classes to complete and they receive a Manufacturing Engineering Technology or Electrical Technology Associate’s degree.
The Master Assembler position is 6,000 hours of OJT, combined with the MET Associate’s degree. The Associate’s degree is typically earned in 3 ½ years. MAG’s Hebron, KY operation, partners with Gateway Community and Technical College to do much of the class work. Their other U.S. facilities partner locally in a similar manner with other schools.
Their apprenticeship program in Hebron is registered with the Kentucky Department of Labor division of employment standards, apprenticeship and training in cooperation with the U.S. Department of Labor Bureau of Apprenticeship and Training. In addition, it is registered as part of the national apprenticeship program in accordance with the basic standards of apprenticeship established by the Secretary of Labor.
A key issue in advanced training that will produce the multi-skilled people we need in manufacturing, is the skill called troubleshooting. The media talks about advanced skills, problem solving, knowledge of computers, and programming, but they never tie these general problems to advanced skills. To maintain, repair, and operate today’s machine tools and packaging equipment takes excellent troubleshooting skills, and I think that people acquire these kinds of skills through apprentice training.
In an Industry Week article, the President of MAG Global Services, Bill Horworth, made a point on the usefulness of apprentice programs on troubleshooting skills. He says, “To troubleshoot the product and understand why it is doing what it is doing takes a lot of skill and experience, which you don’t learn those in the classroom.”
Mark Logan, VP of Marketing for MAG agrees that troubleshooting is important and requires advanced skills. He says, “When it comes to diagnosing and repairing sophisticated machinery and equipment, we are dealing with a very broad skill-set ranging from precision mechanical components, electronic and electro-mechanical systems, plus computer and software programming. All of these functions interact with one another under varying operating conditions in factories around the world. As a result, classroom and theoretical training must be combined with practical, on-site experience along with mentoring by seasoned professionals. One of our most acute needs is for customer support technicians with proven on-the-job skills.”
MAG’s internship programs are student trainee positions for people who are finishing high school, college, or a master’s degree. The internships are currently being used for engineering students and students seeking an associate’s degree. Interns receive an hourly wage and usually work 40 hours a week. In some cases interns travel with the field service group and will work overtime. The externship is a lesser program non-paid but designed to give pre-apprentice applicants hands on experience.
I am particularly impressed by the company’s promotion of their manufacturing jobs as a career. Younger people are very wary of taking a job in an American manufacturing company because of off-shoring, plant closures and little commitment to the employee for training or a future. MAG describes future jobs in their company as a career, which means that they are envisioning a longer term arrangement and will help the new employee describe a career path while providing the necessary training and education to be successful.
Mark Logan says, “We developed and expanded our apprenticeship and other programs out of necessity. We need a pipeline of talent to backfill for current and upcoming retirements, and also to support our global expansion and need for future leaders. Our competitors face the same challenges. It is important that people in our training programs know their potential path and are motivated to have their training develop into a long-term career opportunity; for example, we currently have two of the graduated apprentices using tuition assistance towards a Bachelor’s degree.”
Since 2000 about 6 million people have lost their jobs in manufacturing, yet The Wall Street Journal and other major newspapers say that manufacturers don’t want these people back – they want people with advanced skills who are problem solvers, multi-skilled, and good trouble shooters. I suggest that these kinds of people will only be available by investing in long-term training that can eventually attain some kind of journeyman status.
The training programs described in this article and used by Penn United and MAG IA, are good examples of what needs to be done in this country to meet the requirements of advanced training. Both of these companies offer apprentice training, short-term training, tuition reimbursement, customized training, and skill certificates. These are comprehensive programs that include long-term training and investment. Both companies also describe their manufacturing jobs as career opportunities and are willing to make long-term commitments to the employees.
At the same time, it is clear that most Fortune 500 companies are not investing in these long-term training programs, particularly apprentice training. In a recent article in USA Today, the shift away from extensive training began after the 1980 recession as companies began to find ways to cut more costs.
I also saw this trend as a manager of a division that built automatic machines for the Fortune 500 companies. In the 1970s, many of these companies sponsored apprentice programs and invested in extensive training, but in the 1980s most of the extensive training was dropped and many of the craftsman began to retire. The inadequate skill training immediately resulted in more service problems on our machines because new workers were not able to operate, maintain, and repair our machines. The most obvious service problems occurred during troubleshooting, which by definition takes extensive and advanced training.
According to the U.S. Department of Labor’s Department of Apprentice Training, only about 4 percent of the apprentices in their database are manufacturers. In looking into the apprentice database by states I found very few of the Fortune 500 companies (except for the auto industry) were sponsoring apprentice type training.
If we are going to train the new manufacturing workers to do advanced troubleshooting and have the multi skill ability to do many jobs as a generalist, I believe it will require long term, comprehensive training programs. I suspect that the publicly held companies will continue to view training as an expense rather than an investment. This kind of mindset is very suspicious of training programs that take years to complete, paying people for skills they attain, or issuing certificates to people that make their skills transferable.
We have done enough studies to know what kind of skills and training programs are needed. Companies like Penn United and MAG Industrial Automation have already designed their curriculums and made the investment in facilities. They know what skills are needed and are already training the future manufacturing workers of America.
It is time for the large companies who have the majority of U.S. manufacturing employees, to quit stalling and make the commitment to long-term training. Yes this will probably be and investment of 3 percent of sales, and a commitment to long-term training in years, certificates for skills learned, and recognizing the training as an investment not an expense. We don’t need any more “shortage of skills” surveys, it is time to act.
Mike Collins is the author of "Saving American Manufacturing" and its companion book, the "Growth Planning Handbook for Manufacturers." To learn more about the author or these titles, visit http://www.mpcmgt.com/.
Boiling Point? The skills gap in U.S. manufacturing, Deloitte Consulting LLP, the Manufacturing Institute, August 2011.