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The Trump Effect

With President Donald Trump promising sweeping reforms intended to boost the number of U.S.-based manufacturing jobs, employers are growing new workers to meet the demand.

Tuesday, April 11, 2017
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Barnstorming the campaign trail in the months leading up to the contentious 2016 presidential campaign, then-candidate Donald Trump hammered home the promise to return offshored manufacturing to the U.S. -- and to stop manufacturers from moving additional operations to other countries. On the heels of his surprise victory, President-Elect Trump took to his favorite communication medium, Twitter, to pressure several major companies, including Carrier, Sprint, Ford, Boeing, Lockheed Martin and GM, to put the brakes on plans to ship jobs overseas or to Mexico.  

In the weeks that followed, Ford announced it would cancel its $1.6-billion plan to build a plant in San Luis Potosi, Mexico, and instead invest $700 million to expand an existing plant in Michigan. The automaker also said it will keep production of some of its small SUVs at a plant in Kentucky. And FCA US, the parent company of Fiat and Chrysler, declared it will spend $1 billion to expand plants in Michigan and Ohio and create 2,000 more jobs in the U.S.

After Trump tweeted criticism of GM for sending a Mexican-made model of the Chevy Cruze to U.S. car dealers, the automaker announced plans to add 1,500 U.S. jobs as part of a $1 billion investment in U.S.-based facilities. Meanwhile, following communication from Trump, Carrier's parent company, United Technologies, proclaimed that several hundred jobs slated to be shipped to Mexico will now remain in Indiana.

Additional planned actions by the Trump administration -- such as withdrawing the U.S. from the controversial Trans-Pacific Partnership; renegotiating the North American Free Trade Agreement; and instituting duties, tariffs and quotas on products crossing into the U.S. from south of the border -- are all intended to create more American manufacturing jobs.

It's all part of the Trump administration's commitment to meeting his campaign promise of bringing good-paying jobs to U.S. shores and supporting American manufacturing, which Trump calls "the backbone of our economy."

"My administration's policies and regulatory reform, tax reform, trade policies will return significant manufacturing jobs to our country," says Trump. "Everything's going to be based on bringing our jobs back -- the good jobs, the real jobs."

For Trump's legions of blue-collar supporters, all this is music to their ears, but for an industry already struggling with a severe shortage of skilled workers, the notion of expanding the number of jobs for which there already aren’t enough workers is daunting, to say the least.

"We are all in favor of job-creation efforts, but you can't fill jobs if people don't have the skills and credentials they need," says Kermit Kaleba, federal policy director for the National Skills Coalition, a Washington-based public policy research and advocacy organization that aims to raise the skills of the American workforce.

As part of his Manufacturing Jobs Initiative, Trump met with 24 high-powered executives from General Electric, Dell, 3M, Lockheed Martin, Whirlpool, Dow Chemical and other companies in late February. While the stated intention of the meeting was to garner insights on "how best to promote job growth and get Americans back to work again," some of the industry leaders told the president he wasn't entirely correct in his assertion that the "good jobs … have left." One of the executives was quoted by the Associated Press as saying "the jobs are there, but the skills are not," during a meeting with White House officials that preceded a session with Trump. (Reporters were prohibited from quoting individual executives by name.)

According to the Bureau of Labor Statistics, there are currently 324,000 open factory jobs nationwide, triple the number in 2009 at the height of the Great Recession. In addition, The Skills Gap in U.S. Manufacturing: 2015 and Beyond, a research report by Deloitte and The Manufacturing Institute, states that America will need to fill nearly 3.5 million manufacturing jobs over the next decade. Two million of those jobs are likely to go unfilled due to the skills gap.

While the long-dreaded exodus of baby boomers is helping fuel the shortage -- 2.7 million boomers are estimated to be retiring from manufacturing jobs between 2015 and 2025, according to the study -- an even greater factor is the evolving skill set required by today's manufacturing sector, according to Michelle Drew Rodriguez, manufacturing leader for Deloitte Services' Center for Industry Insights in Chicago.

"Manufacturing is going through a huge transformation, which we refer to as Industry 4.0, the fourth Industrial Revolution," says Rodriguez. "That's the digital and physical world converging and, with that, even among the individuals who aren't retiring, the skill sets that are required for the future aren't the same as the skill sets individuals have today."

That fact hasn't escaped the modern-day titans of industry, who reportedly urged the Trump White House to support vocational training for the high-tech skills that are increasingly required in today's manufacturing environment. Long before Trump's election, however, savvy manufacturers had already been working toward that goal -- forging partnerships with high schools and colleges to prepare students for manufacturing careers.

 

Growing Their Own

In Rockford, Ill., management at Woodward Inc. was keenly aware of the pending skilled worker shortage. With a large population of employees over age 50 and a major contract with GE that extends out over the next 30 to 40 years, Woodward was "looking at a double whammy," says June Hazzard, vice president of human resources for the company's Aircraft Turbine Systems business segment. The independent designer, manufacturer, and service provider of control solutions for the aerospace and industrial markets had built a new $250 million, 450,000 square-foot facility, but feared a potential shortfall of workers to staff it.

In 2015, when the new plant opened, approximately 1,500 people worked in Woodward's two Rockford area locations. (The company also operates facilities in Colorado, California, Michigan, South Carolina and throughout the world.) By 2021, that number is expected to jump to 2,200.

"Twenty years ago, the philosophy was to steal skilled workers from each other," says Hazzard. In recent years, however, the company adopted a new approach. Rather than poaching workers from other northern Illinois manufacturers, Woodward management decided to "grow [their] own" through initiatives with Rockford Public Schools and Rock Valley College, a Rockford-based community college.

Students enrolled in the Engineering, Manufacturing, Industrial and Trades Technology academy at two Rockford high schools receive instruction that's been designed in collaboration with Woodward representatives, who advise teachers on ways to incorporate something from the manufacturing realm into an English or math class with the goal of creating a multidiscipline approach to preparing students for a career in manufacturing. Woodward also gives students regular tours of its facilities and sends representatives into the classroom to help students with their resumes and provide tips for a successful job interview. 

Graduates of the program often go on to pursue engineering degrees at Northern Illinois University in nearby DeKalb or enroll in the Summer Manufacturing Program with Rock Valley College, which provides recent high-school graduates with 20 hours a week of classroom training for a total of 120 hours, in subjects such as manufacturing awareness, blueprint reading and safety. Students emerge from that class prepared to take two of the National Institute for Metalworking Skills certification exams. Once they receive certification in materials measurement and safety or CNC milling, they are guaranteed an interview with Woodward, which hires three-quarters (15 to 20) of each year's graduates as level-one operations technicians.

  

Building the Foundation

In North Kingstown, R.I., demand for skilled workers skyrocketed at General Dynamics Electric Boat shortly before Trump took office, when the U.S. Navy contractor secured a major new contract to build Columbia-class nuclear submarines. As a result of that and other contracts, the company projected the need to nearly double the size of the workforce at its Quonset Point facility -- from 3,400 to 6,000 in the next decade, according to Chief of Staffing Brian Howard.

Fortunately, Electric Boat anticipated the increased demand, even in the midst of the 2008-to-2010 economic downturn, and began laying the foundation for a program that would significantly boost the number of entry-level workers. The company partnered with Gov. Gina Raimondo and her administration as part of the Real Jobs Rhode Island program, intended to build pipelines of trained, skilled workers in industries across the state.

Through the Pipelines to Manufacturing Careers in Shipbuilding partnership, Electric Boat introduces students as young as ninth-grade to marine trades. Training becomes more advanced with each passing year, with students entering into an advanced welding and ship-fitting program. By their junior year, they are exposed to customized training at one of Electric Boat's two new-hire training facilities.

"That's where the switch happens from a general marine trade curriculum to an Electric Boat-specific customized training," says Howard.

The summer before their senior year, students participate in an eight-week paid internship with the hopes they will return upon graduation as full-time hires.

"We see that as a real opportunity, not only as a recruiting tool for those students who complete the internship, but also for their classmates," says Howard. "These students get the good exposure at Electric Boat and then go back for their senior year and share that experience with their classmates."

Over the next two years, about 180 students will enter the program. The goal is to eventually graduate 350 students per year.

"Eventually, we want to have these students graduate [from high school] on a Friday and come see us on a Monday," says Howard. "That’s the intent -- to have this pipeline be the real foundation for our future."

While manufacturers continue seeking new ways to recruit or grow their future workforce, President Trump clearly intends to continue pushing to convince companies to keep their manufacturing operations in the U.S. However, Brian Kropp, HR practice leader for CEB in Arlington, Va., doubts those efforts will have much of an impact. 

"These are big companies with global operations and, cost-wise and quality-wise, it just doesn't make sense to bring jobs back to the U.S.," says Kropp. "In the grand scheme of things, those sorts of pushes make great political headlines, but in terms of fundamentally changing the underlying characteristics and reality of the labor market, it’s not going to do much."

When it comes to Trump's proposed immigration reform initiatives, such as rolling back the number of H-1B visas, Kropp believes there is more cause for concern. "If there are restrictions put on [H-1B] visa holders, that will make it harder for manufacturing companies to find the high-quality talent they're looking for," he says.  

While Woodward's and Electric Boat's school-based partnerships pre-date the election of Donald Trump, both are confident their initiatives have put them in such a good place, they will retain their ability to keep up with the demand for skilled workers even if the president keeps his promise to increase the number of American manufacturing jobs.

"We're extremely confident this program has positioned us to meet the demand for skilled workers," says Howard. "We're not going to claim this will solve all of our hiring needs, but it's definitely a good foundation to build the workforce of the future that's going to support our contracts."

 

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