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Charleston Manufacturers Focus on Training Current and Future Workers

Tuesday, October 31st, 2017

After visiting the Charleston Port terminal and the Mercedes-Benz Vans Training Center, I had the pleasure of visiting several manufacturers during my two-day trip to the Charleston metro area. We first visited Ingevity in North Charleston, where I met Michael Wilson, President and CEO, Dan Gallagher, V.P., Investor Relations, Eric Walmet, Charleston Plant Manager, Jack Maurer, Director, Communications and Brand Management, and Laura Woodcock, Manager, P.R.

Ingevity is a leading global manufacturer of specialty chemicals and high-performance carbon materials that are used in a variety of demanding applications, including asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants, publication inks, and automotive components that reduce gasoline vapor emissions. The company creates high value-added products from renewable raw materials. The name is “coined” from the meaning of four words:  genuine, ingenuity, innovation, and longevity.

Ingevity was spun off in May 2016 from WestRock, which has a long history and many name changes going all the way back to 1846 when it was founded as Ellis, Chaffin & Company. Ingevity is headquartered in North Charleston, and has manufacturing plants in South Carolina, Georgia, Kentucky, Louisiana, and Virginia, as well as two in China. Ingevity has four sites in the Charleston region: its headquarters with 205 employees, the manufacturing plant with 214 employees, the Ashley Center with 109 employees, and the Innovation Center with six employees for a total of 534 employees.

Michael Wilson said, “We recently announced an agreement to acquire Georgia-Pacific’s pine chemicals business for $315 million. This will give us a stronger more competitive pine chemicals business. We also signed a supply agreement with Georgia-Pacific which in combination with our agreement with WestRock, will put 70 percent of our crude tall oil requirements under long-term contract. There is little customer overlap between the two companies. And, because we do business in 65 countries, we believe we can accelerate global growth for the Georgia-Pacific products.”

When I asked him his impression of the manufacturing sector in the region, he responded, “The manufacturing base is very diversified. The business climate of South Carolina is world class. The mindset of the government has been beneficial. It is a right to work state and has low taxes.”

Eric Walmet gave us a tour of the Charleston plant and Innovation Center, where we saw some of the activated carbon end-products made by Ingevity. The products include carbon honeycombs, granular carbons, and shaped carbons used to reduce automotive gasoline emissions. The activated carbon is made by combining sawdust and acid through a proprietary process.

I could see that the plant was laid out on the basis of a Lean value stream mapping event, and there were the obvious signs of the application of Lean tools and principles on the shop floor.

Our next stop was IFA North America in nearby Ladson.  We met with Mauro Amarante, President and CEO, and Ryan Loveless, Training Coordinator.  IFA North America LLC, formerly known as MTU Drive Shafts LLC., was founded in 2002 and operates as a subsidiary of the German company IFA – Holding GmbH.

IFA is one of the world’s leading and largest suppliers of drive shafts and side shafts for the automotive industry. In North America, IFA produces more than two million drive shafts a year and employs more than 600 people.

Mr. Amarante said he has been in the U.S. 11 years, having previously lived in Germany, Brazil, and Verona, Italy where he was born and raised. IFA is currently building a new plant in Berkeley County (still in the Charleston metro area) that will be 234,000 sq. ft., where they will be manufacturing constant velocity joints. They plan to consolidate all their operations and expand to about 400,000 sq. ft. by 2023.

Mr. Amarante said, “South Carolina is very business oriented, and former Governor Nikki Haley was very business focused.  We have all the business conditions we need here to secure our workforce.  We were one of the partners with VTL and three other companies to start an apprenticeship program three years ago to teach basic manufacturing skills like math, statistics, gauging, and machine operations.”

Mr. Loveless gave us the plant tour where we watched their production team turn purchased metal tubes into several designs of drive shafts.  Mr. Loveless said, “In addition to our full-time employees, we utilize about 120 temporary workers from a private agency.  These people work for us for about three-six months, and then we select the best workers to add to our full-time employees base. We would like to reduce the number of temporary employees. This is why we are investing time and money into the apprenticeship program to grow our future employment pool.”

Again, I saw the application of Lean tools and principles throughout the shop floor.  We even had to watch a safety video before we got to take the plant tour, and I was glad I was wearing my own Sears Die Hard steel-toed shoes instead of having to wear their guest shoes. Of course, as an automotive Tier 1 and Tier 2 supplier, they are ISO 9001:2008 and TS 16949 Certified.

Next, we visited the VTL Group, also in Ladson, where we met with Jeff Teague, General Manager, and Brian Glasshof, Account Manager.  Mr. Teague said, “The company was started in 1919 and changed its name to Valeo Transmission Ltd. in 1997. The management team, Bruno Joan, Chris Elliott, and a third man who has since been bought out and retired, did a leveraged buyout in 2001.  Chris started at the company as an apprentice when he was a young man.

He said, “I started in November 2011 when the company was in a turn-around mode after the recession. I came from the Greenville/Spartanburg area.  We are now running in a very tight workforce market because of the low unemployment.

We specialize in the design, development, prototyping, and manufacture of high precision components and sub-assemblies for automotive powertrain applications. We have expanded by winning several new contracts.  This plant makes variable geometry turbo parts for Cummins and make engine components for Borg Warner.  Everything we do is built around CAFÉ standards for emissions. VTL Group employs 275 globally, and has 48 employees in this Charleston plant.”

He went on to tell me about the genesis of the region’s youth apprenticeship program. “We were one of the six companies that showed up at a meeting in 2013 to discuss starting an apprenticeship program, which launched in 2014. We had a signing day event for 11 students. Now, this fall we’ll have 100 in the program.  Apprentices can start when they are 16 years old in high school. There are now nine industry sectors and 122 companies in the apprenticeship program. Industrial mechanics is the most requested training.”

Two of their new apprentices were brought in to meet me:  John Cody Geiger and Ty’Celia Young.  Both are high school students.  Ty’Celia said, “My high school engineering teacher encouraged me to apply when I was a junior.” Cody said, “I got an email from my high school principal and applied as a senior, so I graduated before starting at VTL.”

They go to high school in the morning, and then take industry-specific college courses a couple afternoons, and go to work the other afternoons during the school year. In the summer, they work full-time. When they complete the apprenticeship program, they will be Certified as Journeymen by the Department of Labor. They will also have two years of paid work experience on their resume. VTL has hired two past apprentices as full-time employees.

There are 26 schools in the apprenticeship program, public high schools, as well as charter schools and private schools. The Charleston Metro Chamber of Commerce pays for the tuition, tools and supplies for all of the students, so the students are getting their training free of charge. The Charleston Metro Chamber focuses on in-demand occupations. Besides advanced manufacturing, Charleston is also becoming an IT hub.

When I asked about the curriculum, I was told that the community colleges already had curriculum, which the companies helped modify to meet their needs. The program has two main goals:

  • Fill the critical workforce needs.
  • Monitor the next generation of students to keep them in the region.

Apprenticeship training is not all the training provided at VTL. Every employee is allowed one hour a week for training, but it is up to them to take advantage of the opportunity. VTL uses ToolingU training modules for their in-house training program.

Mr. Teague gave us the plant tour, and I was amazed at how many robots they had doing various manufacturing processes and moving parts from one operation to another. No wonder that only 48 employees at this plant are able to maintain the work flow required of a Tier 1 and Tier 2 automotive supplier. The parts I saw in process were Variable Cam Timing engine components and turbo-charger components. Mr. Teague showed me their Lean scoreboard section where there are visual displays of all the metrics required for a Lean company.  Naturally, VTL is also ISO 9001:2008 and TS 16949 Certified.

From these tours, I could see why world class companies are choosing to locate or expand in the Charleston, South Carolina region. A very favorable business climate, excellent transportation options by truck, rail, and ship for both national and international destinations, a highly skilled, trained workforce, and apprenticeship programs make the region a desirable location for many manufacturing sectors, especially those that export their products.

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High-Performing Port and Workforce Training Drive Global Manufacturing in South Carolina

Tuesday, October 17th, 2017

Last week I had the opportunity to spend two days visiting the Charleston, South Carolina metro area as the guest of the Charleston Regional Development Alliance (CRDA).  Claire Gibbons, Director of Global Marketing & Communications, was my hostess, and told me that if you drew a line along the 32nd parallel across the U. S. from San Diego, you would wind up at Charleston.  Like San Diego, Charleston is a major port, being the deepest port along the south Atlantic coast, able to handle ships with up to 48 ft. draft, depending on tides. Charleston is about 50% lower in population than San Diego (761,000 vs. 1.407 million (2016), but is growing 3X faster than the U.S. average (14.5% vs. 4.7%).

Charleston is a military town like San Diego and is home to Joint Base Charleston, one of twelve joint facilities operated by the Department of Defense; the U.S. Space & Naval Warfare Systems Center Atlantic (SPAWAR), one of the Navy’s only two cyber mission engineering centers; and nearly all U.S. Dept. of Defense and Dept. of Homeland Security agencies. These facilities represent more than 23,000 active duty, civilian and contract civilian personnel.

Our first stop on my visit was the South Carolina Ports Authority (SCSPA), where we met with James Newsome, III, President and CEO.  He said “Charleston meets the needs of today’s global shipping industry, particularly as large vessels are deployed to East Coast trade routes. Our South Atlantic location is a significant driver of the Port of Charleston’s above-market average cargo volume growth, offering proximity to the fastest growing population in the U.S., as well as a booming manufacturing economy.”

He said, “We just received approval to dredge to 52 ft. depth to be able to handle the new, larger container ships that are coming online.  Two new taller cranes just came online (155 ft. vs. 115 ft.), and we have two more on order to install in 2018. We are also raising four existing cranes, for a total of eight cranes offering 155 ft. of lift height. We have three active cargo terminals now, and a new terminal is in development on the former Navy Base.

One of our terminals is a drive off terminal for automobiles, and the other two handle container ships. The new terminal will also handle container ships. The larger container ships are 13,000 TEUs in capacity. We also built a new rail connection from Charleston to the Inland Port in Greer to able to reduce truck congestion at the port and expedite rail shipments out of the region. “

As we drove around the terminal that has the new cranes, I was dismayed to see thousands of containers from Chinese and German shipping lines, but was encouraged when Mr. Newsome said that according to the latest report, Charleston is the port that is the most balanced in terms of imports and exports on the Atlantic coast. The port is also seeing good growth in exports of manufactured goods. The three terminals turn over the entire number of containers every 7-10 days.

Mr. Newsome said, “Charleston ships more tires than any other port in the United States.  Michelin came in the 1970s and has invested $6-7 billion in their manufacturing facilities. BMW came in 1994 and has invested about $10 billion in their facilities. About 70% of BMWs are shipped out of the Charleston port from the entire line made in the U. S. Boeing built a plant in 2009. Mercedes-Benz Vans is building their new Sprinter vans here. Volvo will open a new $500 million facility near Ridgeville in 2018. Five companies represent about 70% of our shipping volume.”

After I returned home, I found this important data on the Port’s website: “A 2015 study by the University of South Carolina’s Darla Moore School of Business concluded that the Port’s statewide impacts include:

  • $53 billion in annual economic activity
  • 187,600 jobs
  • $10.2 billion in labor income
  • 10 percent of total annual gross state product
  • $912 million in tax revenue”

Besides cars, tires, and other manufactured goods, Mr. Newsome said that the major products shipped out of Charleston are: agricultural (soybeans, grains), forest products (including diaper pulp, poultry, and pork.

According to the SCSPA website, the five fast-growing business sectors for the Port are:

  • Automotive manufacturing
    •Consumer goods distribution
    •Refrigerated/frozen exports
    •Transloading resin & grain
    •Tire manufacturing & distribution

Charleston shares some of the same industry clusters that San Diego has:  Aerospace, Information Technology, and Life Sciences. Their other two largest industry clusters are automotive and logistics. The following chart derived from data on the CRDA website shows the top ten manufacturers ranked by number of employees:

Company Products Employees Nationality
The Boeing Company
Aircraft manufacturing 7,400 American
Robert Bosch LLC Antilock brake systems, fuel injectors 1,800 German
SAIC Electronic security and communications systems 1,500 American
BlackBaud Inc Specialty computer software 1,300 American
Kapstone Charleston Kraft LLC Specialty paper & packaging 1,000 American
Nucor Steel Carbon & alloy steel 1,000 American
IFA North America LLC Automobile drive shafts 600 German
Mahle Behr Engine cooling systems 375 German
BAE Systems Electronic security and communications systems 350 British
V. T. Milcon Fabrication & assembly of communications systems 275 British

On our drive to our next appointment, I asked Claire to fill me in on the South Carolina business climate, so I could understand why so many foreign companies have established plants in the state. She said, “South Carolina offers a strategic location, particularly for companies based in Europe, and a business-friendly climate. We are a “right to work” state with one of the lowest corporate income tax rates in the south.” There are other benefits shown on the CRDA website: “no state property tax, no local income tax, no inventory tax, no sales tax on manufacturing machinery, industrial power or materials for finished products, no wholesale tax, and no unitary tax on worldwide profits.”

Claire added that another big advantage is that when a company relocates or expands to South Carolina, they can get training at little to no cost for their employees through readySC™, a division of the South Carolina Technical College System.  ReadySC’s mission is to “To promote the economic and workforce development of the state of SC. We provide customized training for new and expanding business and industry in the state of SC…”

Later in the day, I had the opportunity to visit the Mercedes-Benz Vans Training Center, where I met with Terrance Rivers, Area Director of readySC™, Susan Pretulak, V. P. Economic Development of the SC Technical College System., and Alyssa Bean, responsible for communications at Mercedes-Benz Vans manufacturing plant.

Ms. Pretulak said, “The Division of Economic Development works to not only attract new and expanding companies to the state but also provide the workforce development tools necessary to make certain they grow and prosper in South Carolina over the long term. The division is touted as providing a comprehensive solution for companies looking to grow their workforce in South Carolina. Housed within the division are the System’s nationally renowned statewide programs — readySC™ and Apprenticeship Carolina™.”

She explained, “Training is state-funded and is open to companies who will hire 10+ new, permanent, full-time employees with benefits.  There is a simple two-page agreement to participate in the program.  We have 16 technical colleges in our system, and each college has a readySC™ group. We are working with 89 companies at present.  We have two programs: (1) Pre-hiring Training, which is an unpaid training experience to provide potential employees for a company client and (2) Post-hiring Training, which is job specific training, such as welding, machining, assembly, etc.”

I asked if they have developed their own curriculum or do they use the SME ToolingU curriculum, and she said, “Some of both.” Mr. Rivers said. “We have a three-phase program:  Design, Discovery, and Delivery to customize the training to meet a company’s needs. Daimler was one of our first clients before they switched their name to Mercedes-Benz Vans. They make the Sprinter van at their plant.”

The readySC website expands on the requirements to participate in the program, specifying: To qualify, we require that:

  • Jobs projected must be permanent.
  • Pay represents a competitive wage for the area.
  • Benefit package must include health insurance.
  • Number of jobs created must be sufficient enough to allow readySC™ to provide training in a cost-effective manner.

Ms. Pretulak informed me that the SC Technical College System is also responsible for the Apprenticeship Carolina™ program, which “works to ensure all employers in South Carolina have access to the information and technical assistance they need to create demand-driven registered apprenticeship programs. At no cost to the employer, apprenticeship consultants are available to guide companies through the registered apprenticeship development process from initial information to full recognition in the national Registered Apprenticeship System.

The program started with 90 apprenticeship programs in 2007, and now has 918 programs today, representing 14,475 apprentices. One in three participating employers offer programs in more than one occupation.  The target industries are:  advanced manufacturing, construction technologies, energy, health care, information technology, and tourism and service industries. The total number of apprentices trained to date is 26,864, and the program is averaging more than 120 new apprentices per month.

At dinner that evening, I met Robin Willis, Associate Vice President, Talent Pipeline Strategies for the Charleston Metro Chamber of Commerce.  She said, “We are very proud of the growing number of Youth Apprenticeship students and their hosts in our region. We feel strongly that this program provides life changing experience for students and helps companies fill their critical Talent needs, so much so we have funded the program in its entirety. There are 105 Youth Apprentices currently in the workforce – 66 new ones that started in August 2017 and 39 who started their 2nd year in August 2017 and will complete the program in June 2018.

I told everyone that I haven’t visited any other state that has such comprehensive training and apprenticeship programs, and I am very impressed by what South Carolina has to offer to existing and relocating companies. It is no surprise that so many foreign companies are choosing South Carolina to establish or expand their U.S. presence. Other states (particularly California) would be smart to emulate the business incentives and training programs offered by South Carolina.

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North Dakota Focuses on Accelerating Growth of Emerging Companies

Wednesday, May 24th, 2017

The last week of April, I visited the Fargo, North Dakota region as the guest of the North Dakota Department of Commerce’s Economic Development & Finance Division, which is charged with coordinating the state’s economic development resources to attract, retain and expand wealth. My host was Paul Lucy, former director of the Economic Development & Finance Division, and we visited several companies and met with heads of organizations working to accelerate the growth of emerging companies and retain successful existing companies.

For many people, the only impression they have of Fargo is based on the movie and subsequent TV series of the same name. I never saw the movie and haven’t watched the TV series, but have a cousin in Fargo who is always bragging about what is happening, especially what celerity is coming to perform. I learned that the Red River is the boundary between North Dakota and Minnesota, and about 230,000 people live in the greater Fargo/Moorhead region. It has one private and two public four-year universities, along with several community, technical, and business schools. With nearly 30,000 college students, it is a college town that rivals any in the nation.

As we began our first day of appointments, Paul said, “There are development projects in motion that have  a vision of making downtown Fargo a more vibrant place to live and work, which could lessen urban sprawl and result in more efficient investment in city infrastructure and services. An added bonus would be the preservation of more of North Dakota’s fertile farmland for agriculture production.”

Our first appointment was a breakfast meeting at Emerging Prairie, a co-working space in downtown Fargo. We met with Greg Tehven, Executive Director of Emerging Prairie. He said he grew up on a farm and is a 5th generation North Dakotan. When he was attending the University of Minnesota, he remembers that one of his professors recommended that North Dakota be turned back to the prairie because from 1930 – 2000 there was a “brain drain,” when the best and brightest left the state.

Greg said, “I never intended to go back to North Dakota when I graduated, but while I was an undergrad at the Carlson School of Management at the University of Minnesota in 2003, I co-founded Students Today, Leaders Forever. After graduating, I joined the Kilbourne Group and worked on a variety of projects to stimulate growth and entrepreneurship in downtown Fargo.

He explained, “I burned out and worked my way around the world in 2010. I had a Rotary Ambassador scholarship and got accepted to the University of Manchester to study social change in 2011. I had a year before I started school, so I worked for Doug Burgum for a year and discovered “urbanism.” When I gave a TEDx Talk in Minneapolis, I made a conscious choice that instead of studying social change, I wanted to practice social change.”

He said, “Three of my friends and I founded Emerging Prairie in 2013 to turn Fargo into a vibrant startup community. Our mission is to connect and celebrate the entrepreneurial ecosystem in Fargo-Moorhead. We do so by operating a wide variety of events and initiatives, such as the Drone Focus Monthly, the Prairie Den co-working and event space Hackathon, Meetup groups, and the Intern Experience. We have TEDx Fargo, an independently organized TED event, and 1 Million Cups Fargo, the largest and most active 1 Million Cups program in the country.

We support tech-based entrepreneurs. We are not very involved with manufacturing – most of our entrepreneurs are in software. We provide entrepreneurs: (1) a founders-only retreat (2) a platform to share their work and investment opportunities, and (3) access to consultants. I believe in transfer of information, but not a formal mentor relationship. We have to make it a “cool” climate for college students. We host midnight brunches and do a lot of weird and strange things. We have 144 members of our co-working space, modeled like a student union. We have no desire to maximize profits, but to maximize impact. Millennials are wired to maximize impact rather than maximize profits.”

He expanded, “We host the Ted Ex Fargo and will have about 2,000 people at the event this summer where the CEO of the Kauffman Foundation will speak. We host an Ecommerce conference in Moorhead. We support the drone industry and run a drone conference that started two years ago with 240 attendees the first year and 330 the second year. We expect about 600 people this year on May 31st. We host different other events and also operate an online publication that highlights the regions entrepreneurs and innovators that are turning Fargo into a flourishing tech hub. In 2016, we became a 501(c) 3 non-profit.”

Our next visit put what Greg has said into perspective. We visited the Greater Fargo Moorhead Economic Development Corporation (GFMEDC) where we met with James Gartin, President, Mark Vaux, Executive V.P, Business Development, and Lisa Gulland Nelson, V. P., Marketing and Public Relations. Mr. Gartin said, “Our goal is to be a key catalyst for business growth and prosperity for the region. As far back as five years ago, we felt that we had a difficult situation because of our workforce and ability to attract new companies with our extremely low unemployment rate that is currently3.4%. Every time we get a RFQ, the first thing we get asked is:  Do you have enough employees? We made a commitment early on that we weren’t going to take away employees from our existing employers. While we still work to attract companies to our region, we realized that if we need to work with our two universities to change the philosophy from ‘research for papers’ to ‘research for commercialization’ to facilitate start-up companies.”

He explained, “We have funded Emerging Prairie since its inception and are helping them to support entrepreneurism. We attend and support 1 Million Cups, where the entrepreneurial community meets with K-12 superintendants, organizes manufacturing tours for high schoolers, and recruits companies to our community.

He added, “Governor Doug Burgum’s son, Joe Burgum, is committed to making Fargo the best place on earth to live. He founded Folkways that is a community-building collective dedicated to supporting the region’s culture creators. He created the Red River Market,  successfully lobbied to bring the ride-sharing service Uber to North Dakota, and puts on a course to help entrepreneurs launch local businesses.”

He said, “At North Dakota State University’s Research and Technology Park, there is great collaboration to make it a leader in developing Intellectual Property. Entrepreneur magazine ranked Fargo in the top 10 for entrepreneurism. We have a number of ‘0-60’ speed companies in operation, and a lot more that are on the cusp. The most important thing is that our senior leaders are seeing a difference in the growth of business. We modeled our approach after Brad Feld’s book, Startup Communities: Building an Entrepreneurial Ecosystem in Your City, based on Boulder, Colorado. The start-up phase is ten years, and we are only 4-5 years into the program. Cities can’t push entrepreneurism. You can’t make people start companies, but you can help to build the ecosystem.”

The supplemental material I was provided revealed that the costs of doing business in North Dakota are around 15 percent less than the national average because of the following:

* Research and development tax credits

* Corporate income tax exemption

* Property tax exemptions for new or improved buildings

* No personal property or gross receipts taxes

* No sales tax on eligible services, manufacturing or computer/ telecommunications equipment

* Seed and angel capital investment tax credits

* Early-stage financing resources

* State-sponsored workforce training grants

The GFMEDC website states, “Some of our largest employers include divisional, regional, national and global headquarters & facilities for Microsoft Business Solutions, Bobcat Co., John Deere Electronic Solutions, Border States Electric Supply, RDO Equipment Co., Tech Mahindra, Titan Machinery, Nokia HERE and American Crystal Sugar.” The Microsoft campus came about when Great Plains Software, Inc. was acquired in 2001. There doesn’t seem to be a dominant manufacturing industry in Fargo, as the list of top manufacturers includes farm and construction equipment, power equipment, windows/doors, metal fabrication, steel, and composites.

We also discussed the challenges of solving the skills gap and attracting the next generation of manufacturing workers. Mr. Gartin said, “Tip Strategies out of Austin, TX did an economic development strategy study for us on how to grow economy and our workforce. We have funded the plan and are implementing it. We have some of the most unique workforce strategies in the country. Industry and education mesh. We have a very robust manufacturing Day that we handle. We have funded a Maker Space in Moorhead and helped NDSU create a Maker Space, job shadowing and internships. We have a Tri-College University consortium. Students can take classes and get credit at any of the colleges and pay the same rate. Last year, the two-year technical schools collaborated so that students can take classes at any one for the same rate.”

Tri-College University is a unique consortium that allows students enrolled at any one of its five member institutions to take courses at the others at no extra charge, and to apply the credits toward graduation requirements at the home campus. The five member colleges are:

  • Concordia College – Moorhead
  • Minnesota State University Moorhead
  • North Dakota State University – Fargo
  • Minnesota State Community & Technical College – Moorhead
  • North Dakota State College of Science – Wahpeton & Fargo

When I mentioned The Playbook for Teens program I have written about that mentors middle school girls to get them interested in STEM careers, he said, “We think it needs to start in elementary school in the second or third grade when students are starting to learn math. At NDSU, there is an Engineers in the Classroom program where engineering students work in classrooms to teach math. They matched first and second graders with an engineering student to work with them on project based learning. It was tested in an 8-week program, and every student jumped up two levels. This year, there is an engineering student in every classroom, and the students are about to be tested. This could be the opportunity to show that this works, so that we can apply for a Pew grant to fund the program.”

Mark Vaux said, “Our business development program is based on attraction, business retention, and expansion. We visit at least 150 companies on an annual basis looking for opportunities and challenges, so we can help them through the challenges and barriers to growth and recommend actions to take. If companies are buying new equipment or adding workers, there are state programs that will help them.”

Lisa Gulland Nelson described some of the Workforce programs they have:

  • Operation Intern – primary sector business are eligible for matching funds of up to $30,000 per legislative biennium or $3,000 per intern for hiring North Dakota college students or high school juniors or seniors.
  • New Jobs Training Program – matching grants to assist qualified North Dakota employers in training or upgrading their employees’ skills.

Overall, I was impressed with North Dakota’s policies to provide a favorable business climate for its businesses and wish that California would adopt some of these same policies. The Fargo region is smart to focus on emerging businesses to retain their college graduates and keep them from going to other states for jobs. My next article will cover the incubator at the NDSU Research & Technology Park.

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Workshops for Warriors Holds Successful Inaugural Gala

Thursday, May 18th, 2017

On April 20, 2017, over 300 people attended the Workshops for Warriors Inaugural Gala that was held on the USS Midway Carrier Museum in San Diego, California. Former California Assembly member Nathan Fletcher, now a Professor of Practice in Political Science at the University of California, San Diego, was the Master of Ceremonies.

The WWII tribute trio, the American Bombshells, sang the opening national anthem and provided the entertainment later in the program. Founder and CEO of Workshops for Warriors, Hernán Luis y Prado, gave the welcoming remarks and showed the latest short video featuring testimonials by students on how WFW gives them a sense of potential again.

He said, “This evening’s celebration is in honor of the 388 Workshops for Warriors’ veterans, wounded warriors, and transitioning service members who have earned over 1,500 national recognized certifications. Our graduates work in advanced manufacturing centers throughout the U.S.A. and contribute $27 million to America’s economy every year. This number continues to grow. We are proud of their successes and contributions to our community, the manufacturing industry, and our nation as a whole.”

He briefly described how he and his wife, Rachel, had self-financed the training they began providing in their own garage in 2008 while Hernán was still in the service. He said that he heartsick at seeing too many veterans unable to transition successfully into civilian life and even commit suicide. When he ran into one of his buddies from his service in Iraq confined to a wheel chair after losing both his legs from an IED, he and his wife decided to invest all of their assets to expand into their first small building in early 2011. He had previously told me that they got their first outside funding from Goodrich Aerostructures, so that they were able to move into a building twice the size in October 2011.

Hernán said, “Many of you understand our Double Funnel dilemma…a waiting list of over 500 students but over 2,500 jobs available nationwide for each one of our graduates…The Challenge? There is only funding for 50 students every semester. Now is the time to take action to expand Workshops for Warriors with our $21 million capital campaign. This expansion would allow us to train ten times as many veterans and provide them with opportunities to serve America in a new role as they provide for their families and take part in the American dream.”

He extended his heartfelt thanks to Reliance Steel& Aluminum Company, and the Harriet E. Pfleger Foundation for being the Red, White and Blue sponsors for the evening. He said, “These contributors have been our “Champions,” whose dedication and continued support have made a meaningful and profound impact in helping Workshops for Warriors grow while changing the lives of veterans. For example, Reliance Steel provided funding to add 18 welding stations and add a new Computer Aided Design laboratory that allows an additional 18 CAD/CAM students every semester to receive our life changing training and certifications add several stations for CAD/CAM software training.”

He concluded his remarks saying, “I am extremely grateful to those of you who have chosen to take action. I am humbled by your commitment to our nation’s veterans and America’s manufacturing industry. In 150 years, people will look back on Workshops for Warriors as the birthplace of American’s advanced manufacturing renaissance. Thank you for supporting Workshops for Warriors.”

MC Fletcher then introduced Jim Hoffman, Executive V. P. and COO of Reliance Steel & Aluminum Company. He relayed the comments of President and CEO Gregg Mullins, who was unable to attend the event. He said, “Reliance Steel is a proud supporter of Workshops for Warriors, a nonprofit organization dedicated to providing fee training in welding, fabrication, CAD/CAM programming, and advanced machining to Veterans, Wounded Warriors and Active Duty personnel. Their mission is to equip the students with marketable skills and nationally recognized credentials so they can secure careers in manufacturing and achieve success in their civilian lives.”

He continued, “Workshops for Warriors is funded through private donations from individuals and companies like Reliance, and 83% of every dollar donated goes directly to the training programs. Over the years, Reliance has supported Workshops for Warriors by funding equipment purchases, forging partnerships with our industry peers, making donations, and hiring Workshops for Warriors graduate. We have held events among our employees to not only raise funds but increase awareness about the important work being done by Workshops for Warriors to serve a population that has so faithfully served our country. As they transition into the manufacturing sector careers, Workshops alumni continue to serve by contributing to our country’s economy.”

He concluded, “Workshops for Warriors’ Capital Campaign is underway, with a goal of raising $21 million to build a new facility that can accommodate ten times as many students as are currently enrolled. As the Capital Campaign Committee Chairman, President Gregg Mullins is personally calling on you for support. A great opportunity is here for us to give back to those who have gone above and beyond to protect us. Let’s do our part to help our men and women in uniform succeed and thrive.”

Next, Darnisha Hunter, Active Duty and Veterans Family Advocate from the Office of San Diego Mayor Kevin Faulconer’s office, read a proclamation in which April 20, 2017 was declared Workshops for Warriors’ Day in the City of San Diego.

This was followed by a short speech by alumnus Scott Leoncini, who had been a Marine. He said, “When I got out I didn’t know what I wanted to do. I met my amazing wife Michelle… [who] told me that I should go to school. Determined not to lose her, I did just that.” He worked in gun shops while going to college and finished college with a bachelor’s degree in criminal justice.

He said, “I went on a ride along one night with a local police department and decided that I needed to become a police officer…. I applied to almost all the agencies near my home, but only to end up with a stack of denial letters…I hit a huge wall, I was depressed, looking for any better paying job as I was making 10/hr as a security officer. ”

Then, he heard that a Marine friend of his was killed in a helicopter crash in Florida after just coming back from receiving the Silver Star for his actions in Afghanistan. Scott said, “It took me 6 years of struggle and Andy dying to realize that I needed to change my path, I needed to identify with something else…”

A few days later, he reconnected with some Marine friends, and one of them, Josh Garcia, “was enrolled at Workshops for Warriors at the time, and he told me about how Workshops helped him get into a welding career. Josh told me that they had a Machining program too. The only thing knew about machining is that it was the process used to make guns. I decided that’s what I would do because honestly, I didn’t know what else to do, this was my last effort. Not sure how I would end up, I took a leap of faith.”

Scott went to school in the day and worked nights at a local gun store as he had to work to support his family. He said, “We had a small class of about 10 students, a few of us were vets, and the rest were active duty. I loved working with vets and active duty marines again… All the guys in class had somehow found their way to Workshops… we all were struggling with transition but had the same goal…create a new identity…”

He graduated in spring 2015 with eight certifications in Mill, Lathe, Solidworks, and Mastercam and was offered a job as a Workshops for Warriors Teaching Assistant and be a part of the train-the-trainer program.

Scott said, “I found that I loved teaching and helping students get through the program…I love to come up with new ways of teaching material, and motivating students to push through when it gets hard. I am grateful for the Train-the-trainer program, and opportunity to help students. I am thankful to Hernan and Rachel for helping me discover my passion. To further my abilities, and to ensure that Workshops continues to be the greatest Advanced Manufacturing  school in America, I recently enrolled at Point Loma Nazarene University School of Education where I am earning a Master’s in Education Teaching and Learning  which will allow me to grow even more within Workshops for Warriors. The train-the-trainer program has given me a new path and allowed me to connect with the veteran community. I am helping other veterans not go through what I did when I got out of the military.”

After this inspiring testimonial, the American Bombshells performed while guests were invited to view and bid on the many silent auction items on display.

Afterward, Special Guest Speaker Donald “Doc” Ballard, Metal of Honor Recipient, gave his remarks. After a brief description of how he earned the Medal of Honor during the Korean War, I took note of the fact that he said, “Too many times, we preach to the choir of those who have served in the military and already have an appreciation for what veterans have done to serve their country. We are missing the mark; only 1% has served our country…The military is a family-owned business that we hand down from generation to generation. Not everyone can serve in the military, but we do have an obligation to this country to thank veterans for the freedom they fought for…We thank a teacher for our ability to read, but we can thank a veteran that we can read and write in English. We can thank veterans by supporting Workshops for Warriors so they can expand to other states. Everyone can serve the military by taking care of the people who are doing the job they can do or won’t do for whatever reason…”

The event closed with more entertainment from the American Bombshells while the guests whose bids won were notified and presented with their auction item.

During dinner, I asked the man sitting next to me why he supported WFW. Doug Davis, General Manager at Kearny Mesa Ford & KIA, said, “Workshops For Warriors is simply an amazing program that is helping Veterans make a living for the rest of their lives. All of us know when we have a skill in the work place, our individual self-esteem improves greatly, and we can go home to our families with a sense of accomplishment. Workshops teaches the manufacturing trade to our Veterans, and when they graduate with a welding or machinist certification, a job is waiting for them 100% of the time! That’s exactly what Workshops for Warriors does for our Veterans. I am lucky enough to support Workshops for Warriors through three channels:  personally, my dealership, Kearny Pearson Ford & KIA, and finally through the Ford Motor Company as Chairman of the San Diego Ford Dealers Ad Association Board in selecting recipients of charitable donations.”

Whether or not you have served in a branch of the military, you can help change the life of veterans and Wounded Warriors by support their training in manufacturing skills by donating to the Workshops for Warriors Capital Campaign.

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MEPs are Essential to Rebuilding American Manufacturing Competitiveness

Tuesday, April 18th, 2017

Last month, President Trump submitted a “Skinny Budget” with the goal of removing some of the “fat” within Washington DC. Unfortunately, one of the programs eliminated in his budget is not “fat.” The Manufacturing Extension Partnership (MEP) is the only federally funded national network dedicated to serving small and medium-sized U. S. manufacturers. The MEP program was re-authorized by both Houses of Congress by unanimous consent earlier in January when the MEP program went back to 1:1 cost matching. The reality is that the MEP network is essential to helping manufacturers be competitive in the global marketplace and rebuilding American manufacturing. Eliminating the MEP program seems contradictory to President Trump’s focus on manufacturing.

The MEP website states, “Since 1988, the Hollings Manufacturing Extension Partnership (MEP) has worked to strengthen U.S. manufacturing. MEP is part of the National Institute of Standards and Technology (NIST), a U.S. Department of Commerce agency…MEP is built on a national system of centers located in all 50 states and Puerto Rico. “Each center is a partnership between the federal government and a variety of public or private entities, including state, university, and nonprofit organizations. This diverse network, with nearly 600 service locations, has close to 1,300 field staff serving as trusted business advisors and technical experts to assist manufacturers in communities across the country.”

This public-private partnership provides a high return on investment to taxpayers. “For every one dollar of federal investment, the MEP national network generates $17.9 in new sales growth for manufacturers and $27.0 in new client investment. This translates into $2.3 billion in new sales annually. And, for every $1,501 of federal investment, MEP creates or retains one manufacturing job.”

The top challenges reported to MEP by manufacturers are:

  • Cost Reduction 70%
  • Growth 54%
  • Employee Recruitment 47%
  • Product Development 45%

In FY 2016, the MEP national network interacted with 25,445 manufacturers and achieved these results through their wide range of services:

  • $9.3 Billion New and Retained Sales
  • 86,602 New and Retained Jobs
  • $3.5 Billion New Client Investments
  • $1.4 Billion $1.4 Billion Cost Savings

I have long been aware of the work of the California MEP, California Manufacturing Technology Consulting (CMTC), headed up by Jim Watson, but when I visited Cincinnati, Ohio last fall, I had the pleasure of meeting with Scott Broughton, Director of the Advantage Kentucky Alliance (Kentucky’s  MEP), and David Linger, President & CEO of TechSolve, one of the Ohio MEP affiliates.

I contacted all three for input for this article, and Scott Broughton was the first to respond. He said, “AKA has generated over $88 million in impacts with 50 clients working with over 1,300 employees in the past 12 months alone. We are currently working with small manufacturers in Eastern Kentucky, who used to work in the coal industry to identify, vet, and implement change allowing them to work in non-coal industries and helping them to be sustainable in the future. These companies have worked with other entities with mixed results. AKA’s programs are centered on AKA facilitators mentoring and training employees, allowing them to be the driver of change with continued support. This allows the employees to ‘learn by doing’ with the support and assistance of AKA’s specialists. AKA’s average engagements are over 12 months with monthly interactions allowing for sustainable support, change, and implementation.”

He added, “For every federal dollar spent, it has resulted in $170K in impacts in Kentucky! Specific impacts in the past 12 months are below and that does not include the 762 new jobs created/retained:

  • $9.9 million in new sales
  • $21.6 million in retained sales
  • $10.8 million in cost savings
  • $40.3 million in investments made”

Broughton provided me with case studies for six clients, which are too lengthy to cite in detail in this article. Three of the six received training in Lean manufacturing through AKA, two were helped to find new markets, and two were helped with new product development. Highlights of the results are:

  • Skillcraft Sheetmetal, Inc. – “a reduction in labor equating $27,000 in 2014 alone”
  • Post Glover Resistors – ” 12% reduction unnecessary Labor”
  • Outdoor Venture Corporation – “Increased sales by $500,000 and increased cost savings by $1 million”
  • Cumberland Mine Service, Inc. – “Uncovered 17 potential industries/business opportunities and 21 potential future customers”
  • RT Welding & Fabrication, Inc. – “Uncovered 21 potential industries/business opportunities other than mining and identified 13 potential revenue streams”
  • Taper Roller Bearings – “$10 Million in retained sales, $200,000 in cost savings, and $20,000 in new product development”

David Linger responded, “The Ohio Manufacturing Extension Partnership, located in Columbus, OH, provides technical services for small and medium-sized manufacturers to drive productivity, growth and global competitiveness; and can ultimately help Ohio’s manufacturers become more profitable and competitive. From October 2015 – September 2016, the Ohio Manufacturing Extension Partnership served 439 Manufacturers resulting in new and retained sales of   $277,900,000, created and retained 2,399 jobs, facilitated cost savings of over $41,700,000, and created new investments of $132,600,000.”

He commented, “An often overseen benefit of the relationship of a MEP and their regional clients is the two-way information exchange. That is, the MEP receives constant Voice Of the Customer information from the regional clients throughout the year. This allows the MEP to proactively develop new solution packages that meet those needs,  needs that are often unique to small and midsized manufacturing firms. This feedback loop drives the MEP to be current with the latest technology or methods and be an ongoing subject matter expert to push this new know-how back out to the manufacturing community. A few great examples of this are the work MEP’s are doing in regards to Cyber Security as it relates to manufacturing, Additive Manufacturing or 3D Printing, Data Analytics, and System Integration (Industrial Internet of Things, IIOT).”

Jim Watson responded, “Last year, CMTC was awarded a five-year agreement to be the California MEP. In 2016 CMTC served 1,065 small and medium-sized manufacturers, creating or retaining 8,575 high paying jobs statewide resulting in $169 million in cost savings, $647 million in total sales, and $305 million in total investment. For every manufacturing job, there are 3-4 full-time jobs created elsewhere in the United States to support manufacturers. Manufacturing is critical to the California economy, employing more than 1.2 million workers at more than 39,000 companies.”

He added, “CMTC’s services provide innovation, growth, technology and operational solutions that foster profitable growth for small manufacturers impacting personal income, tax revenues and the California economy. A study by the LAEDC Institute for Applied Economics indicated that the annual economic contribution from California MEP projects with customers surveyed in 2014 was an estimated $1.8 billion to California’s GDP and more than $450 million in federal, state and local tax revenues. The California MEP program is a valuable partner for manufacturers and generates a significant dividend for the State of California.”

There were four client case studies mentioned in their 2016 end of year report, which I have briefly summarized below:

Amflex Plastics – a woman-owned company making polyolefin co-polymer formulated plastic hoses and spiral hose equipment. Amflex needed help getting prepared to get their ISO 9001:2008 certification to retain current business and get new customers. After CMTC coaching, they passed their audit and got their certification, resulting in $675,000 in projected increased sales, $300,000 in retained sales, three new jobs, 10 jobs retained, and $209,000 in cost savings.

Summertree Interiors is a minority owned business that builds finely crafted baby and children’s furniture. The company needed help reducing lead times and improving on-time delivery. CMTC provided them with Lean manufacturing training, which resulted in:

  • $400,000 in increased sales
  • 1,000,000 in retained sales
  • 6 jobs created
  • 12 jobs retained
  • $250,000 in cost savings
  • $115,000 in capital investments

Space Systems Loral is a manufacturer of communications satellites and satellite systems. Because former customers are now making their own satellites, “SSL needed programs to reduce costs and lead times as well as provide an in-house team to lead and implement their continuous improvement philosophy. CMTC provided Yellow Belt Lean training and a “Train the Trainer” program, which resulted in $7,500,000 in retained sales, 17 jobs retained, $1,861,000 of cost savings, and $500,000 in capital investment.

OHIO Design is a builder of custom, made-to-order, modern furniture and interiors. The company needed help with their manufacturing processes, finding qualified workers, and access to capital. CEO coaching helped OHIO to understand and implement business metrics a cost structure to track their manufacturing expenses, and a continuous improvement program to focus on solutions to fix problems. As a result, they experienced $500,000 in increased sales, retained 7 jobs, achieved $150,000 in cost savings, and made $55,999 in capital investment.

One of the companies I represent as a manufacturers’ sales rep has been a repeat client of CMTC. President Steve Cozzetto of Century Rubber Company wrote me, “As the business climate has become more demanding, CMTC has been instrumental in providing the training that we need to remain competitive. In the past 10 years, we have used their resources and expertise to develop our Lean Manufacturing procedures, to upgrade our marketing methods, and most recently to take our quality program from ISO: 9001 and prepare us for our AS9100D certification which should occur this year. As a small company, the variety of programs offered by CMTC makes it possible to accomplish goals that would otherwise be difficult to achieve.”

These success stories illustrate why the nationwide Manufacturing Extension Partnership network is essential to the growth of the United States economy. When the President submits his budget, it is the first step in the long process that results in a federal budget. No President’s budget ever gets approved without substantial amendment by Congress, and Congress has the final say on governmental spending. To support the MEP program, you should contact your Congressional Representative to urge them to keep funding for the MEP program in the federal budget.

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SME and NASA’s HUNCH Partner to Engage Youth in Advanced Manufacturing

Tuesday, April 11th, 2017

With thousands of “Baby Boomers” retiring in the next decade and few new employees getting into manufacturing, manufacturers are worried about their futures. The industry is dealing with a severe shortage of workers equipped with the knowledge and skills needed to function in advanced manufacturing workplaces. Thankfully, schools are finally catching on that they are the first step to showing students the opportunities in advanced manufacturing.

SME has been working for years to bring back manufacturing education during a time when there is a big shortage of in-demand skilled talent in positions, such as mechatronics, programming, welding, CNC machining, metrology and more.

To help close the skills gap the “SME Education Foundation announced a new partnership with NASA’s agency-wide HUNCH (High School Students United with NASA to Create Hardware) program, to get more youth engaged in advanced manufacturing and ultimately encourage them to consider and pursue long-term careers in the industry.” This collaboration between HUNCH and the Foundation’s Partnership Response In Manufacturing Education (PRIME) initiative will give high school students an opportunity to build actual hardware that NASA astronauts, scientists, and engineers would use in their training programs and at the International Space Station (ISS).

Today, we have an estimated 600,000 jobs going unfilled because of the skills gap, but this could grow to two million by 2025 as “Baby Boomers” retire. This new collaboration will attract and introduce more high school students to career opportunities in the industry and prepare them to become the next generation workforce for jobs that are in high demand.

“By combining our PRIME network with NASA’s HUNCH program and working together to further expand the number of schools in the combined network, we can provide more students with access to a STEM and manufacturing focused education using hands-on learning experiences,” said Brian Glowiak, vice president of the SME Education Foundation. “Through this partnership we are motivating youth to consider careers in manufacturing and preparing them with the skill sets and knowledge to succeed.”

When I interviewed Brian last week to find out more about the partnership, he said, “PRIME connects regional manufacturers with local high schools to establish or build exemplary manufacturing education programs that prepare students for skilled careers in their communities. We work with schools to provide industry-driven training for teachers as well as curriculum for the students, while giving teachers and students access to real-world manufacturing equipment and resources.

This process begins by meeting with local manufacturers to gain an understanding of the current and future skills needed by their technical workforce and then working with the administrators and educators of the local school system to help develop a robust and sustainable hands-on training program for students. This program also provides students with opportunities to acquire industry recognized credentials and to benefit from job shadowing, internship and apprenticeship experiences.”

He explained, “Through the HUNCH program, PRIME students will have the opportunity to design and build actual hardware for in-flight astronaut training or for use aboard the International Space Station, bringing real-world project based learning experiences to the classroom. Alternately, HUNCH schools will now be part of the PRIME network, having access to SME student memberships, mentoring programs, and additional technical resources.”

When I asked when the SME Prime schools would start the program, he said, “We presently have 15 of our PRIME schools signed up for projects and eight have already received assignments and materials from NASA. In addition, SME is working with two HUNCH schools in Houston to start to integrate NASA’s HUNCH schools into our PRIME program. Ultimately, we have an opportunity to integrate 105 schools in this collaborative program, with 41 PRIME schools and 64 HUNCH schools. Simultaneously, we are working together to expand this network by adding more schools to the combined PRIME and HUNCH program in order to recruit and prepare more students for careers in engineering and manufacturing.”

He explained, “Manufacturing offers incredible and rewarding career opportunities with strong potential for advancement. Through HUNCH and PRIME we are not only building students’ awareness of these opportunities but also providing them with the skills and hands-on training needed for their future success. Moreover, giving students a chance to design and fabricate hardware for NASA and the potential opportunity to physically attach their signature to an item that could be used aboard the International Space Station is truly inspiring, both to the students and their teachers.”

I learned more about HUNCH from their website, which states that “the idea of HUNCH started when Stacy Hale, the JSC HUNCH project manager, had the innovative idea that maybe high school students could build cost-effective hardware that was needed to help train the ISS astronauts. Bob Zeek at MSFC [Marshall Space Flight Center] and Hale decided to test the feasibility of this idea. Many were skeptical about this idea, but because of the hard work and dedication of Hale and Zeek, HUNCH quickly expanded from 3 schools to numerous schools, in various states; the unique idea of HUNCH was quickly producing extremely positive results to all involved.”

In addition, the website states, “The NASA HUNCH team at JSC [Johnson Space Center]consists of four individuals who visit schools in a four state area that produce training hardware, software, videos and flight hardware and software for NASA. The HUNCH team at Marshall Space Flight Center consists of Bob Zeek, Kriss Hougland and others that visit schools within a five state area.

Under the mentorship of HUNCH personnel last year, “the schools produced stowage lockers, cargo transfer bags, 3 minute educational videos, and experiments proposed to fly on the ISS. They have designed and fabricated a disposable, collapsible, glove box, an organizer for crew quarters on the ISS, as well as black boxes and an EPM Rack. Over the past 8 years, since the beginning of HUNCH in 2003, hundreds of items for NASA have been produced by hundreds of students.”

When I interviewed Blake Ratcliff, NASA’s HUNCH Program Manager, last week, he said that he has been with the program about two years at the Johnson Space Center in Houston. He said, “Stacy Hale is still a Project Manager, and Bob Zeek is a mentor for schools in Huntsville, AL.”

Ratcliff said, “We have gone from making training mock ups to making actual tools and other hardware items that the astronauts use at the International Space Station and when they go on space walks. The students have also made metal lockers in which the scientific payloads are put for the research the astronauts and scientists conduct on the space station.”

He explained, “It is a project based program. We give schools real NASA projects that meet the needs and provide them the materials and instructions they need to complete the work. Quality is the most important aspect of the work, and the schools have done an outstanding job. Every year in April and May, we have Recognition Ceremonies for all the students and teachers that have participated in HUNCH at MSFC and JSC. The students present their projects during the HUNCH Ceremony where some projects are selected to be used in NASA systems and on board the ISS. Every year the number of participants continues to grow as well as the quality, quantity, and diversity of the products that students fabricate.”

When I asked if every school has a project, he said, “There is a wide range of build-to-print, design and prototype projects, but they also have software, communications, and culinary projects. We have a competition every year where students can come up with a new food for the astronauts. This year it is for a new dessert. The winner’s food gets flown up to the space station.”

I told him that I am surprised I had not heard about their program previously because I keep up with news about STEM education programs to attract the next generation of manufacturing workers. He said, “While we get a fair amount of press, it is mostly in local news outlets for the cities where our HUNCH schools are located.”

He added, “There are a couple of people working to do a documentary on HUNCH. We are growing so fast that we don’t need a lot of attention. It is good to publicize what we are doing, but we have been growing by word of mouth and don’t need to advertise for growth. It’s going to take a couple of years to integrate all of the PRIME schools into our program, so we won’t be actively seeking new schools for awhile.”

I asked if they have any schools in California. He said, “We just started in the Bay area and are about to sign up several schools. I asked how a school could get involved, and he said. “Go to the website and apply for a project. Then, one of our mentors will visit the school and determine if it would be a good fit and if they have the facilities to complete a project.”

Both the SME PRIME initiative and NASA’s HUNCH program are promoting student interest in STEM (Science, Technology, Engineering, and Mathematics.) Another benefit is that while students are building hardware and doing other projects for NASA, they are also building their interest as engineers, researchers, scientists and maybe even astronauts, as well as their self-esteem. HUNCH is a win-win innovative solution for inspiring the next generation of researchers, scientists, engineers, and manufacturing workers while providing cost-effective hardware for NASA.

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Why Universities are Important to Rebuilding U.S. Manufacturing

Wednesday, March 8th, 2017

The fact that more and more manufacturers are returning manufacturing to the U. S. or keeping manufacturing here instead of moving to Mexico or Asia is good news, but on February 23, 2017, President Trump met with two dozen manufacturing CEOs at the White House.

While they “declared their collective commitment to restoring factory jobs lost to foreign competition,” some of the CEOs “suggested that there were still plenty of openings for U.S. factory jobs but too few qualified people to fill them. They urged the White House to support vocational training for the high-tech skills that today’s manufacturers increasingly require…The jobs are there, but the skills are not,” one executive said during meetings with White House officials that preceded a session with the president.”

“We were challenged by the president to … come up with a program to make sure the American worker is trained for the manufacturing jobs of tomorrow,” Reed Cordish, a White House official, said after Thursday’s meetings.”

Training today’s workers in the skills they will need for the jobs of the future in manufacturing is important, but we also need to educate the next generation of manufacturing workers. We need more engineers to rebuild American manufacturing, and universities play a key role in providing this education.

Last week, I had the opportunity to interview Dr. David B. Williams, Executive Dean of the Professional Colleges and Dean of The College of Engineering at The Ohio State University, located in Columbus, Ohio, to discuss the role universities are playing in rebuilding manufacturing and educating the next generation of manufacturing workers.

His official biography on the University website states, “Williams is involved in many university-industry economic development partnerships. He serves on the boards of ASM International, the State of Ohio’s Third Frontier Advisory Board, Lightweight Innovations for Tomorrow (formerly American Lightweight Materials Manufacturing Innovation Institute), Columbus 2020, Metro Early College STEM School, EWI, Ohio Aerospace & Aviation Council, and the Transportation Research Center.”

Dean Williams said, “Ohio State University is a manufacturing R&D and training Powerhouse. Manufacturing is a critical part of the state of Ohio’s economy and accounts for 17 percent of the state’s GPD. It is also the state’s largest industry sector. We have partnered with over two hundred manufacturers in developing and funding research that can be used in their industries. It is a very important part of the college. We use the talent of our professors, graduate, and undergrad students and technology. OSU is committed to innovating applied research for product design, technology commercialization, and manufacturing for industry through its programs.”

Dean Williams mentioned that on October 1, 2016 the Center for Design and Manufacturing Excellence (CDME) was designated as a new Manufacturing Extension Partnership (MEP) affiliate organization, and that Ohio State’s MEP program will work directly with manufacturers to identify and execute growth strategies. Afterward, I was provided with information that states: “The Ohio State University’s Center for Design and Manufacturing Excellence (CDME) will receive up to $8.6 million in federal, state and industry funding over the next five years to lead a program facilitating growth of small- and mid-sized manufacturing companies in the 15 county central Ohio region. The program is funded by the National Institute of Standards and Technologies, with matching funds provided by the Ohio Development Services Agency, which administers operations through seven regional affiliates.”

I found the information about Central Ohio’s manufacturing interesting very interesting: “The central Ohio manufacturing economy is comprised of approximately 3,350 self-identified manufacturing companies across the 15 Central Ohio counties. More than 90 percent of them have 50 or fewer employees. Many small and medium-sized manufacturing companies are aware of the growth challenges they face, but still require assistance to overcome them.” The size of companies is similar to San Diego County, in which 97% have fewer than 50 employees.

Dean Williams told me that the Center’s Executive Director, John Bair, is a successful entrepreneur, not an academic, and added that they had invited him to head up the Center after he had sold his company and semi-retired.”

He added, “We invite manufacturers to bring their problems to us, and then we put together teams of experts to work with them to solve these problems. The company gets to keep any of the Intellectual Property developed in the process of working together.

Dean Williams also said that Ohio State is home to the Ohio Manufacturing Institute, which “serves as a public policy mechanism for manufacturing within the state and nationally that facilitates the use of available technical resources for economic development.” He said, “OMI acts like a clearinghouse for Ohio to provide manufacturers with the tools they need to collaborate with a statewide network of technical resources. Its state and national policy recommendations reflect a thoughtful response to industry problems and issues OMI also engages in outreach programs that support manufacturers—from small to medium-size firms to original equipment manufacturers—by aligning with industries, academic institutions, technology support organizations and government.”

As an example, Dean Williams said, “We have had a long relationship with Honda since they moved to Marysville in 1978, which is about 45 miles northwest of here. About five years ago, we started partnering with Honda to help them develop solutions to some of their manufacturing problems. Their high-end NSX brand is currently made with advanced engineered materials and is produced at only a rate of 7-8 vehicles per day. They want to produce the Accord using the same materials and technology. At the Center, we have put together teams of experts to solve this problem.”

Dean Williams said, “Hundreds of students study abroad for part of the education. Their experience abroad strengthens their performance and helps train the people necessary to maintain and repair the machines. They are still lots of manufacturers in Ohio. We graduate about 2,000 engineers per year and about half of them stay in Ohio. There are 14 engineering colleges in Ohio, and we have the educational base to drive the 21st Century manufacturing.” Since the U.S. is only graduating about 50,000 engineers a year compared to the estimated 500,000 per year in China, Ohio State University is doing more than their fair share.

With regard to the next generation of manufacturing workers, he said, “A big part of the problem is that parents think manufacturing is like what it was in the past, so they don’t want their children to get involved in manufacturing. I was at SpaceX recently and met the chief welding engineer, and she was a graduate of Ohio State with a degree in welding. Young men and women can even get a Masters Degree in ‘joining’ through Ohio State’s online welding engineering master’s program: https://online.osu.edu/program/mswe. This discipline includes a deep understanding of the properties and testing of materials that can be welded.”

He said, “We are part of seven of the National Networks of Manufacturing Innovation (NNMIs). One of them is LIFT, which I looked up and found that it is “an industry-led, government funded consortium. By reimagining processes and procedures, the highly linked and leveraged network is facilitating technology transfer into supply chain companies and empowering the lightweight metals workforce.” Ohio State University, the University of Michigan in Detroit and EWI are the founding members of this NNMI consortium that was established February 25, 2014 following a competitive process led by the U.S. Department of Defense under the Lightweight and Modern Metals Manufacturing Innovation (LM3I).

Dean Williams stated, “We also partner with the community colleges under an economic grant program to develop the existing workforce through continuing education. Overall, through a variety of programs and camps, we interact with 70-80 high schools on a semi-regular basis. One program is Hometown Ambassadors, where students talk to younger students at their High School alma maters to help them understand the opportunities in manufacturing today.”

Since Dean Williams is on the board of ASM International, it was fitting that Ohio State University’s Department of Materials Science and Engineering hosted the ASM Education Foundation’s Materials Camps for two years (2013 and 2015). These one-week training camps provide the opportunity for high-school teachers to work hands-on with metals, ceramics, polymers and composites and learn how to incorporate these activities and demos into their science classes.

The Lightweight Innovations for Tomorrow (LIFT) was a partner with ASM International and the ASM Educational Foundation for the 2015 camp. “Curriculum content on the use of lightweight metals and new technologies [were] integrated into the programs at 45 camps around the nation…designed to enrich, stimulate and enhance the technical competence and teaching skills of middle and high school STEM teachers.”

Summer camps for teachers and students are important to attracting the next generation of manufacturing workers. More universities need to get involved with the summer camps and other programs of ASM International, the National Association of Manufacturers’ Manufacturing Institute “Dream it. Do it” program, and Project Lead the Way.

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San Diego Tackles Housing Affordability and Skills Gap for STEM Careers

Tuesday, January 31st, 2017

Workforce development is critical to San Diego’s economy, so this topic was featured at the 33rd Annual San Diego County Economic Roundtable I attended on January 19, 2017. After the two presentations by the two economists covered in my last article, the next presenter was Tina Ngo Bartel, Director of Business Programs and Research for the San Diego Workforce Partnership, which has about a $40 million budget. She said, “My department does the research for new programs and then implements them. We did research on small business and found that 95% have fewer than 50 employees. We collaborate with the San Diego Employers Association to provide H.R. services for small businesses and have set up a free hotline for help on such topics as Workers Compensation, changes to labor law and wages, termination, employee discipline issues, etc.”

She described a new program they have to connect employers with job seekers instead of doing all day job fairs. They are doing Hiring Happy Hours at a local brewery where job seekers and employers can connect in a more informal, fun atmosphere. They are customized and targeted to specific industries, such as health care and manufacturing.

Next, she described their Connect2Careers program, which is “a summer employment program that addresses San Diego’s ongoing skills gap by providing meaningful work experiences that prepare young adults ages 16–24 for in-demand jobs. By aligning the career aspirations and educational backgrounds of young adults with businesses committed to developing our emerging workforce, C2C creates a positive experience for both employers and youth.”

Ms. Ngo Bartel said that they had released a report on Apprenticeship programs in November 2016. San Diego County has employers in a variety of industries that sponsor or participate in apprenticeship programs. According to the report, specialty trade contractors and local government provide the most apprenticeship opportunities. SDWP is working with the building industry on an apprenticeship career pathway in which there is no cost to the participants for the training and employment. At the end of the apprenticeship, there is guaranteed employment. She also said that the Urban Corps has a pre-apprenticeship program for youth without a high school diploma.

She stated that Able-Disabled Advocacy (A-DA) received a federal grant in November 2015 to develop apprenticeship programs for occupations that do not traditionally have registered apprenticeships in the region: project managers, computer support specialists–networking, and computer support specialists–cyber security (i.e., project management, ICT). The Able-disabled Academy offers an ICT program training in ICT skills.

She added, “San Diego has the first life science apprenticeship program in the nation created by Miramar College in partnership with Rx Research Services.” The press release of January 29, 2016, stated, “San Diego Miramar College will receive a $600,000 Innovative Apprentices for the Life Sciences Industry grant to grow the number of apprenticeships in nine areas: microbiology quality control technician; chemistry quality control technician; regulatory compliance associate; regulatory affairs specialist; clinical research coordinator; quality assurance associate/GXP auditor; clinical trial assistant; drug safety advocate; and clinical data coordinator. Miramar College, home of the Southern California Biotechnology Center, will be the lead education agency in partnership with Rx Research Services Inc., the apprenticeship sponsor.”

She concluded by saying that the SDWP will be doing an update on San Diego’s priority sectors of Advanced Manufacturing, Clean Energy, Health Care, Information and Communication Technologies, and Life Sciences and will release the report at their Workforce Conference in November 2017.

The lack of affordable housing in California’s metropolitan areas of San Francisco, Los Angeles, and San Diego has reached crisis status. Historically, San Diego salaries have been substantially lower than the other two regions, so it has become even more critical. The median home price hit $507,500 in November 2016, up 11 percent from a year ago. Rents have been escalating due to the high demand and limited supply of affordable homes. Both of these factors are impacting employers being able to recruit skilled workers from other parts of the country and impacting our region’s ability to keep new college graduates in the region.

This is why the next speaker was Deborah Ruane, Executive V. P. and Chief Strategy Officer of the San Diego Housing Commission, whose mission is “To provide affordable, safe and quality homes for low-and moderate-income families and individuals in the City of San Diego and to provide opportunities to improve the quality of life for the families that the San Diego Housing Commission serves.” The SDHC website includes this statement as part of its mission: “Become a national model in initiating and implementing new, progressive ideas to address affordable housing needs across the country.”

Ms. Ruane said, “Our Board of Directors asked me to find out why it was so expensive to build affordable housing. It costs $300,000 per unit.” She said that one problem is that they have constraints from many of their funders for housing, such as must have solar, must be near a school, near public transit, look as nice as neighborhood, all of which add to the cost. Economist Lynn Reaser of Point Loma Nazarene College estimates the costs related to government are $40 billion. This impacts our regional GDP in the amount of $2.4 billion.

She explained, “We started with the McKinsey Global Institute report, ‘Tackling the Affordable Housing Challenge” and came up 60 factors that affect cost, most of which are related to local, state, and Federal government. We narrowed the list down to the top 11. The first eight are within San Diego’s purview to change. One is related to state government, and two to the Federal government.” The list is:

  1. Set annual production goals
  2. Incentivize more 80/20 development
  3. Defer development fees
  4. Reduce parking requirement
  5. Reduce commerce space requirements
  6. Unlock land and increase ground leases
  7. Approve community plans with Master Environmental Impact Report
  8. Support California Environmental Quality Act reform
  9. Increase state and Federal resources
  10. Align state oversight
  11. Increase State and Federal resources

She said that McKinsey was so impressed with the work they were doing that they issued a subsequent report in October 2016 on “Closing California’s Housing Gap,” which “provides a tool kit for fixing a chronic housing shortage in the world’s sixth biggest economy.”

She concluded saying, “If we can make these changes, the City could reduce the costs of market rate housing by $54 million and by $23 million for affordable housing. We have made movement on nine of the issues, and we will issue a year-end report next month.”

The next speaker was Gina Campion-Cain, CEO of American National Investments. Her presentation was focused on the commercial real estate market. The most interesting points of her presentation with regard to my focus on manufacturing is that corporate campuses are being developed with rich amenities for employees, such as fitness centers, restaurants, coffee stops, and “grab and go” marketplaces. She also touched on the changes in the design of open office floor plans instead of cubicles to facilitate more collaboration among workers.

The last speaker was Matt Doyle, Ed.D, Assistant Superintendent of the Vista Unified School District who spoke on “Innovation in Education – Addressing Student Engagement and Lifelong Success.” Dr. Doyle said the Vista school district has 22,000 students of which 10% are homeless, some since kindergarten, who are now getting “full-ride” scholarships. (Vista is located about 30 miles northeast of the City of San Diego.)

Highlighting the most important points of his presentation, he stated, “The biggest education issue is student engagement. In our school district, student engagement drops from 76% in elementary school down to 44% in high school. When I started four years ago, I had conversations with about 2,000 students. I took all of the words students had to say about school and put them in a program called ‘Wordle’ and the one that came up was ‘irrelevant.’ It is a similar trend around the country.”

He stated, “To resolve the engagement issue, we need to re-imagine education and develop work-ready talent using a Strengths-based Education Model. It’s not about preparing for college, but more about preparing students for careers. We are using tools used by industry and work with business partners of the Vista Innovation Center. We use technology as an infrastructure and are one-to-one in devices for students.”

He explained, “The goal is to be a self-regulated learner. We create a personal learning pathway for students and develop a student profile. We have developed a competency-based program so as soon as student demonstrates their knowledge in a subject, they can move on. What we are finding is many of our students are able to move into college classes as a junior or senior. The goal is to prepare the student or the pathway…not the path for the student.”

Continuing, he said, “Students are working alongside teachers. We are creating opportunities for students to learn. Our learning environment is different. A teacher is no longer at the front of a class with rows of student desks. At the center of student success is the concept of collaboration. It’s a brave new world. We are trying to move beyond the traditional mindset.” Dr. Doyle stated, “The results in our super school have been a  99% reduction in disciplinary incidents, a 50% reduction in absenteeism, 62% of increasing GPA by one percentage point in half a year, a 27% reduction in ‘Ds’ and a 33% reduction in ‘Fs’.”

He concluded saying, “We are reaching out to business and having meaningful conversations about essential skills. Clean energy is one of the priority sectors in north San Diego County along with advanced manufacturing. This is part of a project called the Talent Cities Solution to narrow the talent gap and feed the talent pipeline. We are working with Solatube in the clean technology field, and middle school students are having conversations about what skills are needed in that industry. We are trying to ‘marry’ companies with students so they students can be employable when they finish their education. We want to help companies “on-board” students. We are creating learners that are flexible and nimble because that is what industry needs.”

Public/private collaborations that incorporate new ideas and innovative  programs for solving the housing affordability crisis, solving the skills gap in workforce development, and educating the next generation of youth for STEM careers make San Diego a role model for other regions.

 

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ToolingU-SME Report Reveals Manufacturers Are Not Addressing Skills Gap

Wednesday, December 14th, 2016

In 2011, I attended the imX Expo (interactive manufacturing eXperience) in Las Vegas when Tooling U-SME ” announced their Mission Critical: Workforce 2021 initiative and “sounded the alarm that the future success of manufacturing is at risk by the end of the decade if industry does not address the growing skills gap.” The event was sponsored by SME (formerly the Society of Manufacturing Engineers) and the American Machine Tool Distributors’ Association (AMTDA).

At that event, Tooling U-SME, “the world’s leading provider of training and workforce development solutions for manufacturing companies and educational institutions,” introduced a free one-of-a-kind “Workforce 2021 Assessment” tool for companies to use to assess and gauge their company’s performance because they had identified that there would be a critical shortage of skilled workers by 2021 that would threaten the future of manufacturing in America. “By answering a short series of questions about a company’s knowledge retention, readiness of future skill requirements, and the status of employee development programs, a company is able to assess their ability to meet current and future workforce challenges.”

In a September 5, 2016 commentary in The Hill contributor Grant Phillips wrote that the National Association of Manufacturers found there are “600,000 unfilled jobs in manufacturing primarily due to a lack of skilled labor. It is this skills mismatch that plagues the US labor market…”

On September 8, 2016, ToolingU-SME, released a report that showed the progress towards achieving the goal of the Mission Critical: Workforce 2021. Based on five years of insights from the Workforce 2021 Assessment tool, the report states, “the results are not encouraging. Responses show there has been little advancement. While it’s not too late, companies must take action now to ensure a healthier next decade.” The report quotes from report, “The Skills Gap in US Manufacturing: 2015 and Beyond” by Deloitte and The Manufacturing Institute, which states, “Over the next decade, nearly 3.5 million manufacturing jobs will likely need to be filled. The skills gap is expected to result in 2 million of those jobs remaining unfilled.”

ToolingU-SME Vice President Jeannine Kunz wrote in the cover letter, “only a very small number of worldclass organizations are prepared for the extreme talent gap predicted by the year 2021. Some of these companies started planning years ago to address the coming labor shortage. Others were forced to take reactionary steps when faced with a shrinking employee pool. Regardless, they started formal training programs, introduced apprenticeships, built relationships with educators and more…At Tooling U-SME, we are concerned that more manufacturers aren’t taking action since this has a big impact on the long-term health and competitiveness of the industry as a whole. There is a false sense of security among many manufacturers who are not recognizing these future challenges or investing in the development of their workforce today.”

The companies that responded to the survey fall into five categories:  procrastinator, strategist, role model, and visionary.

The procrastinators nearly make up the majority of the respondents because 49% said that “their company has not begun assessing their manufacturing employee’s current skills against skills they will require in the future.” In fact, only “1 out of 20 (5%) acknowledge conducting a complete assessment of all staff.” Since “nearly 9 out of 10 respondents (88%) said their company is having problems finding skilled works in manufacturing,” you would think there would be more urgency to address this problem. This problem will only get worse because “14% of respondents say they will lose a full quarter (25%) or more of their workforce to retirements in the next five years.”

The highlights of the report are:

  • “Key findings from responses to the survey from manufacturers of all sizes
  • Insights on business pains, such as hiring needs, training resources, mentoring and talent development
  • Best practices to immediately start ensuring your workforce is ready for the next decade”

The key findings are:

  • “Less than one-third (29%) of respondents would characterize their company’s talent development as good or excellent”
  • “30% say their company has no community involvement (internships, co-op, etc) to help develop the proper skills of their incoming workers.”
  • “54% don’t budget for employee development”
  • “33% say their job-related training options are minimal”
  • “88% say their company is below average when it comes to offering outside resources to upgrade the skill sets of employees”

While 74% agree that training needs in the organization impact a wide range of levels throughout the company…3 out of 4 (75%) say their company does not offer a structured training program on manufacturing skills. In addition, “less than half (45%) say their company has personnel designated to manage training and employee development.”

The report identifies issues related to the skills gap that need to be addressed immediately:

  1. Incoming employees — finding them
  2. Incoming employees — training them
  3. Incumbent workers — upgrading their skills to keep up with changing technology

With regard to finding manufacturing employees, I commented that we need a national manufacturing database of skilled workers when I gave my presentation on how to solve the skills shortage to the Cincinnati Chamber of Commerce. Many workers that have been laid off due to transferring manufacturing offshore or plant closures have no idea where to go to find a new job in manufacturing. They take lower-paying jobs outside of manufacturing because they can’t uproot their family on the chance they could find a job at a manufacturer in another city.

The ToolingU-SME report urges manufacturing to establish training programs for both incoming workers and incumbent workers to upgrade their skills. The report identifies the following six steps for companies to take to get started immediately:

  1. “Build a business case for learning with senior management. Involve the right stakeholders in discussions and tie learning to performance so you can measure the results later. It is important to set expectations, get buy in and gather support for the program early on.
  2. Define and update your job roles with the required knowledge, skills and abilities needed to build strong performance on the job. This competency-based learning approach will lead to the positive return on investment (ROI) your stakeholders expect.
  3. Build career progressive models, showing growth from entry level to more senior levels. This modeling effort will improve employee engagement and retention, and allow the alignment of skills to pay.
  4. Benchmark incumbent employee competencies through knowledge and skills-based assessments to determine gaps in performance and build a training strategy to address them.
  5. Design a custom competency-based training curriculum using blended learning that consists of online and on-the-job training as well as other performance support.
  6. Ensure performance standards are measurable and trackable. These standards will validate you ROI investment.”

What struck me is that all of these steps are integral to a company becoming a Lean Company. They are nearly identical to the requirements of “Talent Development” that are incorporated into the journey of transforming a company into a Lean company. It would appear that from this survey that the majority of manufacturers have not begun their journey to becoming even a Lean manufacturer, much less a Lean Company.

My recommendation is to start by using the free Assessment tool of ToolingU-SME. Then you can decide what steps to take next. If your workers need specific manufacturing skills certification, then check out the classes offered by ToolingU-SME, either online or on-site.

Another source for training is the Manufacturing Extension Partnership Program (MEP), which is “a national network with hundreds of specialists who understand the needs of America’s small manufacturers. The nationwide network consists of manufacturing extension partnership centers located in all 50 states and Puerto Rico. MEP provides companies with services and access to public and private resources to enhance growth, improve productivity, reduce costs, and expand capacity.” Locate your nearest MEP here. The MEPs have a variety of training programs that are available at reduced cost to manufacturers. The California Manufacturing Technology Consulting (CMTC) is the designated MEP for California, and they offer training in Lean manufacturing and many other subjects that would incorporate the above steps.

In California, companies can apply directly for a training grant from the Employment Training Panel (ETP) to help defray the cos of training or they can join an active ETP Multiple Employer Contract (MEC).

Many community college systems around the country offer training in specific manufacturing skills. California also has nine Centers for Applied Competitive Technology funded by the Chancellor’s Office of the Community College system, which provides training in specific manufacturing skills as well as Lean Manufacturing.

A number of community colleges actually use the ToolingU-SME courses instead of developing their own curriculum. I have discussed some of the training offered at community colleges in California and other states in previous articles I have written. You can peruse these articles under the Training and Workforce Development categories on my website:  www.savingusmanufacturing.com.

As more manufacturing is reshored to America, it will be even more critical to have the skilled workers we need to make American manufacturing great again. Do not procrastinate any longer on addressing this important problem.

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Cincinnati Focuses on Re-industrialization to Create Prosperity

Thursday, December 8th, 2016

Last week, I spent two and a half days in Cincinnati, Ohio as the guest of Source Cincinnati, an independent, multi-year national social and media relations initiative that works to enhance perceptions of Cincinnati as a world-class Midwestern region. I met with Julie Calvert, Executive Director, during my visit, but my personal guide and host was Paul Fox, VP of Strategic Initiatives at Proctor & Gamble and “Executive on Loan” to Source Cincinnati for a year.

From Mr. Fox, I learned that Cincinnati is the third largest city in Ohio and had such interesting nicknames as “Porkopolis” in the past because it was the largest pork packing center in the world and the “Queen City of the West,” for its ideal location on the Ohio River and its rich culture and heritage of a predominantly German population who settled Cincinnati in the late 1700s.

After arriving late Tuesday afternoon, Mr. Fox and I had dinner with David Linger of TechSolve, and Scott Broughton, Center Director for Advantage Kentucky Alliance at the WKU Center for R&D at Western Kentucky University in Bowling Green, KY. TechSolve is a 30-year old consulting firm that is a State of Ohio Manufacturing Extension Partner (MEP) affiliate, and Advantage Kentucky Alliance (AKA) is the MEP for Kentucky. Mr. Linger just took over the reins as President and CEO on September 1, 2016 after Gary Conley retired from 20 years of service.

Mr. Linger, said “There are about 2,500 manufacturers in the Ohio region of metropolitan Cincinnati, and Cincinnati used to be known as the “Machine Tool Capital of the U. S.”, but very few machine tool companies exist today, including its most well-known machine tool company, Cincinnati Milacron,” after its machine tool line was sold to Unova. TechSolve provides manufacturing and health care consulting. It has a focus and strength in process improvement, machining, and innovation — applying these skills to help businesses find long-term solutions and promote problem-solving cultures.

Mr. Broughton said, “AKA is a not-for-profit partnership that provides assistance and training to help manufacturers of all sizes grow, improve their manufacturing and business strategies and processes, adopt advanced technologies, increase productivity, reduce costs, and improve competitiveness. Manufacturing in Eastern Kentucky was mainly related to the coal mining industry, and two-thirds of the companies have gone out of business. We have focused on helping the remaining manufacturers to understand their core competencies to market to new industries, such as aviation and automotive. Our services include:  business growth services, continuous improvement services, and workforce solution services.”

On Wednesday morning, we had breakfast with Laura Brunner, President/CEO, and Gail Paul Director of Communication Strategy of the Port of Greater Cincinnati Development Authority. She told me that the Port Authority was established by the City of Cincinnati and Hamilton County in 2001 and is the second largest inland port covering 26 miles from the Indiana/Ohio border. In 2008, the Port Authority was reformed and empowered to take a leadership position in regional economic development. It is a quasi-public agency that operates collaboratively with dozens of economic development, community and corporate partners.

Ms. Brunner presented me with a report prepared for me, titled “Manufacturing in the Greater Cincinnati Region. As background, “The Port Authority leverages its infrastructure strengths and development-related expertise to design and execute complex projects to improve property value, catalyze private investment and promote job creation.”

I was astounded when she told me, “The Cincinnati region has lost 67% of its manufacturing jobs.” The report states, “Manufacturing was a primary component of Cincinnati’s economy until its peak in 1969 when 43 percent of the workforce in Hamilton County was employed in manufacturing jobs. Today, lower-wage service-providing jobs far outnumber manufacturing jobs by about 7:1…From 1969-2015, the number of people employed in manufacturing decreased from 146,000 to 48,000.”

She said that the Port Authority Board of Directors has established a vision to transform Cincinnati to prosperity by 2022 through “repositioning undervalued properties and re-building neighborhoods.” The report she gave me states that the strategies for success are:

  • “Industrial Revitalization – redevelopment of 500 acres of underutilized industrial land along key transportation corridors
  • Neighborhood Revitalization – transform ten communities for lasting impact, including residential properties and commercial business districts
  • Public Finance Innovation – cultivate a nationally-recognized public finance program that supports economic and community development efforts

The projected Return on Investment for these strategies is:

500 industrial acres redeveloped 10 revitalized communities
8,000 new jobs 300 quality homes
$565 million in annual payroll 50 commercial acres with 400K SF
$550 million in capital investment 130 new businesses
$8 million in income taxes Increased property & income taxes
$14 million in real estate taxes Improved lives of residents

In June 2015, the PGCDA Board approved establishment of the industrial and neighborhood strategy, development of internal resources, communication strategy, and the financing and fundraising plan to support the strategies.”

The report states, “The proposed redevelopment of approximately 2,000 acres of industrial land through Hamilton County for Manufacturing uses will have a considerable impact on the Greater Cincinnati Region.”

The first sites for the Redevelopment Pilot program have been selected, and the first funds have been obtained for acquisition of land parcels, demolition/remediation of existing buildings, and site preparation. The first site is assembled and is scheduled to open in 2017.

In the meeting with Ms. Brunner and Paul, I was also provided a “Manufacturing Attractiveness Study” by Deloitte Consulting LLP presented on October 3, 2016 to the Greater Cincinnati Port Development Authority, TechSolve, and Cushman and Wakefield.

The study states, “The current lack of easily developable real estate (cleared, access to utilities, free from environmental concerns, etc.) in the Cincinnati area likely puts the city at a significant disadvantage for attracting manufacturing investments.

The Port Authority’s operations focus on transportation, community revitalization, public finance and real estate development makes it especially well-equipped to evaluate and address opportunities to redevelop and reposition sites formerly occupied by industrial operations.”

The Port Authority seeks “to achieve the following objectives:

  • Analyze the last 5 years of manufacturing deployments in the Ohio Region (Ohio and surrounding states)
  • Understand trends in urban manufacturing through case studies
  • Identify demand-side location factors that drive location decisions in the advanced manufacturing, food and flavoring, and Bio-Health (Life Sciences) industries
  • Understand the strengths/ weaknesses of Cincinnati as business location”

In analyzing the Manufacturing Investments for the Ohio Region from 2011-2016, the study revealed:

States # of Project Announcements Capital Investment Jobs Created
Indiana 350~ ~$13.4 ~37,000
Ohio 271 ~$17.6 ~34,000
Kentucky 230 ~$9.0 ~24,000

“Indiana, Ohio and Kentucky saw the most number of project announcements along with largest amounts of capital investment over the past five years.”

“The majority of the manufacturing investments in Ohio over the past 5 years are spread throughout rural areas within commutable distances of large metropolitan areas (Cincinnati, Dayton, Columbus, Akron and Cleveland.) Based on FDI data, 14 manufacturing projects were announced in Cincinnati within the past 5 years.”

The Deloitte study stated “Advanced manufacturers are highly interested in labor quality and availability as well as minimizing risk related to site development and neighboring use concerns.” The two highest factors are: “Labor Quality and Availability (engineers, technicians and operators) and Real Estate (Site readiness, Capacity and availability of utilities, and Neighboring use/pollution). Labor quality, labor availability and supply chain tend to be the key drivers for food industry in making location decisions.

The study showed that “A 1-hr drive time from downtown Cincinnati allows access to a significant labor force, with over 2.5 million in population.” The manufacturing industry represents 14.34% of the Cincinnati Metro economy. Persons with Associate degrees (20.12%), Bachelor degrees (11.97%), and graduate degrees (8.42%) represent 50.51% of the population, and another 45.71% of workers have a high school diploma (26.08%) or some college (19.63%).

Other advantages are: “When compared to the states surrounding Ohio, Ohio has a relatively low average industrial electricity price;” and “Cincinnati is located right in the heart of the most utilized truck routes in the country and has a relatively low percentage of roads requiring significant maintenance when compared to nearby states…”

The summary findings of the report were:

  • “Cincinnati has an advantage in the presence of industrial engineers, machinist and tool/ die makers, as well as a large supply of lower skilled production workers, giving the area a talent proposition to attract manufacturing deployments
  • However, a key driver of the evaluation process for manufacturing deployments is developable sites… Cincinnati currently lacks suitable real estate options to entice most manufacturing operations
  • Given Cincinnati’s availability in key manufacturing skill sets and low/average cost in several talent segments, an investment program to prepare site options would enhance its ability to attract manufacturing investment.”

Our next meeting was with Kimm Coyner, V. P. Business Development & Project Management of REDI Cincinnati, which was spun out of the Cincinnati Chamber in 2014 with the support of Jobs Ohio. REDI Cincinnati covers 15 counties ? five in Southwest Ohio, seven in northern Kentucky, and three in Southeast Indiana, through which the Ohio River runs in the center.

Ms. Coyner said, “REDI is solely focused on new capital investment and attracting and expanding manufacturing to create good paying jobs. We have 165 public and private members. Our team identifies opportunities to attract businesses to the region by developing relationships with companies and new markets – domestically and across the globe. We provide connections to the resources that take startups to the next level and grow existing businesses. We connect companies to the region’s assets, advantages and business leaders to secure Greater Cincinnati’s place as one of the world’s leading business centers.”

She told us that railroads were the key to industrial development of the region in the 19th Century to provide transportation beyond the river. She said, “While Cincinnati arguably stayed too long in the manufacture of carriages and missed out on being a primary automotive manufacturing center like Detroit, we remain a major tier 1 supplier to that industry with hundreds of manufacturers and a significant talent base. We have five key industry clusters:  Advanced Manufacturing, Information Technology, Food and Flavorings, BioHealth, and Shared Services. Advanced Manufacturing is made up of automotive, aerospace, chemicals and plastics and additive manufacturing/3D printing. Our region is the #1 supply state to Boeing and Airbus. We have nine Fortune 500 companies headquartered in Cincinnati, and four of the nine are manufacturers: AK Steel Holding, Ashland, Kroger and Procter & Gamble.”

I was subsequently emailed a list of the top ten employers, nine of which are manufacturers:

  • Kroger 21,646 employees
  • GE Aviation – 7,800 employees
  • AK Steel Holding Corp. – 2,400 employees
  • United Dairy Farmers – 2,029 employees
  • Ford Motor Co. – 1,650 employees
  • Mubea NA – 1,360 employees
  • Bosch Automotive Steering – 1,300 employees
  • Intelligrated Inc. – 1,100 employees
  • Hillenbrand Inc. – 1,080 employees
  • Milacron LLC – 1,020 employees

She added, “We participated with JobsOhio in a booth at the IMTS show in Chicago and focused on promoting Cincinnati as a site destination to companies from Germany.” She noted that Cincinnati has the second largest Oktoberfest outside of Munich, Germany. I told her that we have a strong German-American club in San Diego that puts on a good Oktoberfest featuring a band they bring from Germany.

It is obvious to me that Cincinnati leaders recognize the important role that manufacturing plays in a local and state economy. I had mentioned to everyone I met that manufacturing is the foundation of the middle class, and if we lose manufacturing, we will lose the middle class. Cincinnati learned this lesson the hard way, but I am confident that their new vision to re-industrialize Cincinnati will create good paying jobs for residents and restore prosperity to the Cincinnati region.

I was honored to be invited to give a presentation on “How to solve the skills shortage and attract the next generation of manufacturing workers” that was based on several articles I have written in the past four years (all are available at www.savingusmanufacturing.com under Workforce Development category). If Cincinnati’s leaders achieve their vision, more skilled workers will be needed. Specific recommendations I made were: (1) start to engage youth in middle school through summer camps, and robot contests (2) provide career technical pathways in high schools and community colleges, plan a Maker Faire, promote establishment of a Maker Place, and become more involved in future Manufacturing Day (www.MFGDAY.com).

These meetings provided so much information that I will devote my next article to my visits to local manufacturers:  GE Ceramic Matrix Composite Laboratory at the GE Aviation plant in Cincinnati, Balluff North America in Florence, KY, and TSS Technologies in West Chester, OH, as well as the Center for Intelligent Maintenance Systems at the University of Cincinnati.

 

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