What is the State of the Manufacturing Economy?

January 19, 2016

Today our growth is limited by our inability to acquire skilled workers. In the last recession, we were held back by lack of demand for our customer’s end products. Today, we cannot find the skilled people that we require to operate new high tech equipment that is needed to make the high precision parts we produce. 

Our shops are tackling this issue in a number of ways. Some are setting up internal training programs, some apprenticeships.  Several of our member companies are creating on-site schools to teach skills needed. As an industry we helped to create, and are supporting initiatives like Right Skills Now. Right Skills Now uses National Institute for Metalworking Skills (NIMS) credentials to create the skilled workforce that manufacturers require to remain competitive in today’s global markets.

Claim: The President had this to say about employment and manufacturing:

More than 14 million new jobs; the strongest two years of job growth since the ’90s; an unemployment rate cut in half. Our auto industry just had its best year ever. Manufacturing has created nearly 900,000 new jobs in the past six years. And we’ve done all this while cutting our deficits by almost three-quarters. We’ve launched next-generation manufacturing hubs, and online tools that give an entrepreneur everything he or she needs to start a business in a single day.”

Response: We haven’t won this one yet.

“…there has been a gain of 878,000 jobs since February 2010. But Bureau of Labor Statistics data show that the number of manufacturing jobs is still 230,000 fewer than…in the depths of the recession — and 1.4 million fewer than when the recession began in December 2007. Indeed, the United States only gained 30,000 manufacturing jobs in all of 2015.” – Washington Post

Question: Why do we have a skilled workforce shortage when we are at the lowest labor participation rate in ten years?

Work yet to be done on unemployment...

Work yet to be done on unemployment…

Regulatory Hostility

Tools to set up a business in a single day sounds downright positive. But for those of us actually in business, the federal government is an adversary, not an advocate. And EPA overreach on Waters of the U.S., declaring jurisdiction over 8 million miles of ditches, and retention ponds from the 3.5 million miles initially authorized by Congress, may make that one-day business approval figure a wee bit optimistic.

Other EPA regulations that increase our costs or potentially will reduce our operations include setting ground level ozone limits below those of the natural conditions of our geography. And the EPA Powerplant Rule that will increase our costs of production significantly.

Industry has reduced the number of fatal work industries by 18.8% from 2004- 2014 yet the Department of Labor increasingly acts as enforcement against, rather than a partner with business, as evidenced by these recent actions:

  • Increase penalties by up to 80%;
  • Elimination of employer’s ability to use positive reinforcement to achieve safety goals, thus making safety an us vs them issue.
  • Joint memorandum of Understanding with Department of Justice to prosecute Serious Safety violations as Felonies under Environmental laws;
  • Focus on Employers responsibilities and worker’s rights, rather than an even approach to the s rights and responsibilities of both employers and employees.

We haven’t mentioned the outright hostility of the NLRB to employers, nor any difficulties with compliance with the Affordable Care Act.

Manufacturers find themselves increasingly hamstrung by the latest regulations out of the federal government- 81,611 pages of which were published in the Federal Register in 2015.

@015 federal register Photo Courtesy Sen. Mike Lee

2015 Federal Register Photo Courtesy Sen. Mike Lee

 

 

What is the state of manufacturing today?

We are encouraged by short term Employment Momentum.

Positive trend

Positive trend

Our PMPA Monthly Business Trends Employment Sentiment remains solidly positive with 85% of respondents reporting employment prospects to be steady or improving over the next three months.

Yet our Short Term Industrial Production Momentum tells a very different tale.

State of manufacturing Production

State of manufacturing Production

 

What is the state of Manufacturing?

We’re happy to report that we have great people, improving technologies, and great ideas to put to work.  Preliminary look at the data for the precision machining industry shows that we finished the year up a very modest 1.6 % over 2014. Positive, but modestly so.

We are taking it on ourselves to solve the skilled workforce issue and are reaching out to our communities through events like MFG Day to tell the story of great careers without requiring thousands in college debt.  We support apprenticeships, serve on advisory boards at local vocational schools and community colleges, and continue to do the lion’s share of training in our industry in our shops at our own cost.

While we continue to be challenged by our inability to add skilled talent, it is the increasingly hostile regulatory tone that has the potential to reduce our operations and increases our risk without any substantiated benefits. We are not asking for the elimination of regulatory enforcement in any area. But we do think it would be nice to have agency policies that could be seen to be fair and dealing with both employer and employee responsibilities. Environmental regulations s that recognize the existing natural conditions, rather than set arbitrary limits that Nature itself does not attain. A government that actually is part of the solution to growing our economy, instead of one of the biggest obstacles those of us that are actually doing that growing and hiring and production must face.

We’re here. We’re ready. We’re committed.

What is the state of the Manufacturing Industry?

Positive. Positive but guarded.

 

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Yes, INC Magazine, There Really Is A Skills Gap

May 8, 2014

 

It is easy for big city editors and academics to broadly dismiss the real issues that employers face as we try to find and hire skilled workers. There are systemic disincentives and cultural issues that are discouraging people from getting the skills that could lead to a great career in precision machining and advanced manufacturing.

PMPA President and Member Darlene Miller, President and CEO of Permac Industries in Burnsville, MN was mentioned  in INC Magazine’s Latest Article on the Skills Gap.

Graduates of jobs training programs are being hired on the spot

Graduates of jobs training programs are being hired on the spot

 

The article shares the success of Darlene Miller’s efforts  to jump start the creation of a training program for machinists in her area.

“Darlene Miller, CEO and owner of Permac Industries in Burnsville and a former member of the President’s Council on Jobs and Competitiveness, contacted the Manufacturing Institute to develop a fast-track program, Right Skills Now. Area companies worked closely with two community colleges to create a 24-week intensive course, including internship, that launched in October 2012.

So far, businesses are happy with the result; graduates “are scarfed up as soon as they finish,” Miller says. The program has spread to eight states; four groups of 18 to 20 people have finished in Minnesota, with a placement rate approaching 95 percent.”

But the INC Article  glosses over some very critical issues in an attempt to poo-poo the fact that “there are issues finding people for specific jobs in specific industries;” and states that in the workforce as a whole there is no skills gap.

Issue: Schools are not preparing students for careers in advanced manufacturing. Check..

  • Weak math skills in applicants,
  •  Inability to use ruler, let alone micrometers or more sophisticated gaging,
  •  Lack of shop classes in most school districts.

These are facts that we face with most applicants right out of school.

Issue: Unmotivated workforce. Check.

  • Workforce participation rate has never been lower since they started keeping track of it.
  • Why work when you can collect benefits? 
  • Our shop owners report that many applicants are just going through the motions since they still have many weeks of extended federal benefits.
  • Also many applicants can’t pass a drug test. One PMPA member told me that they lost 2/3 of their new hires within a year  for either drugs or failure to show up to work as scheduled.

This is reality. Generous unemployment benefits and their extension provide a disincentive to people to work.

mike-hunter-permac-industries_27377

Issue: Employers aren’t training. Hogwash.

  • Our shops provide many forms of training to our new hires as well as our established employees.
  • Many provide training in house through ToolingU.
  • Many have arrangements with local schools to provide coursework on premises.
  • Many have tuition Reimbursement Programs.
  • Also, PMPA provides CEU recognition to member company employees who attend association provided training events.

It is easy for big city editors and academics to broadly dismiss the real issues that employers face as we try to find and hire skilled workers.Skilled workers to add value in our advanced manufacturing precision machining shops. But the facts that our shop owners face daily establish that there is a skills gap in our industry. Despite the best efforts of our company managements, trade association, and community colleges to make a difference, there are systemic disincentives and cultural issues that are discouraging people from getting the skills that could lead to a great career in precision machining and advanced manufacturing.

 What are you doing to address the skills gap? How do you see the skills gap in your efforts to add talent?

Photo credits INC Magazine

 

 


“Earn While You Learn” Or “Borrow Today, Pay Back Tomorrow?”

November 12, 2013

The Akron Beacon Journal front page story Sunday was titled More and More, Students Having Trouble Paying Back Their College Loans.

A few quick takeaways-

  • Borrowing over $100,000 to get psychology degrees did not create sufficient ROI to cover $900/month loans payment for one student, whose work using her degrees is paying near minimum wage;
  • Nationwide, 14.7 percent of borrowers defaulted on their federal student loans in their first three years of repayment;
  • Nationwide, students at for-profit colleges have the most trouble repaying their loans, with almost 22 percent not making payments for at least 270 days in the last three-year snapshot;
  • According to a new study by the University of Kansas, adults with student debt tend to show lower college graduation rates, delays in marriage and buying cars and homes, and lower net worth than those without debt.
  • According to a spokesperson from the Institute of Student Access and Success: “The loan is supposed to enable them to get an education to get a job and pay back the loan, when you see high default rates, you know something in that string of logic has broken down.”

Indeed.

Really? This is your plan?

Really? This is your plan?

Critical thinking is recognizing and challenging assumptions.

The assumption is that having a college degree, any college degree, will guarantee the graduate a well paying job able to pay off the student loan indebtedness.

For almost 15 percent of borrowers nationwide, this is NOT the case.

We strongly recommend college education if your plan  assures that you will earn a sufficient return on your college investment to allow you to repay the cost of college.

In the current economy, frankly, that is often NOT the case.

We urge you to look at college affordability and loan repayment terms up front- and make a decision- do you want to start your life in significant debt?

There is an alternative.

  • While many college graduates are unable to find work  that pays enough to allow them to pay back their student loans, getting a job in precision machining will enable you to earn while you learn, and avoid the huge student loan debt trap.
  • Many employers will provide tuition assistance.
  • The outlook for employment  in our industry has remained above 90%  (Very Positive) all year. CEO’s I speak with are always looking to find talented people.

Many of our industry’s top process engineers, managers, buyers and quality control personnel  started in operations and built their education as they built their career.

So you now have a choice- borrow loads of money today and hope that you can pay it back tomorrow. Or earn while you learn and build a career as you build an educational pathway to success without huge loans.

We’re really a fan of education of all kinds. We’re just not a fan of big debt.

Precision Machining Career Info

PMPA Comprehensive Career Education Database

Right Skills Now

Student Debt Chart


Schools Offering NAM Endorsed Manufacturing Skills Certifications

May 24, 2013

The M-List is curated by the Manufacturing Institute to include those institutions that offer NAM endorsed metalworking skills training and certification.

PMPA partners with the Manufacturing Institute to promote the growth of credentialed metalworking professionals following the NAMEndorsed -NIMS Skills Credential Model.

The M-List recognizes high schools, community colleges, technical schools, and universities that are teaching manufacturing students to industry standards.  Specifically, these schools offer students the opportunity to earn NAM-Endorsed Manufacturing Skills Certifications as a standard part of their manufacturing education programs.

The NAM-Endorsed Skills Certification System is a system of stackable credentials that can apply to all sectors in the manufacturing industry. These nationally portable, industry-recognized credentials validate the skills and competencies needed to be productive and successful in entry-level positions in any manufacturing environment.

Right Skills Now is an acceleration of the NAM Endorsed Manufacturing Skills Certifications Program designed to fast track qualified candidates into a career in precision machining / advanced manufacturing.

See the M- List here.

If there is no M-List program in your area, don’t despair. PMPA has prepared a database of institutions that offer relevant skills training for precision machining (some of which offer the same NAM endorsed -NIMS Manufacturing Skills credentials here: PMPA Career Training Database

No ROI for college loans? Consider getting a skill that will assure you of a job- and a means to earn your way through college.

No ROI for college loans? Consider getting a skill that will assure you of a job- and a means to earn your way through college.

If you are one of the unhappy college graduates mentioned in Forbes- perhaps you should consider bringing your talents to work in our industry.

CNN Photo


How Do I Get a Job In Precision Machining?

March 4, 2013

The fact is that there continue to be jobs available for people with skills who can add value in our advanced manufacturing precision machining shops. Our companies are constantly trying to solve their problem of lack of  skilled operators.

Today's high tech high precision CNC machines assure a skilled craftsman a great career!

Today’s high tech high precision CNC machines assure a skilled craftsman a great career!

Never mind the reports about high unemployment rate. Think twice before committing years of your life and many thousands in debt for a college degree that may not deliver any employment ROI.

How can YOU get a job in precision machining?

1) Master your high school math. Machine operators work with decimal fractions to 4 or more places in both English units and metric.  Algebra, geometry and rigonometry are used regularly, they are fundamental to understanding our processes. If you can do high school math you have a foundation for a career in precision machining.

2) Get an entry level credential. Community colleges across the country offer one year training programs that result in a CNC operator certificate, Quality Control Technician certificate, or the like.

3) Visit precision machining shops in your area. Look at the technology that is employed. Ask about the high tech products that they produce. Ask them to explain how they measure and check the parts.

4) Ask your friends who have recently graduated from college how their job search is going. The majority of recent college graduates are either unemployed or underemployed in a position that does not require nor compensate them for the degree nor their time and money invested.

5) Get more information off the PMPA’s website. Our Career Tab is a great place to start. Our Training Database will help you identify training resources in your local area. Right Skills Now will help you understand the opportunity and need for machininsts. NIMS credentials are the Gold Standard for our industry.

With the certainty of employment costs increasing due to the Affordable Health Care Act, with the pressures to minimize staffing to control those costs, and the ever present need to remain competitive, companies still need to solve their “skilled operator problem.”  If you have a credential that says that you have skills, our shops will be happy to take a look at what you have to offer. The resources above will help you get that credential.


Congratulations- 122 Women in Manufacturing Honored at STEP Awards by Manufacturing Institute.

February 7, 2013

When I started in manufacturing, “The Gals” were in the office- not the shop.

122  women who make a difference in Manufacturing today

122 women who make a difference in Manufacturing today

The inaugural group of 122 STEP honorees recognized by the Manufacturing Institute on February 5th in Washington D.C.  showed me that the times have changed and that there are many, many ways  that women can and do meaningfully contribute to manufacturing at their companies as

  • Plant and Production Managers,
  • Operations,
  • Engineers,
  • Technologists,
  • Process Control,
  • Regulatory Affairs,
  • Certified Welders,
  • CNC Machine Operators,
  • Weld Process Specialists,
  • Quality Control,
  • Health,
  • Environment,
  • Process Safety,
  • Chief Financial Officer,
  • Designers and Design Engineers,
  • Compliance Officers,
  • Chief Scientists,
  • Safety,
  • Quality,
  • Black Belts,
  • Training and Apprenticeship Instructors,
  • Manufacturing Lead,
  • Product Development,
  • Sales and Marketing,
  • Information Technology,
  • Lead Analyst,
  • Business Development,
  • Continuous Improvement,
  • Planning and Shipping,
  • Designer,s and Design Engineers
  • Information Security,
  • Assembly,
  • Legal and Corporate Affairs,
  • Systems Development,
  • President,
  • CEO
  • Owners

I am certain that I missed a few…

PMPA is proud to recognize our member and Vice President Darlene Miller, CEO of Permac Industries in Burnsville MN as one of this inaugural group of honorees.

Darlene Miller Nak“Darlene’s leadership  reaches far beyond PERMAC. As a member of the President’s Council on Jobs and Competitiveness she recognized the need for trained high skill workers and led the creation of Right Skills Now training program and helped support the 10,000 Engineers nationwide engineering student retention program. She was named small business person of the year in 2008 by the U.S. Chamber, and serves as an officer and board member at PMPA as well as a number of other nonprofits.”

Congratulations to Darlene and all the women recognized for their vital role in manufacturing today. And thanks to the Manufacturing Institute for helping raise the awareness of the vital need for the talents that these and all women bring to our shops.

Yes, I would like to see my daughter get into manufacturing. Wouldn’t you?


PMPA Vice President Darlene Miller STEP Honoree

January 17, 2013

“Manufacturing transforms more than materials into products. It transforms individuals into craftspeople. It transforms communities into global trade partners. It transforms companies into engines of human growth. It transforms our quality of life for the better.”- Darlene Miller

We were not surprised that  the Manufacturing Institute recently selected PMPA member and 1st vice president Darlene Miller to be an inaugural STEP awards honoree.

Permac Industries' Darlene Miller visits the White House Thursday February 24, 2011.

Permac Industries’ Darlene Miller visits the White House Thursday February 24, 2011.

Manufacturing Institute: “…honored because they each made significant achievements in manufacturing through positive impact on their company and the industry as a whole.”

That’s a bit of an understatement.

Darlene’s leadership success reaches across the country and across organizations as she personally mentors at risk young women through Hope for Tomorrow, served as a member of the President’s Council for Jobs and Competitiveness (PCJC), and founded the Right Skills Now program to help meet the need for trained high skill workers in advanced manufacturing.  She serves on a number of important committes for the U.S. Chamber Small Business Council, and is a frequent invitee, and presenter at various policy forums including the Clinton Global Initiative, The Atlantic Council and others. She promoted the nationwide adoption of the Right Skills Now training program and supported the creation of the  10,000 Engineers program, created to spur engineer retention by providing student internships. She advocates tirelessly for NIMS certifications  and a credentialed workforce. She continues to work with additional schools across the company to make Right Skills Now readily available to potential machinists.

Darlene was named Small Business Person of the Year by The U.S. Chamber of Commerce in 2008, and the SBA in 2006 currently serves as Vice President of the Precision Machined Products Association, and was selected by her peers to be the association’s first female President in 2014.

We are proud to see our vice president and member  Darlene Miller recognized for her efforts to promote manufacturing in North America. To promote manufacturing as a career. And to be recognized for her work at the national level to make a difference in the lives of talented but unemployed persons who are- thanks to her work with Right Skills Now- finding a career in advanced manufacturing.

PMPA extends our congratulations to Darlene Miller. And to the thousands of other individuals like her that are trying to make a difference in advancing our craft, our employees, and helping all find their highest and best use through careers in advanced manufacturing.