Global Manufacturing: Its Not Our Fathers Industry How the NAM Is Helping Manufacturers Build A Work

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Global Manufacturing Its Not Our Fathers
IndustryHow the NAM Is Helping Manufacturers
Build A Workforce Pipeline and Fill The Skills
Gap Stacey Jarrett Wagner, Managing Director,
Center for Workforce SuccessABMA Conference,
October 11, 2007
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The National Association of Manufacturers

• Largest multi-industrial trade association in US
• President John Engler, former 3-term governor
  of state of Michigan
• 14 million manufacturing employees
• 350 member associations
• 85 percent of U.S. manufacturing output
• Every industrial sector, all 50 states

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The Manufacturing Institute/Center for Workforce
Success

• Chairman Robert Ratliff, Chairman, AGCO
• Mission Build an understanding of
  manufacturings contributions to the U.S. economy
  and its challenges with legislators, educators,
  media and ordinary citizens
• Focus on the 3 Cs Competitiveness, careers and
  costs.

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Headline (then) The Washington PostDecember 3,
2002

Dow Slips As Factory Output Disappoints The Dow
Jones industrial average declined for a second
day after an industry report showed that
manufacturing unexpectedly dropped in November.
Johnson Johnson, 3M and Caterpillar helped
drag down the average.
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Headline (now) The Washington Post September
3, 2007

• In North Carolina, A Second Industrial
  Revolution Biotech Surge Shows Manufacturing
  Still Key to U.S. Economy
• The United States makes more manufactured goods
  today
• than at any time in history measured by the
  dollar value adjusted for inflation.

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Todays Manufacturing Strong Pillar of the U.S.
Economy

• Engine Of Economic Growth
• High Productivity
• Excellent Compensation
• Jobs Multiplier
• Innovation
• Strong Contributor To International Trade

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Engine of Economic Growth
Source US Department of Commerce
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High Productivity
SOURCE U.S. Labor Department
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Excellent Compensation
SOURCE Department of Commerce, NAM
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Jobs Multiplier

SOURCE Department of Commerce
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Research and Development Innovation
Source NAM Calculations from NSF data

Non-profits, University and Colleges
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Strong Contributor to International Trade
Manufacturing
U.S. Economy
Rest of Economy
Source NAM calculations from U.S. Department of
Commerce data
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But Storm Clouds Loom

• Multiple Workforce Challenges
• Threaten U.S. Manufacturing

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Headline The Washington PostSeptember 3,
2001

• In America On the Way to Nowhere
• Bob Herberts Op-Ed column says that millions
  of inner-city young people remain undereducated,
  unemployed and dangerously disconnected from
  nation's social and economic mainstream

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Good-Bye! (Dont Go!)
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Dark, Dirty, Dangerous, and Dead-End
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U.S. A Coat of Many Colors
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Workforce Challenges That Threaten U.S.
Manufacturing

• Retirements Going or Staying?
• Education Not Getting Us To The Post
• And What About Higher Education?
• America Looks Different (Again)
• Negative Industry Image

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Retirement Means Loss of Skilled Workers
Source Social Security Administration
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Students Dont Make It Out

• National H.S. Graduation Rate 69.9
• Graduation rates are consistently low for males,
  racial-ethnic minorities, urban, impoverished,
  and segregated communities
• More than one-third of the loss occurs in
  transition from 9th to 10th grade

Source Education Weeks Diplomas Count 2007
Bill and Melinda Gates Foundation
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Schools Fail to Prepare Students In Basic
Education, Say Manufacturers
Source 2005 Skills Gap Report
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Not To Mention Math and Science
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Everyone Should Graduate

• Without a HS diploma, the average adult earns
  only 19,365 annually
• With some post-secondary education, the average
  adult earns 33,633 annually
• But how much post-sec do you need?

Source Education Weeks Diplomas Count 2007
Bill and Melinda Gates Foundation
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How Much Is Enough?
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Americas Skills Gap is in the Middle of the
Labor Market
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Percentage of World Population WithAssociates
Degree or Better
Younger Adults (Ages 25 to 34)
Older Adults (Ages 35 to 64)
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And U.S. Is In The Bottom Half In Completion
College Participation
College Completion
Percent of Young Adults (Ages 18 to 24)
Currently Enrolled in College
Total Number of Degrees/Certificates Completed
per 100 Students Enrolled
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90 - a moderate to severe shortage of qualified
skilled production workers65 - a moderate to
severe shortage of scientists and engineers
39 - a moderate to severe shortage of
qualified unskilled production workers.
What Manufacturers Say About Workforce Shortages
(from 2005 Skills Gap Report)
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Not For Lack of Trying
State Customized Training Funds
Employer-Provided Training
Est. 950b
2006, in b, round estimates
Workforce Development
Source PAROS Group
K-Adult Formal Education System
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1 of Every 2 New Entrants Into The U.S. Workforce
In The 1990s Was An ImmigrantEverything Old Is
New Again How To (Re) Engage The Older Worker
Were Looking In New Places
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U.S. Immigrant Workforce

• More than one of every seven people working in
  the United States was born elsewhere only a
  decade or so earlier, only one in ten workers was
  foreign born.
• Immigrants, representing 15 of the total labor
  force, account for over 70 of workers with no
  more than an eighth grade education.
• One third of the new immigrants lack a high
  school diploma (three times higher than the
  native workforce) though 27 of new immigrants
  hold a bachelors degree or higher.
• 63 of foreign-born workers work in service,
  manufacturing or agricultural occupations.

Source Closing the Immigrant Skill Gap Report,
Literature Search 2005
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Our Aging Workforce
Few executives say their companies have taken
action to mitigate the potential impact on their
competitiveness. Of 1,055 executives surveyed
in 2006

• 79 agree that knowledge and experience that
  older employees take with them when they retire
  or leave can hurt a business financially.
• 74 similarly agree that it has become more
  difficult to find and retain talented and
  qualified employees over the last five years.
• 16 report that their companies currently have
  any formal policies or programs to encourage
  employees who are approaching retirement to
  continue working.
• 59 believe their organizations needs to be
  thinking about retaining workers.

Source Research Report Business Executives
Attitudes Toward the Aging Workforce Aware But
Not Prepared? BusinessWeek Research Services
October 2006
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Dealing With A Negative Image

• Young people said that job opportunities in
  manufacturing are
• Not Challenging 50
• Not Well-paying 61
• Not Rewarding 67
• Not Creative 67
• Not Interesting 68
• Source Manufacturing Institute Benchmarking
  Results in Kansas City, MO

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Facing Disappearing Jobs?Headlines The New York
Times

• The Autoworkers Pain (Feb 16, 2007)
• Workers at Mitsubishi Plant Accept Cuts in Pay
  and Benefits (Sept 2, 2006)
• Kimberly-Clark Announces Plans to Cut 6,000 Jobs
  and Close 20 Factories (July 23, 2005)
• Carrier Is Cutting 600 Jobs At 2 Sites In
  Tennessee (Aug 31, 2001)
• Kodak Plans More Job Cuts (July 22, 1999)

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Not Disappearing, But Changing
Manufacturing experienced 37 growth in demand
for high skilled workers while demand for low
skilled workers declined
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Addressing Workforce Challenges

• Lots of moving parts
• Definition of needed skills
• Educating and training for those skills
• Assessing and certifying those skills
• Getting manufacturers on board
• Using resources wisely (public and private)

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Addressing Workforce Challenges

• The National Association of Manufacturers
  effective solutions
• Sector Workforce Development
• Dream It Do It Careers Campaign
• Business Champions for a 21st Century Workforce

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Sector Workforce Development

• What is meant by
• sector workforce development?
• Why is it important?

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Sector Workforce Development
What is meant by sector workforce
development? Sector strategies build
partnerships of employers, training providers,
community organizations, and other key
stakeholders around specific industries to
address workforce needs. -- NGA
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Sector Workforce Development

• Why is it important?
• Solves shared problems in filling the worker
  pipeline
• Increases growth and profitability of industry
  sectors
• Aligns industry training needs with provision
• Advocates for policy change.

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Sector Workforce Development

• Commonalities of Sector Work
• A focus on present and future skills shortages
• Coordinated education and training
• Coordination with eco-dev entities
• Serving underserved
• Employers first among equals
• Infrastructure for continuation.

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Sector Workforce Development

• The Role of Business and Business Associations
• Expressions of worker needs
• Descriptions of skills needed
• Involvement in education and training provision
• Linking the stakeholders and driving change.

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Sector Workforce Development

• Business Associations as Intermediaries
• Organize, advise and advocate
• Provide or broker services
• Improve workforce services
• Engage in RD for HR
• Help advise the workforce system.

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Sector Workforce Development

• Roles for Business Associations
• Sector catalyst for initiative
• Sector lead or intermediary
• Supportive partner
• Training needs assessor
• Training provider
• Vehicle for financing
• Leader for policy issues.

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A Pro-Manufacturing Economic Development and
Awareness Campaign
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Why A Campaign?

• Promote accurate vision of todays advanced
  manufacturing as vibrant source of economic
  growth and its great jobs
• Align goals of economic development entities,
  workforce and education development systems with
  industry
• Develop local education and training strategies
  for manufacturing that fill skills gaps
• Provide career information, guidance, and links
  to training, internships and jobs

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What Is The Campaign?

• A Partnership Among
• Collaborations of regional manufacturers, civic
  leaders,
• educators, economic developers, workforce
  development leaders, manufacturing extension
  partnerships, community-based organizations (now
  a national network)
• National Association of Manufacturers (NAM)
• The Manufacturing Institute/Center For Workforce
  Success

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How Do We Assist?

• Site Readiness Assessment
• Benchmarking Study
• Skills Gap Study
• Campaign Flowchart/Timeline
• Style Branding Guide
• Local Events Structure
• Speakers Kit/Media Kit
• Media Plan
• Interested Party Referral System
• Award-winning Website
• National Partnerships

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Where Are We Working and On What?

• Indiana
• Virginia
• Washington
• Texas
• Nebraska
• Ohio
• Arizona
• Missouri
• Illinois

• Partnerships
• Certifications
• Positive Image
• Regional Clusters
• Career Pathways
• Curricula Development
• Economic Development
• Integrated Systems

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What Has Been Accomplished?

• Recognition Money and Awards for Development
• Alliances Manufacturers and Others
• Attention National and Regional Media and by
  Governments
• Skilled Workers Training and Education
• Enhanced Image Positive Reactions to Messages

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NAM At The Policy Level

• Promote STEM education
• Passage of workforce legislation WIA, HEA,
  NCLB, America Competes Act, Perkins Act, H-1B
• Business Coalitions Tapping Americas
  Potential, Tough Choices or Tough Times,
  Skills2Compete

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Changing Post-Secondary Education Policies
NAM Business Champions
CEOs
ACCT
AACC

• Inform on Issues of Post-Secondary Education
  and 21st Century Workforce Needs
• Connect Business Leaders To Colleges And
  Policymakers

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And There Are Many Other Initiatives Both
Private and Public Sector

• WIRED
• National Fund for Workforce Solutions
• LiLAs
• Project Lead The Way, SkillsUSA
• BEST and iBEST
• NSF ATE Centers, NGA Sector Networks
• Competency Frameworks and Career Clusters
• NIMs, MSSC, WorkKeys, Other Credentials

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And The NAM Has Many Workforce Resources
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American Manufacturers Face Many Challenges

• Beyond Lean Manufacturing
• Thinking Global Even If Youre Small
• HR Policies and Practices
• Outsourcing and Offshoring
• Supply Chain Management
• Energy, Trade, Taxes, Healthcare, Currencies
• Filling Skills Gaps
• Now Is Not The Time To Be An Ostrich

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What Are You Doing To Solve Your Skills Gaps?
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Global Manufacturing Its Not Our Fathers
IndustryHow the NAM Is Helping Manufacturers
Build A Workforce Pipeline and Fill The Skills
Gap Stacey Jarrett Wagner, Managing Director,
Center for Workforce Success www.nam.org 202 637
3000 swagner_at_nam.org