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Shrinking The Skills Gap: Why Manufacturing Day Matters

on Tuesday, 21 October 2014 13:13.

Madison, WI (, October 3, 2014):  Today we celebrate Manufacturing (MFG) Day, during which hundreds of manufacturers throughout the U.S. and Canada are hosting open houses, plant tours and career workshops, in order to raise awareness about the excellent career opportunities in manufacturing. MFG Day began in 2012 in an effort to draw attention to a major problem threatening the industry, and the overall economy — the skilled labor shortage. There are almost half a million skilled positions unfilled in manufacturing, a situation that will only worsen as baby boomers exit the industry, while fewer numbers of young people elect to enter it. We must change the perception of manufacturing as a desirable career — that's why MFG Day matters.

MFG Day provides opportunities for students, parents, educators, and the media to see today's technologically advanced manufacturing facilities. And to observe firsthand the advanced skills and knowledge base of the modern manufacturing workforce. It gives manufacturers the chance to dispel misconceptions of manufacturing as dark and dirty environments where low wages are commonplace, which is far from reality. In fact, the average annual salary for a U.S. manufacturing worker is $77,505, greater than the U.S. median of $51,371.

MFG Day is just one solution to the skills gap problem. That's why we'd like to know, "what are you doing to address the skills gap?" We also want to share how a few Kronos customers are working toward closing the gap by creating programs that connect with and provide opportunity for the future workforce:

Aker Philadelphia Shipyard, a leading manufacturer of vessels operating out of the U.S.

Offering a formal apprenticeship program

"We have a formalized three year apprenticeship program designed to produce highly skilled production workers who can perform successfully in a high performance work organization, compete in a world market, and participate in the future success of our organization. Approximately 90 percent of this time is spent with skilled workers in the apprentices' craft, allowing the apprentice to master the proficiencies of his/her craft through scheduled job rotations. We recognize that classroom learning also plays a large role in developing skills; therefore, the remainder of program time is spent in a classroom environment and independent learning." — Michel Boeckx, chief technology officer, Aker Philadelphia Shipyard

Appvion, Inc., a leading manufacturer specializing in paper production

Working with local, trade educational institutions

"With such a large generational shift, U.S. manufacturing has the task of replacing a huge skilled workforce and we recognize this. While technology and automation has improved, we feel it is essential that we maintain the skill trades if the U.S. is to remain globally competitive in manufacturing. To address this, at Appvion, we are continuing to work with local trade schools and colleges to increase the opportunity of providing the employees of tomorrow with a solid foundation in manufacturing." — Jason Carson, HR manager, Appvion, Inc.

Joy Global Inc., a worldwide leader in high-productivity mining solutions

Partnering with vocational schools and compensating well

"Finding talent can prove to be very difficult. We have partnered with vocational schools -both high and post-high school technical training schools/colleges - to provide the institutions with in depth explanations of what our requirements are so they endeavor to train the students to achieve the high level of skills that we are looking for. Retaining the talent is usually not too much of a problem as we are one of the top paying manufacturers in the region." — Chris Wright, global Kronos business process manager, Joy Global

Magnetek, a manufacturer of digital power and motion control systems

Working with local colleges and developing interns into employees

"We partner with Waukesha Technical College and other local colleges, in particular University of Wisconsin-Milwaukee, Milwaukee School of Engineering, and Marquette University. Since they are located close to our campus, interns can continue working 10 -15 hours weekly during the school year and we encourage them to return in the summer and once they graduate, work in full time positions depending on availability.

The real key to finding and retaining young talent is to provide meaningful work and training to develop the right employees so they are confident and feel that the company has interest in his/her advancement and skills. By providing mentorship, desirable skills are transferred. Talent will only help us recruit if the company culture is a strong differentiator and because ours is, we have a very successful employee referral program." — LindaPintor, vice president of HR, Mangetek

Pioneer Metal Finishing, a manufacturer of metal finishing services with locations across the U.S. and Mexico

Investing in your own organizational development team

"Pioneer Metal feels the pain that most manufacturers are experiencing related to finding the talent necessary for today and the future. For us, our gap exists around finding strong leaders with the skills necessary to successfully lead, engage, and develop large teams of people. To address this, we invested very early in our own organizational development team. This gives us the capability to foster raw talent into strong leaders.

Pioneer Metal also feels that getting in front of young adults at an early age is important. We partner with a few key manufacturing alliance partners whose focus is on getting in front of students in high school and talking about careers in manufacturing. We have done several presentations with the alliance and have been a part of educational fairs to address the misperception of a career in manufacturing and show the growth and opportunities that are out there." — Brad Nycz, director of HR, Pioneer Metal


US Cracks Down On Companies Moving Overseas

on Friday, 03 October 2014 11:16.

New York, NY (Associated Press, September 24, 2014):  A handful of big companies pursuing overseas mergers to lower their tax bills came under pressure Tuesday after the U.S. unveiled rules to discourage them.

The Treasury Department announced new regulations on Monday aimed at making these so-called inversion deals less lucrative. In a typical deal, an American company buys a foreign firm based in a country with a lower tax rate, then moves its headquarters overseas.

Drug companies in Ireland and the U.K. have been popular targets. The pharmaceutical company AbbVie, based in Chicago, reached an agreement to buy Dublin-based Shire in July for $54 billion. Shares of both companies sank in Tuesday trading. AbbVie Inc. lost 2 percent in New York trading, while Shire sank 2 percent in London.

"The repercussions of these rules could end up reaching far more businesses than the headlines might suggest ..." said Jan Wald, an analyst at Benchmark Co., a financial advisory firm. In a note to clients, Wald listed a number of changes made by the new restrictions, including "the way that loans to foreign entities with U.S. participation are treated under U.S. tax law."

Among other companies getting hit in Tuesday trading, Minneapolis-based Medtronic Inc., which plans to buy Dublin-based Covidien Plc., fell 4 percent. Covidien lost 3 percent. The British drugmaker AstraZeneca, still considered a likely takeover candidate after it successfully rebuffed overtures from Pfizer Inc. earlier this year, slumped 3 percent.

The new regulations attempt to stop a range of complicated transactions companies use to lower their U.S. tax bill. One measure tries to stop "hopscotch" loans, in which companies turn their foreign earnings into U.S. loans. Another rule change tightens the application of a law that says the U.S. company's shareholders must own less than 80 percent of the new, combined company.

About 50 U.S. companies have carried out inversions over the past decade, according to the nonpartisan Congressional Research Service. Many more had been considering it.


Hershey Wins Dow Jones Sustainability Award

on Thursday, 18 September 2014 11:48.

New York, NY (The Associated Press, September 12, 2014):  The Hershey Company today announced that it has been selected to both the Dow Jones Sustainability World and North America Index.

Hershey is one of only 13 companies from the Food, Beverage, and Tobacco Industry in the World Index and ranked in the 93rd percentile overall. This is the third year in a row Hershey has been included in the North America Index and the second year Hershey has been named to the World Index.

Hershey's selection to the prestigious World Index reflects the company's substantial progress in its global Corporate Social Responsibility efforts. Over the course of the last few years, Hershey has made significant strides in its environmental sustainability and sustainable sourcing efforts, completing many of its long-range goals and phased commitments ahead of schedule.

The company's environmental achievements, outlined in Hershey's third CSR report, include the following notable improvements:

  • Seventy-two percent water reduction
  • Thirty-eight percent waste reduction
  • Twenty-three percent greenhouse gas emissions reduction
  • Corporate-wide recycling rate of 87 percent
  • A total of 12 Zero Waste to Landfill facilities – including seven manufacturing facilities. Ninety-seven percent of Hershey's U.S. production takes place at ZWL facilities.

In sustainable sourcing, Hershey's Cocoalink program was found to have "significantly improved the livelihoods" of Ghanaian cocoa farmers. Approximately 45,000 Ghanaian cocoa farmers are enrolled in the mobile technology program, and farmers in Cocoalink communities increased their yields by 45.6 percent in three years. After the success of the Cocoalink in Ghana, Hershey has plans to expand the program to cocoa-growing regions in Côte d'Ivoire.

Hershey also committed to purchasing 100 percent traceable and sustainably sourced palm oil late last year after announcing it had achieved 100 percent mass balanced RSPO certified palm oil one year ahead of schedule.

"Hershey's inclusion in the North America and World Index builds on our positive momentum since announcing in May that we have completed sixty percent of our long-range CSR goals. It is clear validation that our accomplishments in a wide range of CSR areas, from environmental sustainability to ethical sourcing, are recognized within the sustainability community," said Terry O'Day, Senior Vice President Chief Supply Chain Officer. "We are pleased that we continue to push ourselves to deliver improvements across a broad range of meaningful sustainability objectives."

Hershey's heritage of engaging with consumers and communities began with the company's founding more than 120 years ago and is rooted in a tradition of ethical business practices, remarkable employees and giving back to its communities. Hershey integrates CSR into its business strategies through its social mission for Shared Goodness, helping children and their communities around the world achieve a better life and bright future.

The Dow Jones Sustainability Indexes are determined by SAM (Sustainable Asset Management), in partnership with the S&P and Dow Jones Indices. They are the first global sustainability benchmarks that track the financial performance and sustainable business practices of the world's leading companies using economic, environmental and social criteria.

The Dow Jones Sustainability World Index was launched in September 1999 and tracks the performance of the top 10 percent of the 2,500 largest companies in the S&P Global Broad Market Index that lead the field in terms of sustainability. DJSI North America launched in September 2005 and represents the top 20 percent of the 600 largest companies in the North America Dow Jones Global Total Stock Market.


Skill Gap Bumps Up Against Vocational Taboo

on Tuesday, 16 September 2014 11:45.

Chattanooga, TN (Wall Street Journal, September 12, 2014):  The Obama administration and governors from Michigan to North Carolina have a solution for some of the U.S. manufacturing sector's woes: German-style apprenticeship programs.

But their success is proving to be unusually one-sided, mostly drawing firms based in Germany and other non-U.S. countries. In North Carolina, "Apprenticeship 2000," a program combining classroom work and on-the-job training, has drawn numerous German companies but so far only two U.S. firms, Ameritech Die & Mold Inc. and Timken Co.

In Michigan, where Republican Gov. Rick Snyder promised last year to "Americanize" the German model in his state, almost three-fourths of the participants are firms based overseas, mostly in Germany.

Both the White House and governors are trying to fight a so-called skills gap among U.S. workers that many businesses blame for the slow labor-market recovery. Although plenty of Americans are looking for work, employers often lament a lack of qualified workers—particularly young people.

Germany, in contrast, has a long record of finding a stronger fit between employees' skills and employers' demands. The success is reflected in a youth unemployment below 8%, the lowest of any advanced country and about half of the U.S. level. The apprenticeship system is credited as a leading driver of what many European economists call the German labor-market "miracle."


PA Manufacturing Continues to Decline

on Monday, 15 September 2014 11:07.

Harrisburg (Central Penn Business Journal, September 10, 2014):  Manufacturing employment in Pennsylvania declined in the past year, reports the 2015 Pennsylvania Manufacturers Register, an industrial database and directory published by Manufacturers' News Inc.

According to data collected by MNI, Pennsylvania lost 6,330 manufacturing jobs, or nearly 1 percent, from July 2013 to July 2014, in contrast to the 1.4 percent national average gain reported by the Labor Department for the same time period.

MNI data shows Pennsylvania is now home to 17,191 manufacturers employing 800,318 workers.

"High business costs and global competition have made it difficult for Pennsylvania manufacturers to climb back from the recession," said Tom Dubin, president of Manufacturers' News. "However, its educated workforce and investment in worker-training programs continue to be a draw for new businesses, particularly those focused on technology and innovation."

MNI reports Pennsylvania industrial employment has fallen 5.2 percent since July 2009, while government statistics reveal manufacturing employment in the U.S. climbed 3.4 percent during the same time period.

One should note, however, that cuts in employment are predictable give the increasing productivity of manufacturing through technology.  While manufacturing has lost employment, its contribution to gross regional product and exports in Pennsylvania still leads all industries.  Low-skill, low-wage jobs have been replaced by higher skilled technical jobs among the jobs that remain. (SJS)


German Style Training For American Factory Workers

on Friday, 12 September 2014 11:02.

(New York, NY)(Wall Street Journal, September 9, 2014);  German robotics company Festo AG wants to make American factory workers more tech-savvy.

As robotics take an ever more prominent role on factory floors, training workers and keeping their skills up-to-date has grown in importance.

The German company sees in the U.S. "a mismatch in the labor market between what businesses need and the kind of education young people are getting," said Nader Imani, chief executive of Festo Didactic, the company's stand-alone education division.

Note that there are more home-grown solutions to the problem in training the American-based workforce in industrial maintenance, motion control, and mechatronics.  The Lancaster County Workforce Investment Board, PMMI, and the Industrial Maintenance Training Center of North America has developed competencies and certificates to guide training with input from American manufacturers.  Click here for more information.  (SJS)

Festo specializes in sophisticated automation equipment used by manufacturers world-wide, including German auto makers Volkswagen AG VOW3.XE -0.54% , Daimler AG DAI.XE -0.79% and their suppliers. For decades the company has trained German workers in manufacturing to use its systems, in the process developing Festo Didactic. As a part of the division's training programs, it sells educational equipment and offers seminars.

Festo Didactic, whose customers include Siemens AG SIE.XE -0.50% and VW's Audi unit, is expanding in the U.S. In June, Festo bought Lab-Volt Systems Inc., a New Jersey company that makes training systems for technicians.


Employers to Blame for Skills Gap?

on Monday, 08 September 2014 16:50.

Harrisburg (PennLive, August 19, 2014):  So here's one for a Tuesday morning: We've all heard that employers just can't find the workers with the skills they need to fill all those jobs out there.

And instead of graduating English majors, colleges should be turning out high-skilled workers and some kids should head to trade school instead of Happy Valley.

But what if it's all backwards?

From the pages of the Wall Street Journal, we give you this:

"Ever since the the recession, job openings have far outpaced the number of people being hired. A common refrain from employers is that workers lack proper training and education for the available jobs–in other words, that a "skills gap" is to blame.

But the fault rest with employers, not workers, says a new working paper from Peter Cappelli, the director of the Center for Human Resources at the University of Pennsylvania's Wharton School.  Click here for a downloadable copy of the report.

"These complaints about skills are driving much of the debate around labor force and education policy, yet they have not been examined carefully," writes Mr. Cappelli.

To quickly recap, the number of job openings has climbed quickly in the past five years. But many of these jobs are going unfilled, and the number of hires each month has not risen as fast as openings.

Studies from consulting firms like Deloitte and McKinsey have looked at whether too few workers have the technological skills that modern manufacturers need and whether this skills gap will widen even further. The staffing firm ManpowerGroup MAN +2.86% has said 36% of global employers report difficulty finding candidates with the right skills."


Youth Council


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Founded in 1999 as the successor organization to the Lancaster County Private Industry Council, the Lancaster County Workforce Investment Board has a mandate through the federal Workforce Investment Act of 1998 to be the lead organization in Lancaster County for workforce planning, to cooperate with State officials in providing business with locally-validated labor market information, and to arrange for a service delivery system that meets the workforce needs of business and the public alike.



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