Remarks by Emily Stover DeRocco. The Manufacturing Institute. at the ABI Conference June 9, 2010 Ames, IA

Transcription

1 Remarks by Emily Stover DeRocco President, The Manufacturing Institute at the ABI Conference June 9, 2010 Ames, IA Thank you, Martin. It is so good to see you again. ACT and The Manufacturing Institute have recently developed a strong working partnership focused on building the 21st century high performance manufacturing workforce. It is a real pleasure to join Mary Andringa from Vermeer Corporation on stage today. As some of you probably know, Mary is the incoming Chair of the National Association of Manufacturers. She ll be leading the oldest and one of the largest trade associations in Washington, DC. I very much look forward to working with her on a host of issues including those directly affecting the manufacturing workforce. I know she ll bring business experience and Hawkeye common sense to Washington, both of which we could use a little more of. Let me also thank the Iowa Association of Business and Industry for hosting this conference and for the role they play in promoting and strengthening manufacturing. While Iowa is certainly known for its agriculture, manufacturing has a long and proud tradition in the state, and judging by the turnout today, ABI will play an important part in its continued success. As Martin mentioned, I am now the President of The Manufacturing Institute. We are the non-profit, non-partisan affiliate of the National Association of Manufacturers and our mission is to support the nation s manufacturers through solutions and services focused on education, workforce development, and innovation acceleration. Let me assure you that most of those solutions are applicable to other business sectors as well. Before I discuss the details of our programs though, let me begin by describing my previous Iowa experience and how it has shaped the work of the Institute. Prior to joining The Manufacturing Institute, I had the honor of serving as the Assistant Secretary of Labor for Employment and Training. Included in my agency were the programs that provided job training and unemployment insurance as well as the special programs designed to respond to mass layoffs and plant closures. In early 2006, it was announced that Whirlpool had purchased the Maytag Corporation and that it was closing Maytag s headquarters and manufacturing operations in Iowa Association of Business & Industry The Manufacturing Institute Page 1 June 9, 2010

2 Newton, Iowa. This was, of course, a tremendous blow to Newton whose economy was almost entirely based on the jobs Maytag provided. Unfortunately, we had seen more than a few similar examples of such plant closures, so when the Mayor of Newton came to my office, I had prepared the usual assortment of programs, grants, and emergency funds to respond to the situation. What followed though was the most extraordinary meeting of my time at the Labor Department. Mayor Allen said he appreciated the support we were offering but, frankly, he had no idea what he was going to do with the money. The primary employer and economic driver in the region was gone and, more important than getting a lot of money for training, what he really needed was to figure out what came next. After years of hearing organizations, cities, and states ask for money, it was a young, part-time mayor who was the first to say no. Help me develop a plan and then we ll figure out what money we need. At the time, we were engaged in a national initiative to better integrate the efforts of workforce development, economic development, and education. Our theory was that an educated and skilled workforce could drive a regional economy and economic transformation. But this situation was different. Newton was, in effect, starting from scratch and needed funds to map their assets and develop a strategic vision and plan to attract new job creators to their region. So after traveling to Newton and meeting with the leaders of the region, my team and I stood in the parking lot and figured out a way to get Newton the funds and support they needed to start this planning process. I know they still have a ways to go, but I was very excited last year to hear that the President was visiting a manufacturer of composite wind blades that the regional leadership team was able to attract. While Newton may have been unique in the way they approached their situation, they were just one of many communities experiencing similar economic anxiety and uncertainty. It probably doesn t surprise you that most of these towns had been heavily dependent on manufacturing. For more than a century, manufacturing had been the bedrock of America. It had created the wealth that lifted the majority of Americans into the middle class and provided the tools and machines that secured our freedom. Manufacturing s success was also its biggest challenge though, because peace and prosperity led directly to the globalized economy we know today. Countries all around the world, with a population willing to work for far less than Americans, now competed with U.S. firms. The result was inevitable as low skill jobs fled the U.S. and companies were forced out of business. Iowa Association of Business & Industry Page 2

3 Contrary to conventional wisdom, the major restructuring of the U.S. manufacturing industry did not signal its death. Instead of producing large quantities of relatively low value goods, U.S. firms adapted and started producing more specialized, high value goods. This is reflected in the amount of advanced machinery, computers, and robotics now found on nearly every shop floor. This focus on value and quality has kept the U.S. the global leader in manufacturing, producing over 22% of goods worldwide. China, with all the press and concern that it generates, stands at 14%. Incredibly, the U.S. share of manufacturing has not changed in 25 years, though nearly 40% fewer individuals work in manufacturing. That is a testament to the innovation and value that can be found in today s industry. This move up the value chain makes manufacturing as important today as it was in the past. Towns like Newton and many others across the Midwest understand that while manufacturers may no longer be able to employ entire towns, they can still make whole town employable. The value added by manufacturers and the amplifying effect of research and development combine to give manufacturing the greatest multiplier effect of any industry in the country. Investing in manufacturing creates jobs all across the economy. Continuously producing high value goods is not an easy process, however, because once a good has been on the market, competitors and imitators can find ways to make it for less. Our leading position is dependent upon our on-going ability to innovate. We have to always push the envelope and create new things with even greater value. But here s the thing about innovation there no manual or formula that can program a machine to innovate. It is almost entirely a human process. It is men and women using their skills and creativity to design and create new things. Innovation therefore, is directly dependent on the quality of your workforce. For many manufacturers and most other sectors, the workforce is already a growing concern. In surveys done by The Manufacturing Institute, companies consistently rate finding skilled workers as one of their top concerns. Even during this recession, nearly one-third of manufacturers said they faced a moderate to severe shortage of skilled workers. The national landscape doesn t offer a great deal of hope either. Fewer than one-third of parents say they would encourage their children to pursue a career in manufacturing and, with the overall decline in vocational and technical education in schools, fewer students are exposed to manufacturing or understand what a career in manufacturing really means. Iowa Association of Business & Industry Page 3

4 Add to that the coming baby boom retirement and a national dropout rate that hovers around 30% and the challenge quickly grows even greater. To help our industry begin to meet this challenge, The Manufacturing Institute has created a system designed to build the pipeline of qualified workers and remove some of the uncertainty and costs associated with hiring new workers. To develop our solution, called the NAM-Endorsed Manufacturing Skills Certification System, we joined with several other leading industry groups last year to create a system of nationally portable, industry-recognized credentials. These credentials -- and the training required to obtain them -- certify that an individual possesses the basic skills required to work in any sector of the manufacturing industry from aerospace to biopharma, from metalforming to alternative energy. This certification system is designed to be integrated into high school and community college degrees programs of study. Our system can be envisioned as a pyramid of skills certifications, with an initial focus on skills required for all entry-level jobs in manufacturing today: Personal effectiveness skills; Foundational academic competencies for manufacturers, those are applied math, reading, locating and using information; General workplace competencies which cover the fundamentals of business; And, the industry-wide technical skills related to basic manufacturing processes including production, logistics, quality assurance, safety and health, and technology. The foundational competencies in the first tiers are grounded in ACT s National Career Readiness Certificate. Manufacturers believe every student should graduate from high school with an NCRC and their diploma. If they do not graduate with the career readiness certificate, community colleges should offer it in their programs of study. Martin has been instrumental in making our partnership happen and providing the Skills Certification System with the national recognition and credibility that comes with his organization. The technical skills credentials in our manufacturers system align to the American Welding Society s Certified Welder, the Manufacturing Skill Standards Council s Certified Production Technician, and the National Institute for Metalworking Skills Machining and Metalforming certifications. Finally, the Society of Manufacturing Engineers Engineering Technologist certification caps our entry-level skills system. These stackable credentials have been aligned and translated into corresponding educational levels. We are now developing version 2.0 of the Skills Certification System that will define and credential the more specific skills required for positions in each of the 14 distinct sectors of Advanced Manufacturing. Iowa Association of Business & Industry Page 4

5 Today, 25 states are in the process of implementing or strategically planning implementation of this system. The Bill & Melinda Gates Foundation provided The Manufacturing Institute with $1.5 million to deep-dive into four states where their community colleges are aggressively aligning their educational and industry certification pathways. While on its face, the idea of a skill certification system may not seem transformational, it is in fact reforming education. The integration of nationally portable, industryrecognized credentials into degree programs will ensure the product from our educational system has real value in the workplace. These credentials greatly reduce the risk associated with hiring new employees a decision I ve heard manufacturers describe as a million dollar bet when the total expected output by that worker is calculated. The credentials will also help to professionalize our careers, give workers a defined education path to advancement within a company, and provide the security of a national industry certification that validates their skills for future employers. Finally, though I believe the value of our Skills Certification System stands on its own merits, I think there is another reason why manufacturers should embrace this system. For the last 25 years, the concept of lean manufacturing has been endorsed as the answer to the industry s woes. Business process experts examined every aspect of the manufacturing operation and trimmed excess capacity, inventory, and procedures. But this process has now run its course and there is little if any additional cost savings that can be gained from yet another round of leaning. To find the next generation process improvement, manufacturers are going to have to look elsewhere. I believe the only choice is the workforce. Human resource departments are one of the last places where our fathers and even our grandfathers would recognize the operations. We post positions on job boards, wait for applications to come in, select the best -- though how is more art than science -- and then send them to a training program while simultaneously learning on the job. You should be able to see the trouble ahead as your most senior workers retire and the supply of talent becomes pretty meager. Now manufacturers have the opportunity to entirely rethink how we approach human resources and get ahead of what is going to be an economy-wide competition for talent. Young people today want to contribute immediately, know the value of their work, and see clear paths to promotion and greater earnings. More than any other industry, manufacturing can provide that opportunity. Iowa Association of Business & Industry Page 5

6 The time is also right to engage community colleges and universities. Tighter state budgets are starting to dramatically impact their old revenue models and we can offer a different approach that leads to the attainment of a credential in less time and with a greater value in the workplace. Manufacturers today have a unique opportunity to create and shape a reliable supply chain for their workforce just as they would for the rest of their business needs. It is an opportunity we should not pass up. For businesses, you are in the driver s seat to take care of your workforce and ensure your partners in education and workforce development deliver an educated and skilled workforce, able to compete in the 21 st century economy. I know Mary and Vermeer Corporation have been thinking a great deal about this issue and she would like to describe their experiences. So let me turn it over to her and we can take questions after her presentation. Thank you for inviting me to speak today. Mary, the floor is yours. Iowa Association of Business & Industry Page 6