GRAND RAPIDS — After a decade of growth in manufacturing, the sector still finds itself having to defend its worth to parents and high school counsellors.
For industry watchers, this challenge in developing a talent pipeline points to more foundational issues the companies and society must address.
“It’s frustrating that we cannot get through people’s heads — parents, teachers, etc. — what good jobs really are out there,” said Birgit Klohs, president and CEO of Grand Rapids-based The Right Place Inc. “The image that continues to be around skilled trades — it has to be valued again, like we used to. That is, if you are learning how to be an electrician, that has as much value as studying English.”
The image problem is all too familiar to David Cole, chair of the Detroit-based AutoHarvest, who’s spent his career studying and analyzing the automotive industry.
“One of the things that we have done is sort of denigrated the hands-on type of jobs. That’s particularly true of parents,” Cole said. “The only hands-on I want my kids to do is punch keys into a computer.”
Now more than ever, manufacturers must combat that image if they are to solve any of their acute workforce challenges, particularly as Michigan’s unemployment rate drops to an expected 3.2 percent to end 2017, according to University of Michigan economists.
“It’s a sales job that we have to do,” Cole said. “It’s kind of ironic. I grew up and went to public schools in Detroit, and in grade schools, I had a woodshop class. In high school, (I had) metal shop, a machine shop, drafting. They are really rare in schools today.”
Cole advised manufacturers to get active in advertising their companies to future employees, just as they would to potential customers.
For many manufacturers throughout West Michigan, this solution starts in small steps, like offering tours of their shop floors to various schools.
“If we can get these kids in the factory and give them a walk around, no, it doesn’t fit everybody, but for those that it does fit, they’re hooked,” said Patrick Greene, president of Cascade Die Casting Group Inc. “We’ve got to create opportunities, and then we need to keep recreating ourselves and find new ways to keep them motivated. I firmly believe that automation is one of those things that keeps them interested and motivated in what they’re doing because it’s ever-changing.”
As issues like NAFTA and taxes dominate Washington, D.C., industry advocates cite one issue — talent — as trumping all others for the manufacturing sector.
“The biggest challenge facing manufacturers is the skills gap and the talent gap,” said Mike Johnston, vice president of government affairs at the Lansing-based Michigan Manufacturers Association (MMA). “With the aging demographic and not a robust talent pipeline in terms of the K-12 system delivering the talents that the largest sector needs, there truly is a challenge for companies to find workers to grow.
“If you don’t have workers, you can’t grow.”
Consequently, companies are working more closely with their school systems, Johnston said. One way the MMA is addressing this need is by partnering with the SME Education Foundation’s Partnership Response In Manufacturing Education (PRIME), an initiative that identifies the needs of manufacturers and then trains the next generation of workers, Johnston said.
“The PRIME program … designs a customized curriculum for local schools,” he added. “The high schools will be creating a talent pipeline designed for the skill sets needed by the local manufacturers.”
Even though finding talent continues to be a paramount challenge in Michigan, business and consumer optimism remain high, according to Johnston.
“I think people are feeling confident in the strong economy through (2018) and looking positively into (2019),” he said. “I think the last downturn did a lot to educate businesses about what it takes to survive, and, frankly, the strong survived and are really in the process of actually sucking up other businesses that maybe didn’t survive.”
OFFICE FURNITURE SEES GRADUAL GROWTH
Meanwhile, West Michigan’s office furniture industry is preparing for growth in the year ahead.
The Grand Rapids-based Business and Institutional Furniture Manufacturers Association (BIFMA) projects sales growth of 4.5 percent to 5 percent in 2018 for the corporate, education and health care segments.
That follows modest gains in the range of 2 percent to 2.5 percent this year, according to BIFMA, which bases its forecasts on IHS Markit data.
BIFMA President Tom Reardon said the gradual growth for the industry can be attributed to workstations getting smaller, real estate prices increasing and employers and tenants maximizing their space.
“Like the economy, it’s been a sluggish return from the (2008-09) recession — a gradual trudge out of that hole,” he said. “We are a very transient workforce. You don’t have to sit in the office. You can sit down and plug in wherever you value a workstation.”
One customer shift in recent years has been the blending of residential and commercial designs, Reardon said, noting that more casual offices are driving demand for products like couches, love seats and lounge furniture.
“The trend to the open (office) plan and trying to increase collaboration among workers created a lot of distraction, visually and acoustically,” Reardon said. “The residential-ization — the casualization of the workplace — and branding it to be a cool place to work, we see that trend continuing.”
AUTOMOTIVE FLAT FOR 2018
Despite a slight pullback in the automotive industry in 2017, U-M’s Research Seminar in Quantitative Economics projects light vehicle sales to level off around 17.1 million units, down from a record-high 17.5 million units in 2016. In 2018-19, U-M economists are calling for essentially flat automotive sales.
That comes as no surprise for many automotive suppliers, who saw the writing on the wall for the industry after consecutive years of growth.
“We started to see signs of the plateau in ’16,” said Jim Teets, president and CEO of Grand Rapids-based ADAC Automotive. “We knew it was coming, … but this plateau is nothing compared to ’08 and ’09.”
MiBiz Editor Joe Boomgaard contributed to this report.