The sector that provides the majority of tooling, fixtures and molds required to manufacture automotive components is facing a crisis.
While companies have struggled with a lack of skilled labor across the manufacturing sector in recent years, automakers and suppliers have started to highlight an acute talent shortage in the tool and die industry. Outside of engineering and design, tool and die production is the first step in the process for making components for vehicles.
“It’s an absolute crisis,” said Laurie Harbour, president and CEO of Southfield-based Harbour Results Inc. “The average age of a toolmaker is well over 50. … We’re adding a couple thousand (people) a year, whereas we’re losing tens of thousands a year.”
With waves of retirements on the horizon, automakers, suppliers and dedicated tool and die companies alike are scrambling to attract new talent into their plants, particularly as the industry needs tooling well in advance of launching upcoming new models.
“I’ve not seen the automakers this engaged and this concerned about this issue ever before with tooling,” Jay Baron, president and CEO of the Center for Automotive Research, said last week during the organization’s T3 Manufacturing Summit in Grand Rapids.
For General Motors, the tool and die talent crisis plays out in its employee demographics on the shopfloor. Approximately 65 percent of the Detroit-based automaker’s diemakers and roughly 81 percent of its toolmakers have more than 30 years of experience.
General Motors operates one in-house tool shop, the North American Tool Center based in Flint.
“Like many of you, I’m sure you find many of your college grads to be really talented, very capable, very technically savvy,” Dan Clarkston, director of the Global Die and Body Center for General Motors, said during the event. “They come into the workforce and add a lot of value. But they’re also not necessarily interested in a long-term career in tool and die. They really treasure being able to move on to different types of opportunities.”
Companies in the automotive sector are using a variety of strategies to manage the lack of tool and die workers. Many have employed dedicated recruiters, who speak to children in middle school and high school about the benefits of pursuing a career in the tool and die trade.
Other companies are investing in more automated tool and die equipment, similar to production machines, which can run 24 hours a day, seven days a week with little interference.
However, most companies are simply learning to do more with less by injecting the lean manufacturing principles into their tooling business, Harbour said.
“That kind of operational efficiency in these plants is the other combative to the skilled labor gap,” she said. “I have to get better at what I do so I need fewer skilled people.”
While workers in the tool and die industry can earn up to six-figure salaries with overtime pay, some experts point to stagnant wages as one reason the industry struggles to attract the skilled workers it needs.
Essentially, the wages many shops offer are more befitting of less-skilled workers, compared to the expertise required in the tool and die trade, said Susan Helper, a professor of economics at Case Western Reserve University in Ohio who studies the automotive industry.
“I would like to have a Lexus or a Cadillac, but I’d only like to pay $15,000 for that car. Do I have a Lexus shortage or am I simply unwilling to pay the market price?” Helper said during a panel discussion at the T3 Manufacturing event in Grand Rapids. “I think that’s something we need to think about.”
Helper maintains that the wage issue stems, in part, from a misunderstanding of the impact of inflation over the years.
“We think of a wage of $40,000 or $50,000 as a good wage,” she said. “That is the median income in the U.S. today. I think in tooling, we’re not looking for the median person. It’s clearly a much better wage than the production worker wage these days, but it’s not the kind of person who is going to take the industry forward.”
Tool and die makers in the automotive industry earn an average of $56,010 a year, according to 2016 data from the U.S. Department of Labor.
Although many automotive industry executives tout how far the sector has come with technology and cleanliness over the years, many parents still see it as volatile. Despite the inherent cyclical nature of the business, the industry can do more to reduce those peaks and valleys, Helper said. If they succeed, parents may be more likely to encourage their children to pursue careers in manufacturing.
“Parents are not crazy to be leery about sending their kids into this industry,” Helper said of the automotive industry’s cyclical nature. “I think it’s not just a marketing image problem, it’s also a reality problem.”
INVESTING IN TRAINING PROGRAMS
While offering tool and die workers higher salaries may help attract young people to the field, employers also likely will need to make long-term investments in training programs to grow their workforce.
By her calculations, Helper believes the industry could provide $100,000 worth of training to the 6,800 new employees needed to fill the talent gap over the next decade. That cost equates to about $5 per vehicle, a figure that compares to an advertising budget ranging between $250 per vehicle and $1,200 per vehicle, she said.
“We don’t have a car to advertise unless we get this tooling problem solved,” Helper said. “It seems to me that there is room for a deal here.”
In addition to training new employees, tool and die makers will need to continue to invest in their current workers, said James Jacobs, president of Macomb Community College in Southeast Michigan.
In a self-administered study polling 60 manufacturing companies from a variety of sectors, the community college found 25 percent had ceased offering employees programs to continue their education, Jacobs said.
“Why aren’t more individuals coming from the companies that are currently employing them and coming to school?” he said. “Education, as an internal way of mobility, was not being practiced very much by those companies.”
Regardless of the specific strategies tool and die companies use to attract and retain talent, it really comes down to those organizations engaging with young people in their communities, Harbour said.
“It’s plants that are getting out on their own that are making the difference,” she said. “If they’re sitting back waiting for the MEDC (Michigan Economic Development Corp.) to help them, that’s never going to happen.”