Phil Biggs covers the automotive industry for NewsTalk 1340 WJRW
July 3, 2013 – 3:30 pm EDT
DETROIT, Mich. – This year the traditional two-week summer shutdown will be reduced to one week, as Ford joins GM and Chrysler to bolster production in what has turned into an excellent first six months in the auto space. With sales moving briskly so far in 2013, and the industry forecast looking robust through at least 2015, it is safe to assume that production will continue to match the pace of sales. But, as production grows – exponentially in certain regions of the world – the OEMs are struggling to develop a trained workforce that matches their diverse assembly line requirements. More than ever, labor and management will need to work closely and without acrimony in order to meet the industry workforce needs. Here are my observations:
Factory requirements are growing even as the supply chain continues to shrink. The technical requirements of the shop floor have grown dramatically while both OEM and supplier workforces have seen their numbers of skilled tradespeople dwindle. This is a major issue as the industry has begun the climb back to positive volumes. The ranks of expert tool and die makers, and the specialized engineers who make jigs, fixtures, dies, molds, machine tools, cutting tools used in manufacturing processes, are depleted. Worse, nowhere are these artisans mentoring new young talent to backfill their positions…and so the craft is vanishing. Coupled with the drastic loss of Tier II and Tier III suppliers since the late 1990’s – from 20,000 to less than 4,000 today – the trained and skilled workforce gap in the auto space is now causing great concern as automakers make future volume projections.
The advent of new powertrain and on-board electronics continues to disrupt workforce planning needs. Not only have the automotive suppliers seen 4/5ths of their numbers disappear but the industry is experiencing a supply chain demographic shift at the same time. Many of the stamping and die-casting plants have been replaced by a wave of new technology providers: organic suppliers, bringing new on-board technology and powertrain variants to the auto space, are arriving on the scene in all corners of the globe. There is much to be excited about as the once moribund auto industry is experiencing massive transformation with the vehicle becoming the nexus of connectivity. No longer does a car simply provide conventional transportation, now it is the link between average consumers and their iPhones, tablets, and other electronic devices.
But with this exciting transformation there is a dark side to supplier metamorphosis, at a time when there is an extreme lack of workforce readiness, re-training and new skill development. The labor disruption in turn fosters uncertainty and scarcity, and makes future planning even more challenging than it already is. The vast amount of content in the vehicle targeted to young new car buyers is a selling point, but automakers and suppliers must connect this trend to the Echo Boomers and then make them realize how cool cars are to manufacture as well as to drive. The industry must make a convincing argument to Millennials that this is not your grandfather’s automotive industry any longer.
Vehicle assembly lines today require new age skills – laser welding, robotics, systems-software programming, and J-I-T process improvement – and these skills are not being taught anywhere, nor do many of the Echo Boomers care to learn them currently. This not the grimy, dark, sometimes dangerous assembly line work of the 1930’s…this is advanced manufacturing and the need to get workers re-trained to take these plant jobs couldn’t be more urgent.
In the midst of this technology and labor shift, Bob King and the UAW must focus on its value proposition to the transplant and domestic OEMs. Rather than demonizing their corporate partners, the UAW would be well-served to take a more active role in re-inventing the skilled trades, which in turn, will stimulate higher wage rates and, potentially, increase union membership in a positive way. Bob King should be asking…where are the trade schools? How can the UAW support the companies that hire and educate their tradespeople? How can the UAW encourage individual and corporate participation in the skilled trade unions? How can public-private alliances be created to build the ranks of much-needed craftsmen?
Skilled tradespeople typically learn their craft through a combination of academic coursework and hands-on instruction, with a substantial period of on-the-job training that is likened to an apprenticeship. There is a role for the UAW to work closely with community colleges and other public teaching institutions to create real-world, necessary curricula that meet the needs of the OEMs. It is not their job alone…the automakers and state colleges should be heavily investing in these training initiatives alongside the trade unions. For example, Tennessee Governor Bill Haslam made a direct connection between his community colleges and the OEMs – Volkswagen, Nissan, Toyota, and GM – to identify their technical requirements and enable the courses and local training to begin immediately on Tennessee campuses or for college credit at the automakers’ facilities. Bob King should be right there investing his time, his dollars, and his 100% support.
Realizing workforce preparedness in the auto space can’t happen soon enough, as technology now moves forward in six-month cycles not two years or longer as it did in past decades. Finding the right balance between management, labor, and academia that yields shop floor cooperation and vision in the years ahead will enable American workers to fill these new jobs.
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