2015 report shows region’s manufacturers are poised for growth, but still struggle with workforce issues
Story by Robin Driessen Bruecker
Manufacturing isn’t an industry often considered sexy. There are some TV shows like How Do They Do It? and How It’s Made, and hopefully they’re improving the coolness factor with the next generation of workers.
We’re all heavily impacted by manufacturing. In the New North alone, manufacturing makes up 26 percent of the region’s gross domestic product. That’s a serious portion of the economic pie, enough so that nearly a decade ago regional manufacturers banded together and formed the Northeast Wisconsin Manufacturing Alliance as a collaborative forum to address issues involving workforce, environment and government regulations, among others.
For the last five years the alliance has released an annual manufacturing vitality index for northeast Wisconsin surveying hiring, skill shortages, expansion, modernization and financial health. This past fall, Business Success Center staff at the University of Wisconsin Oshkosh surveyed the CEOs of 151 New North manufacturing companies with at least 25 employees and annual revenue of more than $3 million. The vitality index enables a look at how far industry has come and where it’s going, and what has improved from year to year or issues that need to be addressed.
“The vitality of the region is extremely important to the New North, when one considers that one out of four people work in the manufacturing industry in this region,” said Ann Franz, director of NEW Manufacturing Alliance.
The results are in
Among those who responded to the survey, 66 percent saw a sales increase during the past year, while 96 percent expect to be healthy or “quite healthy” in 2015. There’s a strong outlook for hiring, sales growth and capital investments in the year ahead. Plant modernization, expansion and hiring plans all show an increase over previous surveys. Facility modernization is a positive sign that those companies plan to remain in the New North, Franz pointed out.
“The vitality index tells a very positive message about the strength of manufacturing in the New North,” said Bill Bartnik, director of manufacturing systems for Plymouth-based Sargento Foods Inc. and also the 2015 chair for the NEW Manufacturing Alliance. “With three manufacturing facilities, our corporate headquarters and a technical center all located in this region, Sargento Foods shares the positive outlook summarized in the vitality index. In the past few years we have had facility expansions and modernization projects at all locations. We are expecting our company growth to continue in the New North.”
Mike Kawleski, public affairs manager for Georgia-Pacific – one of the biggest employers in the Green Bay area and an alliance member – noted “Georgia-Pacific’s situation mirrors that of many other manufacturers in northeast Wisconsin. One area is investment – Georgia-Pacific’s Green Bay operations continue to receive capital to help modernize our facilities, some of which have been operating in the city for more than 100 years,” formerly as Northern Paper Mills and Fort Howard Paper Company.
In addition to productivity, efficiency and product quality, investments are also directed to infrastructure, Kawleski said. “This may not necessarily help us produce even one additional case of product, but it’s important to our company’s long-term viability.”
One current example is a multimillion investment for sustainability renovations at the Broadway mill. Part of this $80-plus million project includes a natural-gas boiler that replaces the mill’s biggest coal-fired boiler, and more efficient environmental controls for the other coal-fired boilers. A new electrical substation has also been constructed. When complete, these upgrades will have a significant effect on the mill’s environmental footprint, reducing its sulfur dioxide and nitrous oxide emissions by 80 percent, according to Kawleski.
“We are also replacing two existing wastewater clarifiers in our onsite wastewater treatment plant with two new clarifiers,” he added. “This allows us to continue to recycle two-thirds of the water we use to manufacture paper products, and to take in water from the Fox River and return it cleaner than when it left the river. In other words, we feel that modernization also means continuing to be a good neighbor in the community in which you operate.”
The hiring game
Finding skilled workers continues to be an issue, with 72 percent of the region’s manufacturers concerned about finding the necessary talent in skilled trades including welding, industrial maintenance mechanics and computer numerical control machining. Many have issues finding workers with basic communication skills and a good work ethic or attendance ethic.
“As anticipated, the skills shortage continues to be a concern for everyone in the area,” noted Bartnik. “In our region over the past several years, I’ve seen manufacturers take a more proactive approach towards workforce development. We work closely with the NEW Manufacturing Alliance to make sure the incoming and existing workforce understands what an exciting and fulfilling career you can have in manufacturing. We’ve partnered with our K-12 schools and two- and four-year colleges to make sure we stay aligned. The skill sets we need are changing as fast as technology changes.”
Franz said the latest hiring projections are the highest manufacturers have seen in the five years of the vitality index.
“The concern is that 72 percent believe they will have difficulty finding talent for their open positions,” she said. “The alliance believes this is due to a few reasons, including a lower unemployment rate and a greater demand for talent due to retirements and growth. The technical colleges have vastly increased the number of graduates in manufacturing-related programs, but the demand is so great in the New North that we need more graduates than ever before. It is critical that parents, educators and job seekers understand the labor demands in this region.”
According to the new study, positions with the most demand include machinists, engineers, sales representatives, welders, maintenance mechanics and IT professionals. Most of these positions – if not all – offer highly competitive wages. “Manufacturers wages are on average over 20 percent higher paying than other private industry sectors,” said Franz.
Employment issues also caught the attention of Scott Kettler, general manager of Neenah manufacturing operations for Plexus Corp. and the past chair of the alliance.
“Interestingly, for the first time since the index was started, general labor was listed in the top 10 difficult-to-find positions which Plexus and a majority of the NEW Manufacturers Alliance member companies felt the impact of throughout 2014. This trend will continue into 2015 as we continue to see a strengthening economy. As a result of this, there is a lot of focus on employee and employee engagement to ensure we have a workforce for the future.”
One of the steps Plexus has taken is to form a partnership with Fox Valley Technical College, Fox Valley Workforce Development Board and the state’s Fast Forward grant program to develop skilled soldering workers. Kettler said the collaboration anticipates 70 students will graduate from the program, which began last February and continues through this coming July.
“We’re very proud of our partnership with Fox Valley Technical College and we feel that this will not only help us in filling the immediate needs we have for skilled soldering expertise, but it positions us well for the future as this is a key skill set within our factories and what we do, especially in our defense/security/aerospace sector,” noted Kettler.
Like other area manufacturers, Georgia-Pacific faces workforce challenges. The company’s recruiters consider virtue and talents when deciding on job candidates.
“Talents are those skills that individuals have and have been trained to do, so we also have difficulty hiring enough technically-trained people such as engineers, as well as front-line technicians who operate our equipment,” Kawleski said. “This problem comes from two directions: There are not enough students in the pipeline pursuing manufacturing careers, plus, in our case, we lose more than 100 employees each year, mostly to retirement. So it’s a challenge to manage the transfer of their expertise and experience to others.
“On the virtue side, we look for employees with the employability skills they need for today’s workplace – communication skills, the ability to work in a team, work ethic, etc. In Georgia-Pacific’s parlance, we desire employees who’ll act as principled entrepreneurs and make decisions as if they were business owners.”
Data from the annual manufacturing vitality index has led to positive actions, Kawleski said, spurring manufacturers to work together – through the NEW Manufacturing Alliance and other organizations – to promote manufacturing and manufacturing careers. Additionally, educators have greater understanding of manufacturing as a high-tech industry that offers exciting, well-paying careers. He indicated educators have responded with more STEM-related curricula that will help train future employees.
Bay Link Manufacturing, a learning lab run by students at Green Bay West High School, is one example Kawleski referenced.
“Students will not only learn technical skills there, but also learn from real-world situations they’ll encounter, such as working with customers, leading a team, marketing their services and making business decisions,” Kawleski said.
In another example, the entire staff of Green Bay Southwest High School toured the Broadway mill of Georgia-Pacific for one of the school’s monthly professional development sessions.
“The educators not only learned about what different equipment did and what products it made, but also about the different careers in those areas, the type of education needed, what skills we look for in employees, etc.,” said Kawleski. “As these educators interface with students in the future, they can speak more knowledgeably about the industry and what it can offer.”
With so many strong manufacturers and related careers in the region, Bartnik said educating the general public about the positive realities of manufacturing careers is necessary.
“The vitality index is part of that story,” Bartnik said. “It highlights the strength of manufacturing and where the biggest skill gaps are. We need to use that to get our talent pool motivated and interested in manufacturing.”
Robin Driessen Bruecker has been writing for magazines and marketing departments since 1995.