Workforce and Education

Permanent restoration of R&D expensing is a top priority for manufacturers in Minnesota and the U.S. in general. That’s why Rep. Pete Stauber (R-MN) plans to sign onto the American Innovation and R&D Competitiveness Act as a cosponsor, he recently told the NAM.

What’s going on: Rep. Stauber discussed the importance of competitive R&D tax policy, along with the regulatory onslaught targeting manufacturers and the need for permitting reform, during a recent NAM-organized facility tour of Clow Stamping Co. in Merrifield, Minnesota.

• “Full expensing for R&D costs in the year in which they are incurred is essential for innovation and competition,” Rep. Stauber told the group, which included Pequot Tool & Manufacturing CEO Karlo Goerges in addition to NAM representatives and Clow Stamping leadership. “It’s imperative that it be reinstated as soon as possible.”
• The American Innovation and R&D Competitiveness Act would restore immediate R&D expensing permanently for small businesses.
• “Full R&D expensing was instrumental in our growth until the law changed last year,” said Clow Stamping owner Reg Clow. “It’s definitely having an impact on us. Our expenses have gone way up.”

Workforce woes: Clow is nearing the end of a $20 million facility expansion that will add 107,000 square feet of floor space and at least 60 jobs—but finding enough workers to fill those jobs won’t be easy.

• By implementing automation in its shipping and receiving departments, the company will be able to both increase its shipping output without additional workers and channel its current hiring efforts toward filling open positions with the production departments, Clow said.
• This is a short-term solution, however, and manufacturers like Clow Stamping need policymakers’ help to ensure the industry has enough skilled workers for the decades to come.
• During the facility visit, the group discussed the importance of educating younger generations about the many opportunities available in manufacturing, via initiatives like Creators Wanted. This award-winning perception campaign undertaken by the NAM and its 501(c)3 workforce development and education affiliate, the Manufacturing Institute, aims to recruit 600,000 new manufacturing workers by 2025.

The last word: “Manufacturers account for more than 55% of all private-sector R&D spending in the United States,” said NAM Managing Vice President of Policy Chris Netram.

• “Policies that encourage this innovation will allow the industry to continue to drive our economy forward. The NAM thanks Rep. Stauber for his support of the American Innovation and R&D Competitiveness Act and calls on Congress to swiftly pass this bill.”

Last week, Saint Paul College in St. Paul, Minnesota, which boasts a student body that is 65% people of color, became the 19th stop of 20 for the Creators Wanted Tour, a joint project of the NAM and the Manufacturing Institute, the workforce development and education affiliate of the NAM.

Over three days, with Union Pacific as the lead sponsor, the stop drew more than 600 visitors, from students to educators. Meanwhile, 42,000 online signups in Minnesota helped the campaign surpass 1.5 million nationwide from students and career mentors interested in modern manufacturing careers.

Twin Cities kickoff: Union Pacific Executive Vice President of Marketing and Sales Kenny Rocker gave the keynote address at the kickoff event, emphasizing the reward of manufacturing careers. He was joined by MI President and Executive Director Carolyn Lee, Saint Paul College President Dr. Dee Dee Peaslee, Minnesota Chamber of Commerce President and CEO Doug Loon and Trane Technologies Vice President of Product Management Dave Molin.

• “When I talk about opportunities, I’m talking about really good-paying jobs … At Union Pacific, we’re talking jobs that are … averaging over $100,000 a year, and that’s without benefits, and so you just really have an opportunity to make an impact from that perspective,” said Rocker.

• “At Trane Technologies, our vision is to boldly challenge what’s possible for a sustainable world,” added Molin. “It is the engine of our company, and we live it every day. And to do that, we need bright minds and the best minds in the world. We need diverse thinkers, we need creators, and our doors are open to everyone.”

• Notably, leaders from key government business and workforce partner organizations attended the kickoff, including the Minnesota State Advanced Manufacturing Center of Excellence, Minnesota Black Chamber of Commerce, Minnesota Parent Union and St. Paul Area Chamber, representatives from the offices of U.S. Reps. Brad Finstad (R-MN-1), Angie Craig (D-MN-2), Dean Phillips (D-MN-3), Betty McCollum (D-MN-4) and Michelle Fischbach (R-MN-7), Mayor of South St. Paul Jimmy Francis and State Reps. Jon Koznick (R), Emma Greenman (D) and Samantha Sencer-Mura (D).

Experience and exploration: Students delved deep into immersive activities, from solving manufacturing-related puzzles in the Creators Wanted mobile experience to virtually navigating a locomotive through Union Pacific’s simulators. Equally captivating was the sight of the actual railroad track, which was complemented by insightful career anecdotes from Union Pacific professionals.

• Eighty-seven percent of students surveyed reported a significantly improved view of modern manufacturing careers after completing the immersive experience.

Live Q&A sessions: The stop also offered structured opportunities for students to learn about manufacturing organizations’ support for the next generation of talent, along with the importance of mentorship and personal development in shaping successful careers.

• The first session, featuring two Union Pacific senior managers—Amy Bang, Sr. manager of diversity and inclusion, and Ken Kuwamura, Jr., manager of talent acquisition—and Saint Paul College instructors, zeroed in on the crucial roles of mentorship, diversity and passion in career selection.
• The second session, with Jake Yernberg, automotive instructor, Saint Paul College; Caitlin Bundy, manager of corporate sustainability, Union Pacific; and Preeti Subramanian, senior product manager, Trane Technologies, accentuated the pivotal role of manufacturing in tackling global challenges. Panelists pointed out the advantages of the manufacturing sector, citing competitive pay and the sector’s potential in addressing global issues, such as sustainability and climate change.

Interactive Learning: Everfi^®, Ecolab and Schwan’s joined Union Pacific in bringing in representatives to give students career advice—and offer activities to spark their curiosity.

• Everfi^® showcased a new digital education program, “Future Creators,” co-developed with the MI and Union Pacific, to give middle and high school students a peek into STEM careers.
• Saint Paul College also took students on a tour of its robust Trades and Technical Education program.

Beyond the Tour: The Twin Cities event is a part of Union Pacific’s overarching “Careers on Track” initiative, which aims to inspire more women and youth to pursue modern industrial careers, and the Creators Wanted campaign’s sustained drive to enhance perceptions of manufacturing careers in the United States and empower more people to create the future.

The last word: “I want all of you out here, the students, to have an opportunity to go out there and win and compete and further your careers and do well in life,” said Rocker, echoing a theme the Creators Wanted Tour has promoted since its inception: manufacturers and manufacturing care about students and their future. 

Next up: The pioneering Creators Wanted Tour concludes next month, Oct. 17–21, at the Circleville Pumpkin Show in Circleville, Ohio. 

For Husco—a family-owned manufacturer of hydraulic and electro-mechanical control systems—building a strong, cohesive culture is the key to retaining talent.

The Waukesha, Wisconsin, company is among the many manufacturers that find retention to be a top business challenge, as the NAM’s quarterly Manufacturers’ Outlook Survey shows. So how do they create this cohesion?

It all starts at the top: Angela Stemo, vice president of global human capital at Husco, says the company has always prioritized trust and communication between employees and their managers.

• “Our retention has grown and strengthened because of the emphasis we place on our leaders having strong relationships with their employees—get to know who they are, find out what their interests are,” said Stemo.
• The company also lays the groundwork for strong bonds between coworkers, which often flourish outside of work as well. “Once they feel connected to people within the organization, they’re going to want to stay,” explained Stemo. “They’ve built friendships, they’ve built connections, and they feel really tied to the organizational culture.”

How they do it: Husco conducts employee engagement surveys once a year and holds occasional in-person focus group discussions to get feedback from employees.

• “As our organization becomes more diverse, we are offering surveys in more languages,” said Stemo. “We have a large Afghan population on our shop floor as well as many Burmese workers, so we’ve had our surveys translated into various languages for all employees to participate.”
• “For us, we really try to listen to what people say and what their suggestions are,” said Stemo. “If it’s something feasible and we can implement it, we try to figure out how to do so.”

Read the full story here.

The United Autoworkers union set a new strike deadline late last night, according to The Street.

What’s going on: In a video post on X, “UAW president Shawn Fain said [the union] would unveil more strike targets, with more union members participating, by noon eastern time Friday failing significant progress in talks with Ford, General Motors and Chrysler-owned Stellantis.”

• After negotiations for a new four-year labor contract failed late last Thursday, the UAW—which represents almost 150,000 U.S. autoworkers—ordered a walkout from vehicle plants belonging to the “Big Three” carmakers in Michigan, Missouri and Ohio.
• About 12,700 workers are now picketing assembly lines throughout the Midwest.
• Each of the vehicle manufacturers has put forth offers in recent days, and each has been rejected by the union, the demands of which include a sizable wage raise and a 32-hour workweek at 40-hour-a week pay.

Why it’s important: A 10-day strike of 143,000 UAW members against the three vehicle manufacturers could mean an economic loss of $5.617 billion, according to a recent report by Michigan-based consultancy Anderson Economic Group.

• A protracted strike this year would put “the state of Michigan and parts of the Midwest … into a recession,” Anderson Group CEO Patrick Anderson told the news outlet.

Our take: “ The economic harm produced by a strike goes well beyond GM, Ford and Stellantis,” said NAM Vice President of Domestic Policy Brandon Farris.

• “Numerous small and medium-size manufactures are already feeling the effects. The NAM encourages a swift resolution. Let’s get everyone back to work building products that our country relies on.”

The United Auto Workers union went on strike for the first time at all the Detroit “Big Three” carmakers early this morning, according to The Wall Street Journal (subscription).

What’s going on: “UAW officials initiated the walkout after failing to clinch new labor deals with General Motors, Ford Motor and Jeep-maker Stellantis for about 146,000 U.S. factory workers. Bargaining went late into the night, but the two sides remained too far apart to avoid a walkout at the 11:59 p.m. ET deadline.”

• Workers at a Ford Bronco plant in Detroit, a GM pickup-truck factory in Missouri and a Stellantis Jeep plant in Ohio were told to leave their posts.
• The three targeted facilities make some of the firms’ most popular vehicles. 

Why it’s important: Automotive manufacturing in the U.S. is among the most productive industries in the world, underpinning the American economy as a whole.

• In fact, a strike of 143,000 UAW members against GM, Ford and Stellantis could lead to an economic loss of $5.617 billion after just 10 full days, according to a recent report by Anderson Economic Group.
• In 2019, a 42-day strike at one of the three vehicle manufacturers put the state of Michigan into a quarter-long recession and resulted in an economic loss of $4.2 billion, according to The Detroit News.  

Our response: “The impact of this strike will echo far beyond the city of Detroit, as multiple economic analyses have demonstrated,” NAM President and CEO Jay Timmons said this morning. “The small and medium-sized manufacturers across the country that make up the automotive sector’s integrated supply chain will feel the brunt of this work stoppage, whether they are a union shop or not.”

• “American families are already feeling economic pressures from near-record-high inflation, and this will only inflict more pain. We urge a swift resolution to end this strike and avoid further undermining the strength of our industry and harming our broader economy.”

NAM in the news: Bloomberg (subscription),  POLITICO, Reuters (subscription) and Bloomberg Law (subscription) all covered the NAM’s response to the walkout.
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Discipline, reliability, a team-player mindset, leadership—manufacturers are looking for all these qualities in the talent they recruit. What if companies could tap into a population not only equipped with these skills but experienced in using them in high-stakes situations?

Well, the Manufacturing Institute—the workforce development and education affiliate of the NAM—has good news, if you haven’t heard it already: this population exists, and it’s military talent. Transitioning service members, veterans, National Guard members, reservists and military spouses have a wealth of skills and experience that translate easily into a manufacturing context.

So how can manufacturers reach these workers and make the best use of them? The MI recently convened both military and manufacturing leaders in Fayetteville, North Carolina, for its third Workforce Solution Series event, where they answered this question and offered a range of useful advice. Here are some of the highlights.

Generally speaking: Major General Eugene J. LeBoeuf, Deputy Commanding General, U.S. Army Reserve Command, highlighted the talents and skillsets that Army reservists can offer the manufacturing industry, including agility, a can-do attitude and a thorough grounding in engineering, logistics and mechatronics.

• With nearly 190,000 soldiers, the Army Reserve comprises much of the readiness force of the U.S. Army. Many of these reservists are underemployed or unemployed, which means they represent an opportunity for manufacturers.
• Manufacturers interested in hiring from this labor pool can partner with the Private Public Partnership Office, which connects companies with reservists at no cost.

Reaching military talent: Several panelists emphasized the importance of developing recruitment processes that encourage military talent to apply and interview for manufacturing jobs.

• “Make sure that the requirements you’re listing in your position descriptions are actually required. Do you really need someone to have a master’s degree to get the job done?” asked Rob Patton, vice president of Fayetteville Cumberland Economic Development Corporation.
• As a recently transitioned service member, James Goppert, HR business partner at WestRock, explained some of the challenges that military talent may face when entering the workforce. “Having to explain military skills and certifications to a civilian in an interview was strange. It would have been helpful to have someone on the other side who understood my experiences.”

Open to all possibilities: Jennifer Goodman, senior manager of talent initiatives at Coca-Cola Consolidated, drew on her experiences as a military spouse. “Military spouses are 92% women and have a 22% unemployment rate. That’s a huge labor pool that’s going underemployed or unemployed.”

• While relocation is often a concern for companies, Goodman points out that it does not have to be a disadvantage. “Think of manufacturers who have locations across the country. Maybe you can start a military spouse at one location and then move them to another. Or, if they’ve proven themselves after a few years, you could transition them to remote work.”
• “The benefits don’t stop with the one military spouse you hire,” she added. “We’re a very loyal community with great word of mouth and a larger referral network.”

The last word: “Don’t underestimate the value of an event like this Solution Series can have. You can take the information, energy and passion that you get from meeting with people who have the same goal of building a stronger economy and use it to power you forward,” said Nathan Huret, economic development director for Catawba County. 

Learn more: To get started—or continue—with hiring military talent, check out the extensive resources of the MI’s Heroes MAKE America initiative, which prepares prospective military workers for new and rewarding careers in manufacturing.

A persistent shortage of construction workers in the U.S. is slowing the completion of everything from single-family homes to major infrastructure projects, according to CNBC.

What’s going on: To meet labor demands this year, “construction firms will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring,” CNBC reports, citing data from Associated Builders and Contractors.

• “The construction industry averaged more than 390,000 job openings per month in 2022, the highest level on record, while unemployment in the sector of 4.6% was the second lowest on record.”

Why it’s important: The industry’s labor shortage is not likely to be resolved any time soon. When combined with rising materials costs, it will only worsen the backlog of projects, which is already at a four-year high.

What’s needed: The bipartisan infrastructure bill of 2021 allocated money for projects, but not for “enticing new workers … or training” them, according to CNBC. Another component of the solution: immigration reform, a policy the NAM has long advocated.

• “More money is going to need to be spent on training additional workers, bringing people into this industry,” a source told CNBC.
• Said another, “We should also be looking at ways to allow more people to lawfully enter the country and work in construction careers, whether that’s a temporary work visa program that’s specific to construction, or broader comprehensive immigration reform.”

Our take: “The record manufacturing construction activity seen in the U.S. is further straining an already tight labor market,” said Chad Moutray, chief economist at the NAM and director of the Center for Manufacturing Research at the Manufacturing Institute, the NAM’s 501(c)3 workforce development and education affiliate.

• “Leaders in the sector are trying to think of ways to differentiate themselves in the competition for talent. Such pressures—along with changing demographics—are likely to keep workforce challenges front and center over the coming years.”

A new overtime rule from the U.S. Department of Labor is likely to change some of the existing rule’s white-collar exemptions. NAM Vice President of Infrastructure, Innovation and Human Resources Policy Robyn Boerstling joined us to explain what’s happening.

The background: The overtime rule, part of the Fair Labor Standards Act, dictates that employees must receive overtime pay of at least time and a half for hours worked over 40 in a workweek. It contains exemptions for white-collar workers based on their salaries and duties. If an employee makes a minimum amount of money or is classified as an executive, administrator or professional, they are exempt from overtime pay.

• “The NAM has provided comments over the years to the Department of Labor and the Wage and Hour Division concerning the exemptions from Fair Labor Standards Act minimum wage and overtime requirements for certain executive, administrative, professional, outside sales and computer employees,” said Boerstling. “Manufacturing employees, on average, earn $92,832 in pay and benefits.”

The new action: A new overtime rule is expected soon, and employment law attorneys expect the U.S. Department of Labor to recommend higher salary thresholds for the rule’s white-collar exemptions.

What it means: A new overtime rule that raises salary thresholds for white-collar exemptions would make more employees eligible for overtime pay and potentially cause challenges for employers and even those employees who have worked to advance themselves away from hourly jobs and into salaried company positions. The current salary threshold is $35,568 per year.

Our take: Boerstling made the case directly to the Department of Labor during an April public listening session. “The NAM urges caution in any effort to expand overtime exemptions as manufacturers believe adjustments would be disruptive in a challenging economic and workforce environment,” she said.

• “The manufacturing workforce has tremendous autonomy and latitude in this labor market to address pay and compensation issues directly with their employers.”

Next steps: The NAM continues to work toward a regulatory solution but could have to take legal action to protect employers and manufacturers across the country. Check out the NAM Legal Center to learn how we are working to support our members nationwide.

The last word: “We think that any rulemaking that is being prepared for public release on overtime exemptions for certain white-collar workers should be paused and reconsidered until a later time when supply chain and inflationary challenges have subsided,” said Boerstling.

The International Monetary Fund raised its growth forecast for the international economy on Tuesday despite slowing activity in China, according to CNBC.

What’s going on: “In the latest update to its World Economic Outlook, the IMF raised its 2023 global growth prediction by 0.2 percentage points to 3%, up from 2.8% at its April assessment. The IMF kept [its] 2024 growth forecast unchanged at 3%.”

• The IMF expects inflation to improve, too, and sees core inflation “declining more slowly to 6% this year, from 6.5% last year.”
• IMF Chief Economist Pierre-Olivier Gourinchas wrote in a blog post Tuesday that “the signs of progress are undeniable.”

However … Global economic challenges remain on the horizon, the IMF cautioned, citing a less-than-robust Chinese economic recovery from the pandemic, weakness in China’s real-estate market and an expected contraction of Germany’s economy.

• In Germany, manufacturing output declined in Q1 2023.
• Across nations that use the euro, “[d]ata released Monday showed business activity shrinking at a faster pace than expected.”

Our take: “While there continue to be significant challenges in the manufacturing sector globally, it is encouraging to see signs of resilience—not just in the U.S. economy, but in other markets as well,” said NAM Chief Economist Chad Moutray.

For Ketchie President and Owner Courtney Silver, retention all starts with culture. “I’m really happy to be here” is a phrase she hears often on her shop floor—and it tells her that the work culture at her company is in good shape.

• “A culture of empowerment that’s built on trust really fuels our team I think,” said Silver, who is the chair of the NAM’s Small and Medium Manufacturers Group. “They find so much dignity and purpose in fulfilling our mission here at Ketchie.”

Maintaining a high-performing, motivated and engaged workforce is a top priority for the third-generation precision machine shop in Concord, North Carolina, and Silver has implemented a number of strategies to keep it that way.

Team recognition: Every Wednesday, during Ketchie’s shift meeting, employees have the opportunity to recognize their team members for any achievement, big or small.

• “Recognition can be about anything,” says Silver. “It can be ‘Fred over there was able to cut five minutes of cycle time off this particular part because he changed the process’ or ‘Mary saved us money by switching out some tooling.’ We then post the feedback in the break room and email it out to the entire organization.”

• “There are so many things that can go wrong in manufacturing just trying to get a part out the door, and this is an opportunity to think about all the amazing things we’re doing,” she explained.

Silver also posts worker productivity charts every week. If workers meet their productivity goals and their indirect time goals, they get performance points, which are redeemable for gift cards.

• “I think people want to know if they’re on a winning team,” Silver said. “If you’re winning, it feels good. We’re all on the bus going in the same direction.”

Motivator Award: Each year, employees can also nominate a peer for the “Motivator Award,” which goes to the employee who best exemplifies Ketchie’s core values: to do the right thing, be agile and embrace continuous improvement.

• To honor the winner, Silver puts together a tribute video of team members sharing their thoughts about the employee and hosts a company brunch in celebration (to which the employee’s family is invited).

• “The winner also receives their own special parking spot, an extra day of vacation and a $1,000 gift certificate to the Marriott to take vacation with their family,” says Silver.

• “The team member that won the award last year had tears in his eyes, so I know that it’s been really impactful,” she continued.

Community service: Ketchie’s employees are passionate about giving back to the community. Through service projects, Ketchie supports the Boys & Girls Clubs of America as well as Cooperative Christian Ministry, which offers programs that relieve hunger and food insecurity and address homelessness and housing costs.

Opportunity Knocks: Silver isn’t only working to retain and support current employees, but also to train and mold the young people who will be tomorrow’s machinists.

• This year, Silver started an internship program for high school students named Opportunity Knocks. It allows students to shadow experienced machinists in factory environments while earning school credit.

• The interns go through a curriculum created by Edgerton Gear, Inc., called Craftsman with Character, a 16-week course that helps students explore the role of character in a professional trades environment. Silver said the course, which includes leadership and manufacturing-focused exercises, is taught at Ketchie four days a week in two-hour sessions. Three days of the week are job shadowing machinists on the shop floor, and one day is in a classroom setting at the shop discussing character traits and soft skills. The conversations lean on discovering what’s important in life and what might make them happy.

• “They absolutely love these high schoolers,” said Silver about the two mentors at Ketchie, who each have more than 30 years’ experience. “It gives them an opportunity to share their entire work career: what they’re doing, experiences learned along the way. It’s been neat to see.”

Investing in technology: Silver knows her team wants to work for a company that’s growing and investing in technology. She recently purchased a machine-tending collaborative robot, which takes over machinists’ “least favorite” part of the job—changing parts while the machines run.

• “I interviewed somebody recently who said to me in the interview, ‘It’s really good to see that you want to grow and that you’re making these big investments,’” said Silver. “You’re buying new technology that excites them. They want to be part of that mission and growth.”

The last word: Silver shared some advice for companies that might be struggling with workforce retention.

• “Use employee surveys, focus groups or roundtable discussions to see what you need to do or should do. Everyone wants to be heard. It’s important to listen.”

The NAM’s workforce development and education affiliate, the Manufacturing Institute, has many initiatives to help employers retain and develop their teams. For a deeper dive, check out this study by the MI on improving retention and employee engagement. The MI will also explore retention challenges and solutions at its Workforce Summit in Atlanta on Oct. 16–18. Click here for more information.