Innovation Keeps Aerospace Aloft

Courtesy of http://www.fdiintelligence.com

By Karen E Thuermer

The fast-evolving, highly sought-after FDI sector of aerospace is driving innovation and creating lucrative jobs from the US to Asia and Europe, with no signs of coming down to Earth. Karen E Thuermer reports.

Airplane at Sunset“Thrilling” is the word KPMG uses to described the aviation market in its Global Aerospace & Defense Outlook report for 2016. “Change is everywhere – in new technologies and automation, in new markets and sectors, in new business models and connected platforms,” says Doug Gates, KPMG global head of aerospace and defence.

Consulting firm PwC ranks the top aerospace manufacturing locations in descending order as the US, Canada, the UK, Singapore, Switzerland, Denmark, Hong Kong, China, the Netherlands, Ireland and Finland.

Sweet home Arizona?

PwC ranks Arizona as the number one US state. The city of Tucson has experienced an increase in activity through the arrival of Raytheon Missile Systems, which relocated from Huntsville, Alabama. In addition to this, ballooning company World View Enterprises has contracts with two US federal agencies to launch satellite equipment and measure wind speeds from Tuscon’s Spaceport. In October, Vector Space, a micro-satellite space launch company comprised of new-space industry veterans from SpaceX, Virgin Galactic, McDonnell Douglas and Sea Launch, announced plans to locate its manufacturing facility at the 2000-square-metre Pima County Aerospace, Defense and Technology Business & Research Park in Arizona.

“While Vector’s eyes are focused on the stars, our home is in Arizona because we believe in its potential as a competitive tech hub,” says Vector Space founder Jim Cantrell.

Elsewhere in the US, growing numbers of global aerospace companies, such as Zodiac Aerospace, Airbus Helicopters, Finmeccanica, Rolls Royce and SpaceX, are calling Mississippi home. The reasons behind this are its low operating costs, a minimal tax burden, easy access to the rest of the US and international markets, and proximity to important military installations.

The Federal Aviation Administration (FAA) has selected Mississippi State University (MSU) as the location for its Unmanned Aerial Systems (UAS) Center of Excellence. MSU will lead 13 other universities in helping the FAA to research methods to integrate UAS into the national airspace.

Oklahoma has seen investments from a growing number of international aerospace companies over the past eight years, including ASCO Industries (Belgium), Rolls Royce Engines (UK), Lufthansa Technic (Germany), Ferra Engineering (Australia) and Mitsubishi (Japan). The state has also hosted more than 15 aerospace-focused trade delegations. In September 2016, it signed a memorandum of understanding with South Korea’s South Gyeongsang province based around collaboration and trade.

Contributing to Oklahoma’s success is its innovative workforce development programmes and Aerospace Engineering Tax Credit, which is the only tax credit of its kind in the US.

Florida’s thrust

Florida is seeing a big boost in aerospace activity, the result of the US government ending the space shuttle programme. “Privatisation took hold and this led to rapid expansion and competition within the industry for the best talent,” says Destin Wells, business development manager at Enterprise Florida.

Among Florida’s strengths is its education push with regard to the science, technology, engineering and mathematics (STEM). Colleges such as Embry-Riddle Aeronautical University, the University of Central Florida and others provide a constant stream of STEM talent to the industry. “This talent is quickly snapped up by these businesses,” says Mr Wells.

Florida has seen a number of aerospace FDI projects of late. In 2016, French multinational Thales announced a $6.5m expansion in Orlando. In February, UK-based GKN Aerospace announced plans to locate a new $50m manufacturing facility in Bay County.

Also in 2016, OneWeb Satellites, a joint venture between OneWeb and Airbus Defense and Space, announced plans to build a $85m high-volume satellite manufacturing factory in Exploration Park outside NASA’s Kennedy Space Center. Set to open this year, it will begin to deliver satellites in late 2017 and early 2018. The project received $20m in Florida state incentives. OneWeb founder Greg Wyler says the company chose Florida for its spaceport and the state’s “deep bench of aerospace and engineering talent”.

OneWeb Satellites has launch contracts with Virgin Galactic and Arianespace. Some are expected to be fulfilled at the Kennedy Space Center, beginning in 2018.

Launch activity is also revitalising Florida’s Space Coast. Blue Origin, founded by Amazon CEO Jeff Bezos, has broken ground on a new rocket manufacturing facility and engine test centre in Exploration Park. Operations are expected to begin in December 2017.

Europe connections

Thanks to Virgin Galactic, Florida could realise economic opportunities with the UK’s aerospace sector. A spaceflight bill is before the UK parliament regarding industry regulations.

UK figures suggest the country’s space industry is worth more than £13.7bn ($17.6bn), but that the country lacks the infrastructure for satellite launches. Virgin Galactic supports the spaceflight bill, and has successfully worked with US regulators.

Should the UK spaceflight bill be passed, Mr Wells believes many Florida businesses will be open to investment in the UK. “We would first likely see a number of smaller contractors accepting work with UK-based businesses, before any major moves take place. But these things can often spiral quickly,” he says.

Elsewhere in the US, significant M&A activity continues within the sector. In February, Sonaca Group, headquartered in Gosselies, Belgium, entered into a merger agreement with Gulfstream supplier LMI Aerospace of Savannah, Georgia. LMI will continue its operations in Savannah. Sonaca Group CEO Bernard Delvaux says the addition of LMI supports Sonaca’s vision of expanding its capabilities in the US.

Canadian moves

Canada’s aerospace sector is comprised of about 700 companies. These include Promethean Labs, which recently located in Edmonton International Airport (EIA) as part of the Alberta Aerospace and Technology Centre (AATC). Promethean Labs will help Alberta’s ‘smart economy’ by supporting the forestry, mining and agriculture industries, as well as measuring greenhouse gas emissions with precision satellite data. Promethean Labs will launch its first satellite in late 2018.

The AATC is a joint venture by Canadian Helicopters, Canadian North, Edmonton Economic Development Corporation, the government of Alberta and EIA. As part of the AATC, Canadian North operates a 737 training simulator in the airport’s Cargo Village, HNZ Topflight operates a helicopter training simulator in the main terminal building, and the Alberta Motor Transport Association will begin construction of a new educational facility in the north part of EIA.

Thailand on the up

Singapore may be the leading aerospace hub in the Asia-Pacific region, but Thailand is establishing itself for full-service avionics. The country has realised $78bn in investments across five separate projects.

Bridgestone is investing $150m in constructing two new manufacturing plants in Thailand: one to produce new aircraft tyres, and one to produce retread aircraft tyres. Production is scheduled to begin in December 2019. Airbus is looking at U-Tapao airport as a future regional hub.

The Thai government recently approved its 15-year Aviation Industry Development Plan as part of its Thailand 4.0 economic development efforts to further develop the country’s aerospace sector and strengthen its position as a south-east Asian aviation hub. The plan offers investors incentives that are valid until 2032.

http://www.fdiintelligence.com/Sectors/Aerospace/Innovation-keeps-aerospace-aloft

Top 20 Facts About Manufacturing

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  1. In the most recent data, manufacturers contributed $2.18 trillion to the U.S. economy in 2016. This figure has risen since the second quarter of 2009, when manufacturers contributed $1.70 trillion. Over that same time frame, value-added output from durable goods manufacturing grew from $0.87 trillion to $1.20 trillion, with nondurable goods output up from $0.85 trillion to $1.00 trillion. In 2016, manufacturing accounted for 11.7 percent of GDP in the economy. (Source: Bureau of Economic Analysis)
  2. For every $1.00 spent in manufacturing, another $1.81 is added to the economy. That is the highest multiplier effect of any economic sector. In addition, for every one worker in manufacturing, there are another four employees hired elsewhere. (Source: NAM calculations using IMPLAN)

    With that said, there is new research suggesting that manufacturing’s impacts on the economy are even larger than that if we take into consideration the entire manufacturing value chain plus manufacturing for other industries’ supply chains. That approach estimates that manufacturing could account for one-third of GDP and employment. Along those lines, it also estimated the total multiplier effect for manufacturing to be $3.60 for every $1.00 of value-added output, with one manufacturing employee generating another 3.4 workers elsewhere. (Source: Manufacturers Alliance for Productivity and Innovation)

  3. The vast majority of manufacturing firms in the United States are quite small. In 2014, there were 251,901 firms in the manufacturing sector, with all but 3,749 firms considered to be small (i.e., having fewer than 500 employees). In fact, three-quarters of these firms have fewer than 20 employees. (Source: U.S. Census Bureau, Statistics of U.S. Businesses)
  4. Almost two-thirds of manufacturers are organized as pass-through entities. Looking just at manufacturing corporations and partnerships in the most recent data, 65.6 percent are either S corporations or partnerships. The remainder are C corporations. Note that this does not include sole proprietorships. If they were included, the percentage of pass-through entities rises to 83.4 percent. (Source: Internal Revenue Service, Statistics of Income)
  5. There are 12.3 million manufacturing workers in the United States, accounting for 9 percent of the workforce. Since the end of the Great Recession, manufacturers have hired more than 800,000 workers. There are 7.7 million and 4.6 million workers in durable and nondurable goods manufacturing, respectively. (Source: Bureau of Labor Statistics)
  6. In 2015, the average manufacturing worker in the United States earned $81,289 annually, including pay and benefits. The average worker in all nonfarm industries earned $63,830. Looking specifically at wages, the average manufacturing worker earned nearly $26.00 per hour, according to the latest figures, not including benefits. (Source: Bureau of Economic Analysis and Bureau of Labor Statistics)
  7. Manufacturers have one of the highest percentages of workers who are eligible for health benefits provided by their employer. Indeed, 92 percent of manufacturing employees were eligible for health insurance benefits in 2015, according to the Kaiser Family Foundation. This is significantly higher than the 79 percent average for all firms. Of those who are eligible, 84 percent actually participate in their employer’s plans, i.e., the take-up rate. Three are only two other sectors – government (91 percent) and trade, communications and utilities (85 percent) that have higher take-up rates. (Source: Kaiser Family Foundation)

  8. Manufacturers have experienced tremendous growth over the past couple decades, making them more “lean” and helping them become more competitive globally. Output per hour for all workers in the manufacturing sector has increased by more than 2.5 times since 1987. In contrast, productivity is roughly 1.7 times greater for all nonfarm businesses. Note that durable goods manufacturers have seen even greater growth, almost tripling its labor productivity over that time frame.

    To help illustrate the impact to the bottom line of this growth, unit labor costs in the manufacturing sector have fallen 8.4 percent since the end of the Great Recession, with even larger declines for durable goods firms. (Source: Bureau of Labor Statistics)

  9. Over the next decade, nearly 3½ million manufacturing jobs will likely be needed, and 2 million are expected to go unfilled due to the skills gap. Moreover, according to a recent report, 80 percent of manufacturers report a moderate or serious shortage of qualified applicants for skilled and highly-skilled production positions. (Source: Deloitte and the Manufacturing Institute)
  10. Exports support higher-paying jobs for an increasingly educated and diverse workforce. Jobs supported by exports pay, on average, 18 percent more than other jobs. Employees in the “most trade-intensive industries” earn an average compensation of nearly $94,000, or more than 56 percent more than those in manufacturing companies that were less engaged in trade. (Source: MAPI Foundation, using data from the Bureau of Economic Analysis)

  11. Over the past 25 years, U.S.-manufactured goods exports have quadrupled. In 1990, for example, U.S. manufacturers exported $329.5 billion in goods. By 2000, that number had more than doubled to $708.0 billion. In 2014, it reached an all-time high, for the fifth consecutive year, of $1.403 trillion, despite slowing global growth. With that said, a number of economic headwinds have dampened export demand since then, with U.S.-manufactured goods exports down 6.1 percent in 2015 to $1.317 trillion. (Source: U.S. Commerce Department)
  12. Manufactured goods exports have grown substantially to our largest trading partners since 1990, including to Canada, Mexico and even China. Moreover, free trade agreements are an important tool for opening new markets. The United States enjoyed a $12.7 billion manufacturing trade surplus with its trade agreement partners in 2015, compared with a $639.6 billion deficit with other countries. (Source: U.S. Commerce Department)
  13. Nearly half of all manufactured goods exports went to nations that the U.S. has free trade agreements (FTAs) with. In 2015, manufacturers in the U.S. exported $634.6 billion in goods to FTA countries, or 48.2 percent of the total. (Source: U.S. Commerce Department)
  14. World trade in manufactured goods has more than doubled between 2000 and 2014—from $4.8 trillion to $12.2 trillion. World trade in manufactured goods greatly exceeds that of the U.S. market for those same goods. U.S. consumption of manufactured goods (domestic shipments and imports) equaled $4.1 trillion in 2014, equaling about 34 percent of global trade in manufactured goods. (Source: World Trade Organization)
  15. Taken alone, manufacturing in the United States would be the ninth-largest economy in the world. With $2.1 trillion in value added from manufacturing in 2014, only eight other nations (including the U.S.) would rank higher in terms of their gross domestic product. (Source: Bureau of Economic Analysis, International Monetary Fund)
  16. Foreign direct investment in manufacturing exceeded $1.2 trillion for the first time ever in 2015. Across the past decade, foreign direct investment has more than doubled, up from $499.9 billion in 2005 to $1,222.9 billion in 2015. Moreover, that figure is likely to continue growing, especially when we consider the number of announced ventures that have yet to come online. (Source: Bureau of Economic Analysis)
  17. U.S. affiliates of foreign multi-national enterprises employ more than 2 million manufacturing workers in the United States, or almost one-sixth of total employment in the sector. In 2012, the most recent year with data, manufacturing sectors with the largest employment from foreign multi-nationals included motor vehicles and parts (322,600), chemicals (319,700), machinery (222,200), food (216,200), primary and fabricated metal products (176,800), computer and electronic products (154,300) and plastics and rubber products (151,200). Given the increases in FDI seen since 2012 (see #15), these figures are likely to be higher now. (Source: Bureau of Economic Analysis)

  18. Manufacturers in the United States perform more than three-quarters of all private-sector research and development (R&D) in the nation, driving more innovation than any other sector. R&D in the manufacturing sector has risen from $126.2 billion in 2000 to $229.9 billion in 2014. In the most recent data, pharmaceuticals accounted for nearly one-third of all manufacturing R&D, spending $74.9 billion in 2014. Aerospace, chemicals, computers, electronics and motor vehicles and parts were also significant contributors to R&D spending in that year. (Source: Bureau of Economic Analysis)
  19. Manufacturers consume more than 30 percent of the nation’s energy consumption. Industrial users consumed 31.5 quadrillion Btu of energy in 2014, or 32 percent of the total. (Source: U.S. Energy Information Administration, Annual Energy Outlook 2015)
  20. The cost of federal regulations fall disproportionately on manufacturers, particularly those that are smaller. Manufacturers pay $19,564 per employee on average to comply with federal regulations, or nearly double the $9,991 per employee costs borne by all firms as a whole. In addition, small manufacturers with less than 50 employees spend 2.5 times the amount of large manufacturers. Environmental regulations account for 90 percent of the difference in compliance costs between manufacturers and the average firm. (Source: Crain and Crain (2014))

– See more at: http://www.nam.org/Newsroom/Top-20-Facts-About-Manufacturing/#sthash.gW0GxfAP.dpuf

Manufacturing Through the Eyes of Human Resources, Recruitment and New Hire Training

By Brian Kingston, MC Assembly – Courtesy of SMT Magazine

Perhaps more important than the technology and tools a manufacturing company has are its people. People are what make a company truly great and the process of recruiting talented, skilled, dedicated employees and training them properly for success is an important aspect of any manufacturing company.

At MC Assembly, we are very involved in the local community and make an emphasis on volunteering and helping with CareerOneStop, American Job Center or what we locally call CareerSource Brevard. This active involvement allows us to network with other professionals and meet a local candidate pool that one will not be able to find on job boards or through a recruiting agency. We also participate in internship programs in hopes the intern will succeed and we will be able to hire them full time.

Some other ways we find candidates include employee referral programs, partnering with the local community, participating in job fairs, and working with and volunteering at the local high school and vocational school. Community outreach initiatives are also very important when finding new candidates.

In today’s market, it’s not only about what the candidate can contribute to the company, but what can the company contribute to the candidate: “Do you allow room for advancement?” “How is your on-the-job training program?” “Do you have tuition reimbursement?” “Do you contribute or volunteer with a cause the candidate is passionate about?” All these methods are very important in finding people.

Right now, one of the biggest challenges facing manufacturing companies is recruiting millennial talent. There is an outdated mentality that with manufacturing, you do not have autonomy, that it’s challenging work and there’s no opportunity for individualism or advancement. At MC Assembly, we counter that by giving employees an opportunity to voice their thoughts and take ownership over their work, by voicing how they think things should or shouldn’t be done. It really gives us an upper hand honing in on our manufacturing process and making it the best we can. It’s critical for our future that we be able to bring in younger talent. We’ve also introduced a lot of incentives like tuition reimbursement and on the job training that can help us attract and retain that talent.

The use of social media sounds cliché, but in manufacturing it is critical to reach millennial talent. Recent statistics show that over 85% of millennials have smartphones and touch them more than 45 times per day. Five out of six millennials connect with companies via social media networks. If your company is not active and does not invest in social media today, you are simply not visible to this generation and missing out on this talent pipeline.

Another challenge facing many manufacturing companies today is finding candidates with the right skill sets to fill specific jobs. There is a real gap of skilled manufacturing talent, largely because many schools have not been teaching manufacturing skills for nearly two decades.

About 20 years ago, many high school just stopped teaching manufacturing-related skills. There was no more wood shop, no more automotive, no more welding or electronics classes. Students were convinced that they needed to go to college for advanced degrees and manufacturing was no longer looked at as a long-term career. This all happened around the time of the dotcom boom. The new trend started to shift towards internet and computer-related jobs and teaching.

Today, we find ourselves with a serious skill gap; in some places, finding skilled soldering and SMT operators can present a real challenge. Overall, manufacturing finds some of the largest gaps in welding, CNC machining and electronics.

According to the Deloitte and The Manufacturing Institute, over the next 10 years we will need to fill 3.5 million manufacturing jobs – the current skills gap will result in 2 million of those jobs going unfilled.

Recently, we have seen a huge push to start teaching manufacturing at the high school level again with a dedicated focus on STEM. Seeing this need, MC Assembly has participated in a local effort called Advancing in Manufacturing (AIM), created chemical plant operator
by CareerSource Brevard. Funded by a two-year DOL National Emergency Grant, the program is making efforts to expand training and early education opportunities in the Brevard area to address immediate employment skills needs and build a pipeline of talent for the future.

I serve as a volunteer member of the AIM committee. Over the last two years we’ve demonstrated effective results in expanding training, educational and internship opportunities. We believe that our approach is a logical and effective solution to help address the skills gap in our area and serves as a model for a successful sector strategy. Through the AIM internship initiative, MC Assembly will host two high school seniors this summer. This is a great way for students to learn about the great benefits a manufacturing career offers, and it’s also a way for us to give back and become a bigger part of our community.

At the same time, we have developed a robust new hire training program. On the first day, we start new hires with a safety and quality training. This allows employees to learn safety tips, who to call, where to go and how to work in a safe way. It also stresses the most important aspect to our business, that quality as our number one priority. This happens well before an employee walks on to the production floor and works on our customers’ products. On-the-job training follows the safety and quality training. New hires are identified on the production floor with a different colored smock and are assigned a mentor.

Once the supervisor and mentor believe the OTJ is complete and the employee is ready to be on their own our quality manager will assess their skill and what they learned and confirm the employees is ready to perform the job on their own. This process is very involved and usually takes 1-2 weeks, this helps new hire get up to speed quickly and have the confidence they are able to complete their assigned tasks.

The skills we look for in candidates are the “soft skills,” which are essential. Every resume you look at will tell you whether a candidate qualifies for the job based on their work skills, work experience and education. The one variable that cannot be determined from reading a resume are the soft skills. Communication, problem solving, adaptability, teamwork, self-motivation and emotional intelligence are just as important, if not more, than the technical skills to do the job. The six soft skills are hard to identify in an interview setting, behavior based interview questions are asked during our interview process to help identify these skills in each candidate. I believe you should always hire character and train skill.

This article was originally published in the May 2017 issue of SMT Magazine.

Building a Thriving Manufacturing Workforce

Ed Potoczak, Director of Industry Relations, IQMS Manufacturing

Courtesy of areadevelopment.com

When asked about recruiting, hiring, and retaining skilled workers, most manufacturers across North America report that they are experiencing challenges. It is not surprising in light of recent observations by William A. Strauss, a senior economist in the Economic Research department at the Federal Reserve Bank of Chicago.

In his keynote at the IQMS 2017 Pinnacle User Conference, “Economic Conditions and Factors That Impact Manufacturing,” Strauss explained that labor force growth is limited to an extent by the availability of potential workers. He noted that population growth in the United States is at 0.8 percent, and the population is aging. Baby-boomers represent a bigger portion of the potential workforce, he said, compared to younger members of the population considered to be in their years of prime employment. Compounding the recruitment challenge is that many parents of high school and college students envision factories as loud, chaotic places where the focus is on manual labor and the need for education is limited — a view far more accurate in 1977 than in 2017. The results are two-fold: Students with a strong academic focus are steered toward other career paths. Meanwhile, students placed in vocational tracks often lack the core science and math skills required for modern manufacturing jobs.

Finally, the youngest entrants in the labor force, the millennials, bring a different set of priorities and expectations along with a fundamentally different relationship with technology.

Fortunately, innovative manufacturers have developed strategies for overcoming these hurdles to build skilled and effective workforces. Let’s look at best practices in recruiting, training and knowledge transfer, employee engagement, and technology adoption they have developed to build modern manufacturing teams.

Revamping Recruiting Strategies Today, attracting skilled talent extends far beyond manufacturers posting job notices to build a pipeline of people interested in their openings. Instead, it is important to generate a plan for consistent year-round public relations activities to present the company’s values, purpose in the market, support of individual employee interests, availability of ongoing training and education, modern technology, opportunities for advancement, and involvement in charitable and civic organizations.

Manufacturers also need to reach out to providers of secondary and higher education along with community development groups. This may include sponsoring robotics design teams, offering plant tours, or participating in career fairs. Additionally, events can provide a positive peek behind the curtain, whether they are organized as part of national Manufacturing Day efforts or as independent initiatives.

kids on a manufacturing tour

Another avenue is to creatively expose students in high school, technical schools, and community colleges through interactive tools such as EduFactor, a Netflix-like, cloud-based, video service developed by Edge Factor. Content features innovative designer-makers, the need for products in all aspects of life, and exciting careers in product design and production. Throughout these recruitment efforts, it important to reach out to women as well. According to 2016 data from the nonprofit Institute for Women’s Policy Research (IWPR), women hold fewer than 10 percent of jobs in the growing areas of advanced manufacturing, transportation, distribution, and logistics. Many companies that focus on engaging with young women in high school and college report greater success in filling important entry-level specialty and management roles.

Training for Today’s Job Demands Alongside recruiting, it is important to invest in training to help grow the pool of available skilled workers. In many cases, manufacturers can take advantage of opportunities to partner with industry, government, and educational institutions. For instance, Raise the Floor is a training program in the Cincinnati metropolitan area started by 26 women from the education, manufacturing, and nonprofit worlds. It is helping fill middle-skill manufacturing jobs as a way for women to better their financial situation. Carissa Shutzman, a co-founder of Raise the Floor and a vice president at Gateway Community College in Northern Kentucky, said the group’s founders came together because of “a perfect storm” with a high number locally of unfilled, skilled jobs in manufacturing and a high percentage of under- and unemployed women.

Another example is, 50 Strong, a subsidiary of mid-size manufacturer Precision Thermoplastic Components. It has launched the 50 Strong Foundation, which awards scholarships to those engaged in or interested in pursuing careers in manufacturing. With these scholarships, recipients can defray the cost of attending a technical, vocational or trade school to grow their manufacturing knowledge and skills.

Meanwhile, Dymotek, which was recently awarded 2016 Processor of the Year by Plastic News, demonstrates the success of combining outside education with in-house training and employee development. The company, which focuses on the demanding niche of liquid silicone rubber (LSR) molding, looks for people with the right culture and attitude — whether working at the local diner or auto shop. Then once they are hired, often as direct labor, the company educates them on LSR molding and manufacturing skills. Notably, some 24 percent of Dymotek’s full-time employees started as direct labor and then were promoted.

Engaging Employees Once employees are onboard, successful manufacturers recognize and address the different expectations of younger millennials and “Gen Edgers.” Older Gen Xers and baby-boomers remember starting careers with trivial, administrative tasks. By contrast younger employees are used to having adults, such as parents, teachers, and relatives, ask for their input on a daily basis. So they want to contribute immediately in a meaningful way. When asked about recruiting, hiring, and retaining skilled workers, most manufacturers across North America report that they are experiencing challenges.

Communication is one key to engaging younger workers. Instead of simply assigning work, it is important for direct supervisors to consistently explain how those work assignments help colleagues, impact customers, and benefit society.

Also critical is a commitment to mentoring “high-potential” employees. As new employees gain familiarity with how things get done, they should be thoughtfully challenged with meaningful responsibilities backed by guidance to provide coachable moments. Additionally, regular meetings for informal listening, feedback, and advice with seasoned employees and managers will be appreciated, and they will help minimize the risk of frustration leading to a quick exit from the company.

While focusing on the wave of new talent, manufactures should also identify growth opportunities for Gen Xers who have years with the firm. These valuable employees, who often need to support growing family commitments, want to advance and unleash their passion to help grow the company.

Importantly, integrating new employees into multi-generational teams can strengthen all workers. Exposing recent hires to the knowledge and style of experienced team members can provide them with helpful role models. At the same time, existing team members should be encouraged to leverage younger employees’ tech savvy, enthusiasm, and creativity to provide “fresh eyes” insights for the team and project.

Using Technology to Drive Retention Technology now touches most people’s daily lives — from millennials who don’t remember a time before smartphones to baby-boomers who use their mobile devices for shopping, social media, and more. These employees expect to take advantage of technology to make their jobs more efficient and effective. Manufacturers also need to reach out to providers of secondary and higher education along with community development groups.

In particular, virtually every employee has a personal smartphone, so manufacturers can benefit by allowing — even encouraging — use of these devices for online research, collaboration, and social communications. Mobile devices also enable e-mail and text communications with colleagues and supervisors outside of business hours. Additionally, businesses can incent employees to use their smartphones for positive posts on social media to build the company brand. At the same time, preparing a reasonable policy for smartphone communications will protect intellectual property and confidential information.

Investing in software to support operations in the back office and on the shop floor is increasingly critical. Well-integrated modern enterprise systems can provide ready access to valuable daily operating insights via many types of devices. Real-time data capture and analytics enable “instant” access to key information needed by the team to do their jobs whenever and wherever needed. Moreover, these systems help minimize the redundant work that frustrates all employees, empowering all team members to become more productive.

Enabling Effective Knowledge Transfer Many manufacturers face the need to accomplish a transfer of knowledge between retiring baby-boomer managers, technicians, and operators and newer employees. Contemporary enterprise software provides powerful tools to support this effort. Notably document management systems integrated with other enterprise software can be used to deliver written work instructions, photo images, and even video clips for training employees on a work task or refreshing their skills. Manufacturers can make video recordings of experienced employees explaining how they do specific work tasks. These can be captured in one- to two-hour sessions and then edited later into short, digestible segments for daily use that can be accessed via the web or mobile devices.

Additionally, manufacturers can leverage a significant amount of written and video training content provided by software vendors, equipment builders, and trade associations to their customers or association members. For example, the Precision Metalforming Association Education Foundation (PMAEF) is dedicated to the promotion and development of a skilled workforce for the metalforming industry. The PMAEF creates technical training materials for its manufacturing members to use in full-fledged apprenticeship programs or for refreshing skills.

In Sum To successfully build a sustainable, thriving workforce it is important to walk a mile in the shoes of those you seek to attract, hire, integrate, retain, and develop. By creatively applying modern recruiting and training techniques, creating meaningful work experiences, and leveraging technology to improve knowledge transfer and productivity, manufacturers will be well positioned to build an effective workforce.

Attract and retain top manufacturing talent in 3 key steps

Courtesy of Jacksonville Business Journal

The manufacturing industry is in flux. Workforce data shows that the types of people working in manufacturing are changing, as are the skills they need.

The ADP Research Institute Q4 Workforce Vitality Report shows that despite the decline in manufacturing jobs (0.3 percent on an annual basis in the past quarter), the role of the factory worker will not disappear. It will, instead, change.

Similarly, automation is here, and it’s not slowing down. McKinsey’s 2017 A Future That Works report estimates that 49 percent of tasks people are paid to do in the global economy have the potential to become automated. The fundamental shifts taking place in manufacturing are affecting not just the way people work, but also the skills today’s workers need to have.

First, increased automation demands a more highly-skilled labor force. In fact, 30 percent of the workers moving into the manufacturing industry are coming from professional services. This segment is gaining fast on the 38 percent who have traditionally entered manufacturing from trade and transportation.

Those who can maintain and operate modern IT systems are especially in demand for manufacturing. And they’re paid more, too. Employees entering manufacturing from the fields of professional services, trade and transportation, and information technology see an average increase of 6.7 percent in wages, according to Workforce Vitality Report.

Second, and conversely, we are seeing “traditional” manufacturing workers exit the industry and experience a 2 percent decrease in wages in their new jobs. But this varies industry by industry. The 22 percent of workers who are leaving manufacturing to enter trade and transportation experience a 4.2 percent decrease in wages. On the bright side, the 24 percent of workers exiting manufacturing for professional services see a one percent wage increase.

A combination of efforts is needed

Employers in manufacturing face a difficult task in this shifting environment, too. Recruiting completely new talent is not an option, nor is retraining an entire workforce, but both are a major concern for employers. Twenty-eight percent of respondents in the ADP Strategic Drift report cite recruiting highly-skilled employees as their top concern, while 25 percent say it is retaining experienced employees. The answer is likely a combination of efforts to compete for newer talent while also focusing on retraining their existing workforce.

The tightening labor market is also at play here. With an anticipated worker shortage of 2 million by 2025, employers need to take a close look at their business model to understand their talent needs and develop a strategic approach to recruitment and workforce planning.

PLC photo

Here are three recommendations for employers who want to attract and retain top manufacturing talent:

  1. Tap into the STEM pipeline

A Deloitte report found that 80 percent of manufacturing companies said they’d be willing to pay new hires more than the market average, but better compensation isn’t a silver bullet. Manufacturing has a PR problem. The report found that manufacturing ranked last as a career choice among millennials, and that only one in three parents said they would encourage their child to pursue a career in the industry.

Employers should adopt recruiting practices that can shake the industry’s antiquated image. To compete for highly-skilled talent, companies need to create a pipeline of workers engaged in STEM fields.

Professional services and trade and transportation are currently the strongest sources for these workers when you look at the Workforce Vitality Report. Business should focus on recruitment from these industries and others while also looking to create a steady pipeline of young talent interested in the industry. Recruiting at colleges and establishing apprenticeship programs can help companies appeal to candidates who had not previously considered a manufacturing career.

  1. Retrain workers to partner with automation

Hand-in-hand with the talent shortage is the skills gap. The Deloitte report found that 70 percent of manufacturing employees are deficient in computer skills and 67 percent in technical skills. This reality is pushing lower-skilled workers out of manufacturing.

But this doesn’t have to be the case. With proper training, these workers can stay in the industry and thrive. The time is now for employers to invest in training, not just on the technical side, but also for educating employees to better understand how the industry is changing.

  1. Put your money, and benefits, where your mouth is

Recruiting new talent and retraining existing talent is just part of the equation. Companies then have to work to keep employees happy — the ones they attract from other industries as well as their current workers who can benefit from retraining. Especially now that millennials are the largest generation in the workforce, manufacturing companies should consider the workplace realities they come to expect — flexible hours, competitive pay, and opportunity for advancement — if they want to attract and retain this vital talent.

The future of manufacturing is not a zero-sum game. Although the industry is undergoing a transition, employers can leverage the opportunity to bring together and engage different types of workers with varying skill sets to achieve their business goals.

 

Add 1 robot on the manufacturing line, watch 5 jobs go poof

Courtesy of Jacksonville Business Journal

American manufacturing jobs have been in decline for decades, with automation long identified as the key driver of those job losses. Now, a new working paper from economists Daron Acemoglu of the Massachusetts Institute of Technology and Pascual Restrepo of Boston University suggests the negative economic effect of this automation might be ever greater, as they found little evidence that other industries have grown enough to offset the jobs lost to robots in manufacturing.

The issue is particularly acute given that technological advances will likely keep coming, and businesses likely will continue to keep deciding that they’d rather invest in automated labor rather than human labor, MIT’s Technology Review reported recently. Furthermore, Treasury Secretary Steve Mnuchin told Axios last week he’s “optimistic” that robots won’t displace people in the near future.

Acemoglu and Restrepo’s paper puts some hard numbers to the question of how many people robots displaced from their jobs from 1990 to 2007. Specifically, the paper said, “one more robot reduces aggregate employment by about 5.6 workers… and one more robot per thousand workers reduces wages in the aggregate by about 0.5 percent.”

two robotic arms

Economists have hypothesized that when robots displace manufacturing workers, jobs in other fields pop up to offset those losses. The new paper says that hasn’t happened to a large degree in part because, on the local level, those displaced workers generally aren’t qualified for or aren’t willing to do those new jobs or other jobs that might be hiring, so they remain unemployed and the new jobs that do get filled elsewhere don’t make up the difference, according to The New York Times.

As for what might be ahead, The Washington Post analyzed how voting data seems to correlate with where people lost jobs to automation. Rust Belt regions where manufacturing automation has been most concentrated tended to vote for Donald Trump over Hillary Clinton last year. That suggests Trump’s message about reinvigorating American manufacturing played especially well in the same communities where automation put many people out of work, the Post said. But at the same time, it also suggests Trump’s efforts to have companies keep their manufacturing plants open in the United States isn’t as direct an appeal as it could be, as it’s one thing to call for companies to keep their operations in the U.S. and another to call for plants to hire people rather than invest in robots.

Project Velocity seeks $2.2M to expand manufacturing

Courtesy of http://www.jaxdailyrecord.com

By Karen Brune Mathis, Managing Editor

A Jacksonville building-products manufacturer proposes to add 20 jobs, retain 150 and invest $54 million into its North Jacksonville plant.

Known as “Project Velocity,” it seeks a $2.211 million Recapture Enhanced Value grant from the city to make the deal work. It says it is looking at two other U.S. cities where it has existing facilities.

Resolution 2019-289 was introduced to City Council to support the grant. The agreement would rebate 60 percent of the incremental increase in its property taxes for seven years after the capital investment is made and is on the tax roll.

The unidentified company proposes a $4 million improvement to its property and a $50 million purchase of manufacturing equipment.

The legislation requests a two-reading passage.

The legislative fact sheet explains that the company would add 20 jobs by 2022 and would pay an average $40,000 a year plus benefits.

That wage is greater than 60 percent of the countywide average.

It says the advanced-manufacturing company is a target industry. It proposes to create jobs for machine operators and assembly line workers for a new manufacturing line.

“The company has stated that the City of Jacksonville incentive being proposed is a material factor in its decision to expand its operation in Jacksonville, Florida versus the two other U.S. cities where they operate existing facilities,” the fact sheet says.

The fact sheet says the company is in a Level 1 Distress Area, which allows a REV grant up to 60 percent.

A job creation schedule in the economic development agreement shows that 10 jobs would be created by year-end 2018 and the other 10 in 2022.

kmathis@jaxdailyrecord.com

GrowFL Now Accepting Applications 2017 Florida Companies to Watch Awards

Second-Stage Businesses Compete to Earn Prestigious Honor

Applications are open for the seventh annual Florida Companies to Watch® awards program. The event will honors 50 select second-stage companies from throughout the state for developing valuable products and services, creating quality jobs, enriching communities, and creating new industries throughout Florida.

Eligible applicants must be privately held, second-stage commercial enterprises. Qualifying companies must also be headquartered in the state of Florida, employ between 6 and 150 employees, and earn between $750,000 and $100 million in annual revenue. A selection panel of judges representing areas of finance, technology, entrepreneurship and small business select honorees that have demonstrated past and future growth opportunities, entrepreneurial leadership, product innovation, community responsibility and competitive business practices. Applications are open through May 6, 2017.  CLICK HERE to start the application process.

Economic Impact of 2016 Winning Companies

$421 million in total annual revenue in 2015 29 percent increase in total annual revenue compared to 2014 2,171 full-time equivalent employees 30 percent increase in 2015 total employment compared to 2014 719 net new jobs projected for 2016

Increasing Impact

From 2012 through 2015, these companies generated more than $1.1 billion in revenue and added nearly 1,200 employees, reflecting a 119 percent increase in revenue and 122 percent increase in jobs for the four-year period. That translates into a 30 percent annual growth in both revenue and employees.

These companies project continued growth in 2016, with a 30 percent revenue increase and 33 percent growth in employees compared to 2015. If their projections hold, these companies will have generated $1.7 billion in revenue and added more than 1,900 employees over the last five years — a 186 percent increase in revenue and 196 percent increase in jobs since 2012.

Accusoft
Aerospace Technologies Group
American Elite Molding, LLC
Analytics Partners
Automotive Broadcasting Network
Bracken Engineering, Inc.
Brunet-García
CO2Meter, Inc.
Commercial Acoustics
DirecLogix
DynaFire, Inc.
Fattmerchant
Findsome & Winmore
Gator Cleaning Solutions
GloFX
Hell’s Bay Marine, Inc. dba Hell’s Bay Boatworks
HotelPlanner.com
InstaNatural
Interactyx
Interventions Unlimited, Inc.
IT Authorities
iVenture Solutions, Inc.
Jeremiah’s Italian Ice
Jerry Harvey Audio
JK2 Construction & Scenic
JMX Brands
Karins Engineering Group, Inc.
Key Lime Interactive, LLC
Leanswift
Lumenier
NetDirector
Optym
OZNaturals, LLC
Pegasus Transportation
PrimeGroup Insurance
Private Label Skin
Progressive Dental
RISA
Science First
TerraCom Direct
That’s Us Technologies
The Spice Lab
VALiNTRY
Wicked Dolphin Distillery
Widerman Malek, PL
Wood’s Fisheries, Inc.
Woof Gang Bakery
X-Link Medical Software Interfacing
Xeleum Lighting, LLC
ZIO

Interested in being a part of the elite list? CLICK HERE for more details on the 2017 Florida Companies to Watch.

http://www.growfl.com/flctw/applications-now-open/

 

 

​Massive Navy expansion may be easier said than done for U.S. shipbuilders

Courtesy of Jacksonville Business Journal

The shipyards of General Dynamics Corp. (NYSE: GD) and Huntington Ingalls Industries Inc. (NYSE: HII) are going to be busy if President Donald Trump follows through on his repeated pledges to massively increase the size of the Navy— but that won’t come without its challenges.

Increasing the fleet from 274 ships to 350, as Trump plans to do, might provide a revenue boost to the likes of General Dynamics. But it also entails some “operational risk,” according to a Thursday report from credit analyst firm Moody’s Investors Service Inc. The reason? “A build-up (let alone of such magnitude) has not occurred for many decades.”

I spoke with Bruce Herskovics, a senior analyst at Moody’s, about the big challenges the nation’s two shipbuilders will face in meeting Trump’s quota, and he said it largely comes down to the labor force.

Naval shipbuilding has slowed down so much in recent years that it even prompted Huntington Ingalls to close its shipyard in Avondale, Louisiana, in October 2014. That lends fewer resources to a larger job.

“It’s a big industrial manpower effort when you’re going to build a large number of ships coming off of a low base level,” Herskovics said. “You need to have a whole supply chain of labor that extends from high schools all the way to trained tradespeople willing to step up the volume.”

Navy ships are massive undertakings involving a lot of skilled labor. In the time it takes to build a single project, big chunks of the workforce can move on, and shipbuilders didn’t need to replace them given they were working on increasingly fewer ships. Now shipbuilders must ask themselves, “How do we get the supply chain of our labor force back to a level it needs to be at so we can meet this uptick in work?” Herskovics said.

Couple that with Trump’s plans to aggressively cut costs on the actual ships — and higher labor costs at a lower product price could be a tough calculus for shipbuilders.

Navel Ship

“We’ve gotta get a good deal,” Trump told workers at Huntington Ingalls’ Newport News shipyards during a visit Thursday. “If we don’t make a good deal we’re not doing our job. The same boat for less money. The same ship for less money. The same airplanes for less money. … It means we’re going to get more of them and we can use them.”

Herskovics agreed any increase in shipbuilding is likely going to involve multiyear, fixed-price contracts that lock in contractors.

“An administration that’s new that’s seeking to ramp up the build rate is likely looking to buy the ships at a price that is reasonable, so the Navy is going to be smart about what it pays for,” he said. “For the contractor, they have to be careful when they’re ramping up the workforce that they can make sure that they meet the cost that they baked into the bids that they put forward.”

Shipbuilders are already preparing for potentially lower margins. Huntington Ingalls, for example, plans to invest $1.5 billion in the next five years to help contain costs.

“We are focused on reducing costs in all of our shipbuilding programs,” Huntington Ingalls spokeswoman Beci Brenton wrote to me in an email. “We see the most progress in reducing costs in those programs that are mature and where we are have stable requirements, can leverage the economic advantages of block buys, and are in serial production.”

The good news? Navy officials have indicated that the major shipyards have the capacity to up their production.

“These yards have the ability, even in their existing facility and footprint, to dial up the production rate,” General Dynamics CFO Jason Aiken told investors last month at Barclays Industrial Select Conference in Miami.

James Bach covers federal contracting.

The State of American Business: Help Aviation Fly High

Plane in Flight

Courtesy of The US Chamber of Commerce

In his State of American Business speech U.S. Chamber President and CEO Tom Donohue noted that aviation was an important part of “making America’s infrastructure the best in the world.”

Ahead of the 16th U.S. Chamber Aviation Summit on Thursday, let’s take a brief look at the state of American aviation and what policies are needed to support it.

Like a carbon fiber wing, the state of American aviation is strong.

Airlines as a business are healthy. In 2016, the number of domestic passengers increased by a little more than 3%. There’s plenty of confidence in the industry. A Gallup poll found the airline industry has its highest positive rating in 15 years. What’s more, the top four domestic airlines generating reliable profits has attracted America’s most-famous investor, Warren Buffett.

Air cargo is also healthy. Domestic air freight increased by 3.75% in 2016—its biggest gain since 2010.

There’s also strength in aircraft manufacturing. Through complex, job-supporting global supply chains, Boeing delivered 748 planes in 2016, and Airbus opened their first U.S. factory in Mobile, Ala. in 2016.

American aviation is also stretching beyond our atmosphere with private sector companies innovating and pushing the boundaries of space travel. The United Launch Alliance regularly launches satellites for NASA and the U.S. military, and Elon Musk’s SpaceX supplies the International Space Station white striving for a bigger goal: Mars.

There’s much that policymakers can do to support the continued health of this vibrant, innovative industry.

Airports are a key component to our infrastructure, so investing in improvements and modernizing the roads connecting them with cities and communities will ease the movement of both passengers and cargo. Any infrastructure-improvement legislation should include improving air travel.

In addition, later this year, Congress will need to pass legislation reauthorizing the FAA. This legislation needs to continue work toward a modernized Air Traffic Control System, and it should continue to grow Airport Improvement Program investment to meet infrastructure needs.

Doing these things will make air transportation more reliable, safe, and secure, and it will ensure that aviation continues lift our economy into the future.