News & Events: Help Wanted: Some Local Factories Badly Need Skilled Workers ~ The Herald-Palladium 

Despite high unemployment and a sluggish economy, the Michigan Manufacturers Association, employment agencies and some area manufacturers say they're seeing signs that manufacturing is alive and well.

And for some, the biggest sign says "Help wanted."

"We'll always need stuff," said Candice Elders, until recently the spokeswoman for Michigan Works of Berrien, Cass and Van Buren Counties.

The places that make stuff need stuff. And those places need people.

"We have customers saying they're looking for people to go into manufacturing. Long-term, it's a great place for young people to work," said Jim Kodis, chairman of the tri-county Workforce Development Board and owner of Regal Finishing in Coloma.

His company, which puts reflective finishes on parts for the heavy equipment, off-road vehicle, emergency vehicle and appliance industries, is hiring, and so are many of his customers, he said.

Arnie Redsicker, vice chairman of the Workforce Development Board, said the board over the last year and a half has gone from "Holy cow, how are we going to find these people jobs, to holy cow, how are we going to find people for these manufacturers?

"Right now there's a constraint on what we could be producing because manufacturers can't find enough skilled help," he said. "The average guy on the street believes manufacturing is dead and there's no manufacturing jobs. People don't believe there's a future in manufacturing, and it turns out to be a self-fulfilling prophecy. If you don't have people, you can't manufacture."

The MMA reports that between March 2010 and March 2011 manufacturing jobs in Michigan increased by 6.3 percent, more than double the growth seen in any other sector.

That's not hard for Bill Heinrich, president and CEO of Ausco Products Inc. in Benton Township, to believe. Or Matt Tyler and Scott Gourlay, president and vice president of Vickers Engineering in New Troy. Their companies are among manufacturers that have been growing their work forces and their business.

"Since January 2010 we've hired 35 people. Sales are up 76 percent in the last two years," said Heinrich.

At the time of the interview for this story, Heinrich said Ausco employed 116 people and was looking for a few more.

Tyler said his company, which employed 110 people as recently as spring, just added 30 positions and, when finished hiring, will be at 140.

"Diversity is one of our strengths," Tyler said. "We don't do just machining, we do fabrication as well. We identify and do business with customers who can support significant growth. We supply multiple ventures, companies that have infinite growth potential."

A member of the Southwest Michigan Economic Growth Alliance board, Tyler said manufacturing is the "absolute foundation" for any good economy.

"We feel this area is thriving with good small businesses, and we think we'll continue to see companies here grow. Some manufacturing companies that are dedicated to this area are going through growth spurts," he said.

Growing their own

That includes Vickers Engineering, which Tyler and Gourlay bought in 2000 from Jim and DoraLee Vickers, who founded the company in 1970. Tyler said Weesaw Township has been "a good partner," supporting the company by approving tax abatements for new equipment that will support more jobs. Toyota is Vickers' biggest customer, and the company recently won a contract to make components for the Camry, Tyler said.

Ausco Products, formed in 1990 when a holding company bought the assets of bankrupt Auto Specialties Manufacturing Co., will start production next month on about 6,000 brakes for John Deere's Pro Gator, a heavy utility vehicle used to carry sand and equipment on golf courses.

"They were using a drum brake and the braking was marginal, not adequate," Heinrich said. "They wanted to upgrade with a better brake. We designed a hydraulic caliper, and the mechanical performance was better."

He said Ausco's claim to fame is "We're a problem-solver. We're heavy in engineering."

Heinrich said much of Ausco's growth has been due to introducing new products. After bottoming out in 2009 and having some layoffs, Ausco is up to its highest level of employment since 2000. And in the last two years annual sales went from $16 million to $29 million, Heinrich said. He said the company is on track for a record year again.

"We just celebrated a record July, and I will personally thank every employee," Heinrich said. "I go one on one with employees and celebrate success. I manage by walking around and asking questions. To have the people trust you and talk to you is important."

Survival of the fittest

Elders said companies like Ausco and Vickers are survivors of what she calls a Darwinian recession.

"Many of our small, second-tier manufacturers saw the writing on the wall when the automotive industry began to decline, and in response, diversified their customer and product base. The companies that didn't evolve died, and the ones that did evolve quietly survived and are now flourishing," said Elders, who has left Michigan Works to take a job elsewhere since being interviewed for this story.

Heinrich said being diverse has helped his company. The business makes brakes for a variety of off-road vehicles.

"Much of our growth has been in terms of introducing new products. In 1995 we did nothing with John Deere. Now we have 16 platforms with John Deere."

Heinrich said Ausco also does business with coal mining operations. The company has designed a "wet brake" in which the friction material is isolated from the environment, protecting the brakes from corrosion and moisture damage.

Tyler said that besides car parts, his company is making, among other things, components for oil rigs.

"Toyota is our biggest customer, but we have about 100 customers. We have a customer base in Texas within the oil and gas industry. We're a contract manufacturer to OEMs (original equipment manufacturers.) We support a variety of businesses," Tyler said.

The challenge

For the companies that are alive and well, their challenge now is to find skilled workers.

Elders and Megan McCausland, her replacement at Michigan Works, said there's a false perception that most manufacturing jobs were lost to globalization and outsourcing when, in fact, advances in technology have led to the need for fewer workers. But those workers need more sophisticated skill sets.

"One of the greatest challenges to our manufacturing industry is its reputation," Elders said. "Although we've lost some jobs during the past several years, manufacturing still comprises a significant portion of our regional economy and, depending who you talk to, about 19-25 percent of our labor force. And each of those jobs has a multiplier effect, supporting about three surrounding jobs in other industries like hospitality and health care."

McCausland said the manufacturing industry's reputation as a low-skilled, dirty and dying career path is antiquated and keeps young people from pursuing an education in one of the state's most promising industry sectors. She said Michigan Works will work with other agencies in the state to try to change that impression.

"It's hard to get across a positive message about manufacturing when the majority of headlines over the past years have given the impression that there's no future in it," she said.

In an annual report card on the state of manufacturing in America, Michael Hicks, director of the Center for Business and Economic Research at Indiana's Ball State University, recently gave Michigan an "A" for the manufacturing industry's health and role in the state's economy but a "D" for human capital, which includes the proper training of people to work in today's high-tech shops.

In his report, Hicks said the state continually lacks training, beginning at the K-12 level, in modern-day manufacturing jobs. He said Michigan is not alone; many states got low grades in the "human capital" category.

Wanted: thinkers

Tyler and Heinrich both said their companies will train workers, but someone needs to steer young people on career paths for manufacturing and industrial trades.

"We need the support of our local municipalities and school systems," Tyler said. "The new technical high school in Niles is very exciting, very encouraging for the area. And parents need to encourage kids to go into manufacturing. Some of our jobs here are highly skilled, but to be a machine operator we look more for teamwork, intellect and attitude."

Niles Community Schools Superintendent Richard Weigel said that is what kids will be learning at the Niles New Tech Entrepreneurial High School opening in September.

"The students will work on real-world projects with local business partners," Weigel said. "The school is designed around problem solving and project-based learning."

Patrick Malley is dean of the New Tech school, which will occupy a wing of Niles High School with 125 ninth-graders. It will add another 125 each of the next four years.

"The idea is you learn best when you do your own research," Malley said. "In a typical school the teachers tell you all the answers. Here, the kids have to find the answers themselves."

The project-based model of education will combine topics like biology and art, Malley explained. For example, one class will partner with the city of Niles to create ecological signs for the city's river walk. Each sign will contain a picture of an organism, a written description of the organism and an explanation of how it fits into the ecosystem.

Another project will combine U.S. history and English. The class will partner with the Southwest Michigan Economic Growth Alliance to create a public relations campaign encouraging industries to locate in Southwest Michigan.

"The learners will look at the success (of manufacturing) in the U.S. at the turn of the 20th century, figure out what it was that made it successful and determine how we can apply that today," Malley said. "We hope that working with SMEGA to create this campaign will help bring industry to the area."

Redsicker, of the Workforce Development Board, said science, technology, engineering and math are the core subjects needed in schools for an education leading to a manufacturing career. Students need more hands-on learning than happens at most schools, he said.

"It's a challenge. The system is set up the same way it was in the 1880s, with somebody standing up teaching facts. We need to get beyond that."

Regal Finishing owner Kodis said he sees an uptick in manufacturing activity throughout various businesses. He said his company has been hiring for the past several months.

"The interesting thing is we're seeing a migration of manufacturing from China back to the States. I really think transportation and fuel costs basically have kind of driven that. I think we've reached that tipping point where our customers are saying it's a better value to go with a domestic supplier," Kodis said. "We've seen work coming back from Mexico for the past three or four years as wage rates climb throughout the world."

On the downside, Kodis said, most companies during the economic downturn worked on improving efficiency, which led to a decline in jobs.

"Many have seen an uptick in business, but not necessarily an uptick in hiring. I've been hiring again gradually, but nowhere near where I was at one time," he said. "At peak I had 52 people, and I was down to 26 in mid-2009. Business levels are back to where they were before the economy fell off, but now I'm running at about 30 people. People are more effective than they were, and we've adapted to suggestions from people on the floor about how to make things work better."

Kodis said Regal Finishing has an aggressive profit-sharing plan.

"We're very open with our employees about what the numbers are, so it's to their benefit to make us more profitable," he said.

Opportunities coming

Kodis said that while increases in hiring are slow and gradual, there will be more opportunities in manufacturing over the next few years because of an aging work force.

"Two things are going on in Southwest Michigan. A lot of people currently employed in manufacturing are starting to get to retirement age and a lot will be dropping out of the work force soon, creating a lot of opportunities for people to come into the manufacturing field," Kodis said.

"In addition to that, we're projecting growth in manufacturing jobs in our area. Not huge growth, but good, steady growth. The tough part we face right now is getting young people interested in going into manufacturing careers."

He said one problem is, "In popular culture, manufacturing is not portrayed as a glamorous environment to work in, and getting young people who are interested and have the skill level is a challenge."

But Kodis said some young people are finding out that manufacturing jobs pay more than a lot of other jobs.

"We're talking about starting out in the $25,000-$30,000 range with just basic education and skills. The opportunities to make money are there."

According to Michigan Works, the average annual pay in manufacturing in the Berrien, Cass and Van Buren region in 2010 was $61,933.

Statewide, the MMA reports that manufacturing workers make an average of $76,124 a year, $24,719 more than the average salary for the rest of the work force.

jswidwa@TheH-P.com