Could High Energy Costs Solve Manufacturing’s Talent Challenge?

Oct. 29, 2012
The American public is sympathetic with U.S. industry when it comes to concerns about the future of manufacturing in America.

The American public is sympathetic with U.S. industry when it comes to concerns about the future of manufacturing in America. According to the fourth annual “Public Viewpoint on Manufacturing” survey conducted by Deloitte and The Manufacturing Institute, only 16 percent of the 1,000 people asked feel the manufacturing sector is likely to get stronger in the next 12 months, and 23 percent feel it will weaken.

Craig Giffi, vice chairman of Deloitte LLP, said he wasn’t surprised by these results. Neither is he surprised that only 43 percent of respondents believe manufacturing is as secure and stable as careers in other industries. In fact, 80 percent believe manufacturing jobs are the first to be outsourced to other countries. Maybe that’s why only 35 percent said they would encourage their children to pursue careers in manufacturing.

In a separate survey of manufacturers, conducted as part of the PwC US Q3 2012 Manufacturing Barometer, the majority of U.S. industrial manufacturers questioned forecast mild revenue growth at their companies over the next 12 months, yet overall sentiment remains cautious toward the direction of the U.S. and global economies. Bobby Bono, U.S. industrial manufacturing leader for PwC, noted that margins remained flat during the third quarter and inventories rose, while concerns rose regarding a lack of demand as a barrier to growth. In fact lack of demand was identified as the top barrier to growth during the next 12 months, followed by legislative/regulatory pressure and oil/energy prices.

With the release of those sobering surveys, it was encouraging to get some positive news from the Society of Manufacturing Engineers (SME). It was granted $292,000 from the U.S. Department of Energy to partner SME Student Chapters with existing Industrial Assessment Centers (IAC) at universities nationwide.

What do IACs assess? Manufacturers’ energy conservation techniques. I love the irony. With manufacturers citing regulation and energy prices as two of their biggest growth impediments, and with parents worried that manufacturing careers are losing their luster, here’s a regulator helping manufacturers turn these impediments into a career opportunity.

Starting this year, SME will partner with six universities, incrementally expanding the program over the next three and a half years. In total, SME will partner with all 24 IACs participating in the DOE program, providing future manufacturing professionals with hands-on industry experience.

“SME’s student members are the future manufacturing workforce, and engaging them with the IACs across the country will provide them with critical skills and training while producing real cost savings for small to mid-sized manufacturers.” said Joe LaRussa, SME’s director of membership. “This program typifies how SME, industry and government can collaborate to strengthen manufacturing as a critical component of the U.S. economy.”

Through those university-based IACs, students will learn how to conduct energy assessments in a broad range of facilities. According to SME, since 1981 IACs have performed nearly 15,000 assessments, containing more than 117,000 recommendations, resulting in energy savings of 530 trillion Btu (British thermal units) or more than $5.6 billion.

Maybe the next opportunity could be for American manufacturers to make their own thermal units instead of outsourcing them from the U.K.