Several Wisconsin manufacturing CEOs and the editor of a national business magazine blasted the decades-long trend for global companies to move factory jobs overseas while focusing on technology and R&D jobs at their stateside headquarters.
“The reality is, manufacturing IS high-tech,” said Patricia Panchak, keynote speaker and participant in a panel discussion on the future of manufacturing, hosted Friday by Wisconsin Manufacturers & Commerce.
Panchak, editor in chief of Cleveland-based IndustryWeek magazine, said American industry will define its future by re-embracing the days of homeland factory sites, local workers and recognizing that so-called “high tech industries” have always been around — under the less glamorous labels of manufacturing and agriculture.
“We’ve been talking for the past two decades about going to some other industry — we thought it’s something else … when in fact, manufacturing is that industry that’s moving into high tech.
“The windmill, the steam engine, internal combustion — those were the high-tech of their day,” Panchak said. “A lot of research went into them. Those were research-intensive jobs in their day.”
As for another trend in recent decades, that of moving factory jobs overseas, Steven Dyer, president and CEO of Lake Geneva-based Trostel, Ltd, was blunt: he doesn’t necessarily trust other nations.
Dyer said it can make sense for companies to build plants in another country if the products are low-tech and can be sold there. But he warned: “If you have the high technology you need to be a success, be careful about taking that abroad — it’s not a level playing field. The word, ‘industrial espionage’ is not a Tom Clancy novel term. It’s real and it exists.”
Cheaper labor is not always an advantage, said Dyer. “There better be a good reason to be there,” he said.
Instead, Dyer advocates that U.S. companies lose the “American cowboy attitude that we can’t share best practices” with each other.
“The bottom line is, I’m not competing against other manufacturers in the Midwest,” said Dyer, whose company makes polymer and molded rubber products. “I’m competing against China and against India and against South America.”
He said U.S. manufacturers need to collaborate on policy and consistent practices in order to compete.
Panchak said she knows of many manufacturers that focused more on customer service and product quality instead of cheaper overseas labor and ended up surviving the recession better than others.
The other panelists were Scott A. Mayer, president and CEO, QPS Employment Group; and Dirk Smith, president and CEO, Super Steel LLC of Milwaukee. It was moderated by Jim Morgan, WMC Foundation president.
Mayer and Smith both stressed a need for skilled workers, saying they have job openings that are going unfilled.
“There’s a real shortage,” said Mayer. “What’s interesting is over the next 20 years, the number of jobs that are going to be available in Wisconsin vs. the number of people who are going to be able to handle and fill those positions — there’s a huge gap. We need to really attract and draw people to our state.”
Smith said his company could use 35 welders immediately and has recently interviewed 175 applicants, of whom 73 will be called back for a second test.
A problem is that many applicants cannot pass the test, even if they’ve taken shop classes in high school, he said, so he supports improved training classes for students, along with selling kids on the value of manufacturing careers at an even younger age.
Smith says his company is working hard to retain skilled workers by offering good pay — “Our top welders, with overtime, get $70,000 to $75,000 a year” — and benefits that include on-site health care.
While panelists joked about Wisconsin’s image of beer and brats and diehard Packers fans, Panchak said there’s nothing wrong with a traditional manufacturing environment.
Although the latest catchphrase is “advanced manufacturing,” Panchak said, “You know what? We’ve been struggling to even know what that is.”
It’s not true that “advanced manufacturing” must be 100 percent science- and research-based, she said. Even ordinary manufacturing tends to evolve to include “innovation” and use of “cutting-edge” materials, she said.
— By Kay Nolan