Pequot Tool and Manufacturing, whose 135 workers fabricate metal and plastic parts for aviation, agriculture, medical and other industries, is poised for growth in Pequot Lakes, about 25 miles north of here.
But the company is turning away customers, chief executive officer Karlo Goerges says. Goerges can't find workers with the right skills, he said.
And here in Brainerd, John Newhouse struggles with the same problem. He's president of Lakeland Mold Company, a manufacturer of custom molds, including things like plastic fuel tanks for agriculture equipment. Demand is up, but Newhouse, too, has had to turn down business because workers skilled in machining, fabricating and welding are scarce.
Goerges and Newhouse are hoping theirs will be among the companies ultimately benefiting from a $13 million federal grant to a group of community and technical colleges in central Minnesota. The U.S. Department of Labor provided the money to focus on advanced manufacturing education in an effort to close what many see as a gap between what employers need and the training that potential workers can obtain.
"Right now we're turning away work that we can't do, because we don't have the people to do it. And if we don't have people, we can't expand."
The grant was among $500 million awarded to nearly 300 technical colleges and universities across the country, all with the goal of developing and expanding innovative training programs in manufacturing.
Employers across the country have complained for years about the so-called skills gap. A national survey released last month by the Society for Human Resource Management showed that nearly half of employers said candidates didn't have the right skills for the job.
In Minnesota, there are a variety of reasons employers can have a hard time finding employees, from pay to location to housing availability, but the skills gap is most prominent in the manufacturing sector. Companies say high-tech and even entry level jobs are tough to fill. What used to be, say, simply a welding job, now demands computer skills, robotics, adaptability, flexibility and more.
"If I had a skilled person walk in today, we'd probably hire them on the spot," Goerges said. "Right now we're turning away work that we can't do, because we don't have the people to do it. And if we don't have people, we can't expand."
Thirteen percent of all jobs in Minnesota are in manufacturing. Those jobs pay an average of about $56,000 a year, according to the Department of Employment and Economic Development. And state economists say that every job in manufacturing creates nearly two jobs in other supporting industries.
Despite efforts to promote the industry, the manufacturing skills gap is projected to get worse. The Society of Manufacturing Engineers predicts that by 2015, the shortfall of skilled factory workers in the United States could increase to 3 million jobs. Potential contributing factors include a rebound in manufacturing and a surge in baby boomer retirements.
Goerges needs a very different worker than those who went to work for his father when he founded the company in 1981. Now he wants people with skills in robotics and automation and the ability to be more versatile. Goerges expects the changes to accelerate.
"We've got to be smarter, and smarter means that every employee in a company now has to have an intellectual property that adds to the outcome."
Newhouse said even applicants for entry level jobs often don't have the basic mechanical and hands-on aptitude he's looking for. He said those skills used to be taught in high schools. But many schools aren't teaching industrial technology any more.
And for the industry to stay competitive, Newhouse said, workers need to be trained differently.
"A factory job is no longer a factory job," Newhouse said. "A factory job is now a value-added asset to a company. We've got to be smarter, and smarter means that every employee in a company now has to have an intellectual property that adds to the outcome. We look much deeper than just some manual skills," he said.
Both Newhouse and Goerges say they offer good wages that are competitive with other manufacturers in the region. But data suggest wages for some manufacturing jobs in Minnesota appear to be stagnant.
For example, the average hourly wage for a welder grew only a dollar between 2005 and 2011, up from $16 to $17 an hour, according to data from the Department of Employment and Economic Development. It's a rate that doesn't even keep up with inflation.
"We really need to be looking at a very different kind of education."
The data show similar stagnant wages for other manufacturing related jobs. Economists point to the recent recession as a contributing factor. And a skills-gap study released in March by the Minnesota Department of Employment and Economic Development suggested that employers themselves hold some of the keys to solving the problem.
But educators have been looking for new ways to respond to the skills gap issue as well, and the Labor Department grant provided an opportunity.
The four-year grant aims to provide training for nearly 4,000 current and new workers. The effort would include new tech degree programs, plus it would deliver specific training employers need at the worksite.
Marlene Mixa, director of strategic grants initiatives at Central Lakes College in Brainerd, is leading the effort. Mixa says Minnesota manufacturers are asking for skilled workers with strong reading, math and computer skills, and who also are able to communicate well and work in teams.
"You need someone who can be flexible, who has that understanding of the whole process, who has critical thinking skills, problem solving skills," Mixa said. "So we really need to be looking at a very different kind of education. And what we're doing is trying to incorporate some of those soft skills and basic skills right into the technical programs and career degrees that we're offering."
The grant effort, which includes Central Lakes College's Brainerd and Staples campuses as well as technical colleges in St. Cloud and Pine City, will fund new degree programs in automation, plastics, and reverse engineering and rapid prototyping. The grant money will also pay for new, modern industrial lab equipment.
The effort also targets underskilled people who are already in the workforce. Grant money will pay for state-of-the-art interactive television systems. Mixa said by this fall, widescreen interactive TVs will be placed on the college campuses and in the training rooms of 10 regional manufacturing plants.
"If you have two employees at one place, five at another, 10 at another... it can be economically feasible to offer that training to all of them, via this interactive TV mediated telepresence," Mixa said.
The addition of new degree programs at technical colleges presents new challenges for state higher education. How do you generate enough interest in manufacturing to get people to seek careers in the industry?
There's an unfair stigma attached to manufacturing, suggesting monotonous tasks set in dark, dirty rooms, said Karen White, director of the 360 Degree Manufacturing and Applied Engineering Center of Excellence, a Bemidji State University-based program designed to promote the manufacturing industry. The 360 Degree program is also a partner in the federal grant effort.
In some technical colleges that perception has meant manufacturing degree programs aren't running at full capacity, even though there's high demand for the jobs, she said.
"We just in a lot of cases have unfilled seats, because there isn't the interest for people to come into those programs," she said. "That can especially happen in rural areas. How many teachers are encouraging a student to go into a welding program versus a, you know, some other occupation, a health career or something else."
White says filling programs in outstate Minnesota is tougher, because there are fewer people and fewer potential students.
White's 360 Degree program aims to change that by promoting manufacturing as a great career option.
"It pays extremely well," she said. "It pays higher than the state average for occupations. And it's a wealth builder. It really contributes to the wealth of the community because it adds jobs in other sectors."