Bloomington Newsroom: How to move U.S. manufacturing forward: Experts offer strategies at IU conference

November 18, 2015


INDIANAPOLIS -- The U.S. manufacturing industry is poised to enter a new era of strength despite hurdles that include a lack of skilled workers and tangled trade and tax policies, according to panelists at a conference convened by Indiana University.

[Reposted from Bloomington Newsroom  |  November 10, 2015]

The conference, “U.S. Manufacturing and Public Policy: Road Map for the Future,” is part of a wide-ranging initiative by IU Bloomington’s School of Public and Environmental Affairs to bolster the public policies that have an impact on the industrial sector.

The proposals offered at the conference will be shaped into an “agenda for manufacturing” that will be presented to the 2016 presidential candidates, said Gil Kaplan, partner in the King & Spalding law firm and a co-organizer of the event.

“If the nation adopted the good ideas we’re hearing here, we would be a lot closer to solving our manufacturing problems,” Kaplan said.

Those ideas were the outgrowth of a series of discussions featuring a who’s who of regional and national industry leaders and speeches by Indiana Secretary of Commerce Victor Smith and Lt. Gov. Sue Ellspermann.

One discussion, “Education and Manufacturing: Is There a Skills Gap and How Do We Fill It?,” brought together speakers Tom Duesterberg, formerly of the Aspen Institute, Steven Dwyer of Conexus Indiana, David Seeger of JMC Steel Group, Ivy Tech Community College President Thomas Snyder and Robert Lerman of the Urban Institute and American University.

They agreed that manufacturers are struggling to find capable employees. Lerman said welders, millwrights, mill operators and skilled electro-mechanical workers are especially in demand, and employers also are seeking new hires with communication, teamwork and problem-solving skills.

“Thousands of manufacturing jobs are unfilled,” Seeger said. “We are struggling to find people to fit the most basic requirements. It's staggering.”

Snyder touted the benefits and flexibility offered by the two-year schools. While Dwyer agreed with Snyder, he added, “Industry really needs to engage more forcefully and be much more specific as to their needs. Enlightened companies are already teaming with high schools, community colleges and universities to develop programs which will create a pipeline of talent.”

Lerman said more intensive training through a widespread apprenticeship program is one answer. “Will young people take up apprenticeships? Yes. Will companies do it? Yes,” Lerman said, citing successful programs in South Carolina and England.

That’s exactly what Germany has succeeded in doing, SPEA professor David Audretsch said in a presentation titled “An Entrepreneurial Model to Create and Revive Manufacturing.” Audretsch focused on the revival of German manufacturing in the early part of this century.

“We need to make it sexy, although I’m not sure how to do it,” Audretsch joked. The first step is simply making manufacturing more visible to American young people.

“We take SPEA students studying in Europe to a factory in Italy,” Audretsch said. “Most of them have never been in a factory before and have no idea it can be something so positive.”

Seeger of JMC Steel said young people don’t understand how manufacturing has changed.

“We have an image problem,” he said. “They think conditions are dirty and dark, that there’s a lack of an articulated career path, and that too many employers are on a boom and bust cycle.” That’s not the case, he said, pointing to several Indiana manufacturers that operate state-of-the-art, gleaming shop floors.

The image problem isn’t just inside factories, said Scott Paul, president of the Alliance for American Manufacturing, a partnership between leading manufacturers and the United Steelworkers union.

“Look at the description we’re using, a skills gap,” Paul said. “That’s terrible messaging. We need another term. Millennials want to build things, they want to make things. So let’s ask them to help us build the next generation of driverless cars, help us send a manned mission to Mars. We shouldn’t tell young people what they don’t have. We should inspire them with what they can do.”

Former World Bank economist John Hansen led off a discussion titled “International Trade and Manufacturing: Can We Build Consensus?” Hansen said the U.S. needs to lower its trade deficit by taking steps to lower the value of the dollar by instituting a “market access charge” on capital inflows that would be paid by foreign investors. Weighing in on the merits and drawbacks of Hansen’s proposal were panelists Kaplan; Ian Steff, Indiana’s senior advisor for nanotechnology and advanced manufacturing; and Stan Woszczynski, a vice president at Cummins. Terry Straub, a former US Steel executive, moderated the panel.

SPEA professor Sanya Carley outlined a series of steps that would result in more sustainable manufacturing processes during a presentation titled “Energy Policy and the Manufacturing Revival.” Carley said companies are discovering environmentally friendly manufacturing can be cost effective and many are making changes in that direction.

Panelist Tom Duesterberg discussed the benefits of lifting the U.S. ban on crude oil exports on manufacturing. MISO CEO John R. Bear emphasized the importance of properly functioning electricity distribution networks. Energy Systems Network CEO Paul Mitchell moderated the panel.

In the segment “Challenges to Manufacturing in the U.S.: Tax and Regulatory Reform,” University of Tennessee professor Donald Bruce described the need for corporate tax reform in the manufacturing area. He said gridlock in Congress over new business tax policy is causing employers to cancel investments and hiring plans and consider moves to lower-tax environments.

SPEA Dean John D. Graham and Art Fraas from the organization Resources for the Future presented a paper on regulatory reform efforts in the manufacturing sector. Mark Brown of King & Spalding, David Lewis of Eli Lilly, Dan Peterson of the Cook Group and Patrick Wilson of Osage Global Strategies commented on the presentations, and Hap Shashy of King & Spalding and former chief counsel for the IRS moderated the panel.

The conference was funded by individual philanthropists dedicated to a revival of the manufacturing sector.

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