As plants go up, employment barriers fall down

AUTOMOTIVE NEWS ILLUSTRATION

When auto suppliers come looking for a new plant site in South Carolina — something that has been happening a lot lately — Jermaine Whirl is typically sitting at the table to answer their questions.

Whirl is vice president for learning and work force development at Greenville Technical College in Greenville, S.C., and a key part of the investment discussion as businesses look to expand and staff up. Whirl's role: Help deliver employees.

"The big question they always ask is, 'Will I be able to find enough employees?' " Whirl said. " 'And can you get me 100 welders to get us up and running?' It's a very real problem."

It's the million-dollar question as companies across the U.S. struggle to recruit workers.

This summer finds the U.S. at nearly its lowest level of unemployment in a half-century — 4 percent as of June. Automaker and parts company executives will gather this week in Traverse City, Mich., for the Center for Automotive Research's annual Management Briefing Seminars, where they will be focused nervously on the disruptive trends that are threatening their traditional business models, such as autonomous driving and ride-hailing networks. But a much more immediate challenge is finding all the workers they need to keep up, to grow and to replace a generation of imminent retirees.

Twelve suppliers in Alabama have teamed up to fill jobs. After a hiring fair, above, 775 people received contingent job offers.

"You're starting to see some pressure," said Laurie Harbour, CEO of Harbour Results, a Detroit consultancy that works with suppliers around the U.S. and Canada. "We recently saw an automaker advertising temp jobs at $19 an hour. How can suppliers in that market compete with that?

"The pressure is growing for companies to fight against each other by increasing wages. But their margins are just too thin to afford that."

One supplier executive who works with Harbour told her he has experienced a 30 percent annual turnover rate as workers depart for more eager employers.

"Can you imagine retraining a third of your work force every year?" she said.

It never happened

In South Carolina, the demand for workers is so great that the state legislature last month passed an "expungement law," with the encouragement of local businesses and chambers of commerce. The law will allow individuals who have been convicted of nonviolent crimes — possession of marijuana, for example — to have a first-time conviction expunged from their records.

What does that have to do with filling jobs?

When the law goes into effect this year, thousands of South Carolina residents, according to the state's governor, will be able to apply for jobs and legally answer "no" to the application-killing question "Have you ever been convicted of a crime?"

Thomas: Use all available tools.

That will help with South Carolina's problem — but it won't solve it. The state has more than 60,000 unfilled jobs, and the auto industry keeps coming. Just last month, Volvo opened its first U.S. assembly plant, in Ridgeville, S.C. It has about 900 workers so far but wants 1,500 by year end, and 4,000 eventually.

"I don't think anything is easy at this stage," said Jack Helmboldt, president of Denso Manufacturing Tennessee Inc., in Maryville, Tenn. The Japanese supplier just began a $1 billion expansion in its small east Tennessee town to introduce production of more advanced components for electric and connected vehicles. The project will require 1,000 new workers in the midst of this ultratight labor market.

"Back when all of this was decided," Helmboldt said of the expansion, "there was a lot higher unemployment rate. Luckily, we're now one of the preferred places to work. But that doesn't make it easy."

In recent months, the executive has visited two Maryville high schools to talk about career opportunities in automotive. He believes building Denso's talent pipeline will mean getting the message to potential employees as early as possible.

Uniting for the cause

Other companies are being even more aggressive.

An automotive hiring fair in Alabama in May resulted in more than 1,400 job interviews.

Twelve suppliers in Alabama, including Lear Corp. and Flex-N-Gate Corp., are trying to fill jobs by working together. Acting through a state-run work force development group called West Alabama Works, the companies held an automotive hiring fair in May. That resulted in more than 1,400 job interviews, and when it was over, 775 people had received contingent job offers.

But that wasn't the end of it. Donny Jones, West Alabama Works executive director, wanted more.

"The question we asked is, what happens to the other 600-plus who did not get a job offer?" Jones said.

Those fair attendees were signed up for an online job database, and each of them then received an email or text inviting them to sign up for a state job-skills program called Ready to Work. About 200 of them immediately did so.

Ready to Work is a state-funded, five-week program, held at community colleges and technical schools, that covers a range of training, from soft people skills to industry-specific technical skills. Completing it allows potential workers to sidestep that other application-killing question, "What prior manufacturing experience have you had?"

Alabama auto companies believe Ready to Work is a good recruiting tool. But Garth Thorpe, work force development manager at Birmingham, Ala., staffing firm Onin Group, thought the program was missing a valuable chunk of the population: high schoolers.

"We were seeing all these high school students who wanted to enter the work force but couldn't find a job anywhere," Thorpe said. "Yet all the companies in manufacturing and automotive can't find quality workers for entry-level positions that they needed to fill."

Last year, Onin worked with auto companies, among others, to draw up a special semesterlong curriculum at schools during the academic year. Over 100 high schoolers have graduated from the program since it began and now work in various industries, including automotive, Thorpe says.

The program has expanded to more than 20 schools across Alabama and will graduate more than 600 students next spring. Nine auto suppliers, along with Mercedes- Benz U.S. International, are involved.

Going to church

That's progress. But Onin has some bigger numbers to wrestle with right now. The company has about 13,000 employees on its payroll — one-third of them in automotive manufacturing at locations in 17 states. Auto companies rely on Onin to keep their factories staffed with temporary workers, a growing tool for employers as they try to respond to shifting demand from customers.

Hugh Thomas, Onin Group managing partner, says that many in his work pool come from rural areas. As a result, his recruitment teams are going to small-town churches or community events. The group also taps into "local opinion leaders" who can guide Onin to potential workers.

From online job boards to social media, Thomas says, Onin uses every tool available to reach potential employees.

"Everywhere is a challenge now," Thomas said, "because there are more open jobs in this country than people for those jobs. You can't wait on them to come to you anymore."

DiClaudio: Build a "root system."

Mike DiClaudio, a principal analyst for KPMG's advisory services, believes this will be a growing trend among companies — not merely recruiting workers as needed, but building a long-term work force development pipeline with local communities.

That means raising a company's profile in its community and developing what DiClaudio calls a "root system." Suppliers must embed themselves into communities and schools, he recommends, to keep the pipelines open for future talent.

"I believe organizations have to be more proactive in building relationships with their educational systems and communities," DiClaudio said. "The companies that are doing that have such higher success rates with their work force."

Combing the countryside

Back in South Carolina, spurred by Volvo's plans in Ridgeville, the state has launched a pilot program to find workers in rural areas.

Elisabeth Kovacs, deputy director of work force development for the South Carolina Department of Commerce, said the department's first move was to combine state and national manufacturing training programs into a single 62-hour program. But it also had to make sure people knew about the opportunity.

The result was a two-hour community information roadshow. Managers from Volvo and Mercedes-Benz Vans, which also recently built an assembly plant near Charleston, visit nearby rural communities to introduce themselves and talk about hiring needs and the state's training program.

Since the effort began in July 2017, the department has held six community sessions with total attendance of nearly 2,300 residents, half of whom had no manufacturing experience. As of this summer, 364 people have graduated from the program.

Volvo and Mercedes-Benz, as well as some suppliers in the state, now accept the training as the equivalent of one year of manufacturing work experience. Kovacs said the program is expanding to include suppliers for the community visits.

"We know potential workers are out there that have not had manufacturing experience," Kovacs said. "We need to be creative and go to them."

You can reach Stephanie Hernandez McGavin at smcgavin@crain.com

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