ROI Annual Report to the Region: State of Our Key Sectors

Continued from – ROI Annual Report to the Region: State of the Indiana Uplands

After CEO Tina Peterson’s presentation on the state of the Uplands region, attendees heard from partner organizations representing Uplands’ key industry sectors of life sciences, national security and defense, and advanced manufacturing.

  • Pete Yonkman, president of Cook Group and Cook Medical, presented on life sciences.
  • Dr. Brett Seidle, division technical director of NSWC Crane, presented on the defense sector.
  • Gareth Jolly, plant manager at GM’s Bedford casting operations, presented on advanced manufacturing.

Each speaker gave an insider’s perspective on the status of their sector, the local and global issues at play, and the critical questions for the future. A lively panel discussion followed their individual presentations.

Pete Yonkman, President of Cook Group and Cook Medical, presented on the status of life sciences in Indiana.

Life sciences is a growing, active sector in Indiana, much more so than many Indiana residents realize; Indiana’s $10 billion in exports is second only to California. Over 1,700 companies offer 56,000 jobs, with average wages over $94,00.

But there are headwinds to continued growth in Indiana. Among those, multi-district litigation is now supported by venture capitalists who have found it very profitable. Amazon is entering into the market, with aims to take over hospital purchasing. European tax laws create mountains of costly paperwork. On the other side of the world, China’s rapid growth offers incredible incentives: Shanghai has added 55 hospitals, and with the ability to build the world’s biggest convention center, a highway, and a city around it in only three years.

Meanwhile, 29,000 people in the Indiana Uplands lack a high school diploma and the basic skills to fully participate in the workforce. For those who are employed, housing remains deeply problematic. Of 1,000 employees Cook surveyed, 75% were looking for housing, but 65% think they won’t find it.

In responding to these challenges, the key questions, Mr. Yonkman suggested, are “What do we want to achieve, and how do we align our policies and politics to achieve that?”

Dr. Brett Seidle, Division Technical Director of NSWC Crane, presented on the status of the defense sector.

Covering 100 square miles, Crane is the third-largest naval base in the world by land mass. A “federal laboratory,” it employs scientists, engineers, technicians, and more.

Crane has undergone an incredible transformation in the last 12 years. In the past, NSWC Crane offered a broad portfolio, and its competitive advantage was low cost labor. That was clearly unsustainable. So Crane leaders asked, “Where can we provide the most value and be national leaders?”

The answer, they decided, lay in specializing in electronic warfare, expeditionary warfare, and strategic missions. Since making changes to narrow their focus and hone technological expertise, Crane has surged to national leadership. They’ve experienced 300% growth in work for strategic missions (mainly nuclear subs). Their electronic warfare division has the largest footprint in the Department of Defense.

Crane has also made a deep commitment to corporate citizenship. Instead of passively hoping that the region or state’s “goodness would splash onto us,” now Crane is an active community leader—they’re making waves as a good neighbor and good partner. They’ve invested in creating an “innovation ecosystem” of local, regional, and state actors, industrial partners, and academic institutions.

Gareth Jolly, plant manager at GM’s Bedford casting operations, presented on the status of advanced manufacturing.

More changes are coming to the automobile industry in the next five years than in the last fifty combined, Mr. Jolly told the crowd, and then went on to explain why. Of 1.24 million annual traffic injuries, 90% are caused by human error—hence the interest in driverless cars and using technology to reduce accidents. Engineers are struggling to find designs and technologies to further reduce emissions from combustion engines that will be affordable to customers—hence the focus on electric cars to meet CAFE regulations. Meanwhile, drivers sitting in congestion in traffic are burning through $300 billion in fuel costs. Reducing congestion with “connected vehicles” that talk to each other and autonomous vehicles would save significant dollars and fossil fuels (not to mention aggravation). The seemingly impossible goal? Zero crashes, zero emissions, zero congestion.

How do they get there? As one example, over the last 14 years, GM has invested $1 billion in the Bedford plant on lightweight casting, in order to meet fuel efficiency standards. The recently introduced high-pressure die-cast aluminum body structures are not only lighter but also reduce the number of parts going into the vehicle.

The challenge? Finding the workforce to fulfill these exciting initiatives. 40% of salaried employees have been with GM five years or less. In the Bedford plant, many employees have less than five years of work experience anywhere. A study by Deloitte found from 2018 to 2028, 4.6 million manufacturing jobs will be created, 1.9 through natural growth and 2.7 through retirement. 2.4 million jobs won’t be filled with the right skills or people.

Key questions for his sector, Mr. Jolly suggested, are, “What do we need to do to attract more people and talent to manufacturing? How can we make people see that manufacturing has a future?”

Following the individual presentations, ROI CEO Tina Peterson facilitated a panel discussion on challenges and opportunities, in particular, the unmet workforce need for scientists, technologists, engineers, and production workers. She asked each of the speakers to address how their organizations are approaching staffing and recruiting.

Dr. Seidle noted that Crane’s strategic direction to develop deep expertise and the nature of its projects attracts top talent from all over the country who want to participate in that specialized work. “Once they’re there,” he added, “our retention is good.” Crane has purposefully built connections to universities with a curriculum that supports its work.

Cook, on the other hand, has had to shift its approach. Pete Yonkman explained, “For filling entry-level jobs, we focus on the education opportunity. We’ll provide a high school diploma through masters for free. For a recent job fair, 600 people were lined up for 200 jobs before 6 am. Most were underemployed. They’re looking to build a career, not just a job. There is a hidden workforce in Indiana of underemployed people,” and Cook seeks to both tap and further develop that workforce.

At GM’s Bedford plant, Gareth Jolly replied, it’s been difficult to hire for certain skills. “We’ve had 18 months of posting for electricians going unfilled,” he said. “Now we’re thinking of apprenticeship programs, even though that takes years. Die making is also a skill that’s died out.” Recruiting, Mr. Jolly noted, is hampered by outdated perceptions of manufacturing as low-tech work in a dirty environment. But as ROI’s new job-shadowing videos show, today’s factories are scrupulously clean and very high tech. “It takes complex diagnostics to fix and maintain equipment,” he added. “At GM, we have success recruiting engineers, we successfully recruit California and East Coast people,” but other roles are harder to fill. Like Crane, however, once people are hired and see what the facility and the work are like, GM has no trouble retaining them; attraction is the sticking point.

Dr. Seidle picked up on that point, commenting, “There’s an education piece for tool and die makers and electricians. As parents, we want kids to go to college. We don’t think about the outstanding local opportunities like these, that pay well and are portable.”

“There’s also a community piece,” Mr. Yonkman added. “Cook is deeply committed to the people here. We succeed when our communities succeed.”

In closing, Peterson commented that any discussion of workforce must also address the role of automation in eliminating jobs, and that the State of Indiana has the highest risk of automation of any state—a thought-provoking issue that the panel didn’t have time to discuss. But in an interview after the panel, Dr. Seidle commented that for NSWC Crane, automation, artificial intelligence, and the like are not threats, “as long as our strategies incorporate that. There’s funding that’s coming to Crane for all those things that we’re asked to stay in front of so that we’re ahead of our adversaries. Those disruptive technologies are ultimately good for us. They end up increasing our relevance, as long as we’re strategically inclined. I think for us it’s leading to positive impacts on our workforce.”

Next – Annual Report to the Region: What’s Next for ROI Education & Workforce Programs

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