Workforce Development

Economic Development, Faster Lane, Workforce Development

MRGLSI 2016: Talent attraction today’s economic key

Louisville must draw immigration, especially international, to fill skilled jobs for native business

MRGLSI-2016-300x402

There is no silver bullet for building a robust, regional economy. If there was a clear path to success, then everyone would be following it. That’s simply not the case. It takes investment from business leaders, elected officials and the community as a whole to create a vibrant environment in which people want to work and live. The key ingredient however is clear: It’s skilled people.

The people who comprise a community are what make it go and grow. It’s time we started investing in them and bringing more talented people into Kentucky and Greater Louisville, as well as improving retention of skilled folks already here. Talent attraction is an issue facing communities across the country.

A shortage in qualified workers is one of the top complaints of GLI members. Since the economy rebounded, there are thousands of open high-wage jobs in Greater Louisville. Finding the right people to fill them is more difficult than ever.

In 1Q16, Greater Louisville had more than 8,800 job listings for positions requiring a bachelor’s degree or higher level of education. Those open high-skill jobs carried a mean salary of $79,000, which means that we are missing out on over $700 million in economic impact. When openings include associates degrees and skilled trades, the number of open positions more than double.

Increasingly, businesses are looking to economic development partners to help them recruit. It’s a complicated issue, but one we are ready to tackle.

Oftentimes, we hear that businesses do not have a great way to sell our region to job candidates and their families. Corporate recruiters will say they are good at selling their company, but not as prepared to sell their community.

It’s not just a job that will make someone move. They need to feel like they know the community to which they are relocating. Will there be a good place to meet people who share similar interests? What are the quality of life amenities? How is the traffic? Which neighborhood is right for me? These are vital to someone deciding to relocate, specifically millennials.

In the past five years, our inbound migration of that generation has been 4 percent, compared to 15 percent in places like Nashville. Clearly we must do better.

Strategies around attracting talent are as important as efforts to attract businesses. GLI is working on a number of strategies to support interested newcomers. Strategies like our Talent Ambassador Initiative; our talent toolkit; and our efforts around entrepreneurship.

We are creating an ambassador program that recruits corporate representatives, family members, college roommates and others to be an extension of Greater Louisville.

To assist them with this task, GLI is building an online talent toolkit offering information on career opportunities, real estate and a view into life in the area. It even has a cost of living calculator. This toolkit offers tangible information that helps us sell ourselves.

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A shortage in qualified workers is one of the top complaints of Greater Louisville members. (Brett Hait)

For the next year, GLI also will be focused on recruiting talented international professionals. Data shows that communities that have international migration are growing their talent base at a much faster pace. Louisville added a net 6,367 people to its population over the past five years thanks entirely to the inbound migration of international people.

We need to step up the game-plan for supporting and recruiting international talent to the area. Many times, these professionals are ready to step into jobs in the engineering and healthcare sectors. We need to support their transition and help them integrate into communities.

In addition to recruiting and growing talent, GLI believes that growing entrepreneurs creates a new pool of talent. GLI is known for its support of local start-up companies and while we grow businesses, we are growing new pools of talent focused on innovation. In the first quarter of this year alone, EnterpriseCorp, the entrepreneurial arm of GLI, helped five early-stage companies secure $2.79 million in funding.

There is a lot to do around this talent attraction and retention challenge, and GLI plans to be the loudest and most aggressive we have ever been on this issue. We will rally companies to join our efforts and we will inspire friends and family to be an extension of our cause. Together, we can bring our sons and daughters home. We can recruit friends who have never thought of living here before. And we can transform our population growth to serve companies and better our community. It’s a communal effort and we accept the calling.

Features, One to One, Workforce Development

One-on-One: World’s Manufacturers Rely on Kentucky Machine Tool Maker

Brian-Papke

Brian J. Papke joined Mazak Corp. in 1987 and was named president in 1989.

Editor’s note: This is a longer version of the interview than what appeared in The Lane Report’s June 2016 issue.

Mark Green: Give us a brief history of Mazak in Kentucky and what the ownership structure is.

Brian Papke: It’s family-owned by the Yamazaki family in Japan, and in 2019 it’ll be a 100-year-old company. We’ve been in Florence, Ky., since 1974. In Japan, it started as a very simple company making tatami mats, bamboo mats that people sleep on. The former chairman, Teruyki “Terry” Yamazaki, is the one who took a completely different approach than most Japanese-owned companies. He internationalized much sooner than other Japanese-owned companies.

He started an office in Long Island with one American secretary and 20 to 25 Japanese guys. Today, we probably have 25 Japanese here full-time and 30 maybe in North America, out of about 1,100 people. We were the first Japanese-owned company to manufacture in the state of Kentucky. And I think there are about 160 now, many of which came through here quite a bit sooner than Toyota. Mazak in Florence started very small, 12,000 s.f., and grew to 800,000 s.f. today, plus what we call technology centers around North America.

MG: Why does this region have a significant history of machine-tool companies?

BP: This was a machine tool manufacturing center in the country. Cincinnati was the machine tool manufacturing capital of the world. That was why we came here. It wasn’t such an international industry many years ago. European companies came to certain areas like Milwaukee; Cleveland; Rockford, Ill.; and Cincinnati was actually the largest center. A lot of them were German. In the Illinois area, they were more Swedish. Milwaukee also was a very German heritage. The people settled here, and then they started machine tool businesses.

Most of these guys were really strong entrepreneurs. They were very creative in making machine tools, but the industry and its scope looked so different than it does today. I had occasion to be in China on one trip at a big dinner in the Great Hall of the People, in Tiananmen Square, with maybe 1,000 people from the machine tool industry from all these different countries. We all felt at home with each other because the industry is so international today. But it’s not large. Countries want to make machine tools because it’s kind of a gateway to other kinds of technology.

MG: It’s a cornerstone of manufacturing.

BP: It is and it’s radically, absolutely radically, changing. There’s a lot of opportunity for the companies that want to change and innovate – it’s a classic “Who Moved My Cheese?” scenario. Machine tools are innovating in terms of software usage, and the eventual relationship to the Internet of Things is considerable. We just spent three days with a cool group of people from Cisco Systems, the leading builder of equipment for the internet. We didn’t even know those people years ago; there wasn’t even an internet. Machine tools were hardware-based.

MG: How mature is the internet’s influence on the machine tool sector?

BP: We’re at the infancy. The Association for Manufacturing Technology brings together a broad group of people – software providers and people who make accessories for machines and coolant manufacturers and truck manufacturers and a wide variety of people who affect manufacturing. We’re no longer just making machines that are hardware based. Some years ago, computer-controlled machines came into the picture, and that’s fantastic. They became more sophisticated. Then the controls evolved and started to look like your smartphone; they’re internet-compatible, but still kind of individual pieces.

AMT wanted to do something for U.S. manufacturing to differentiate not just machine tools but manufacturing per se from things being done in other countries. It got together with a group from the University of California at Berkeley – I was on the AMT board at that time – and we embraced a whole new protocol they came up with called NT Connect, which is a connectivity standard. You use software and create analytics that allow you to get better utilization. It’s pretty complex stuff. And that’s before IoT.

MG: Before internet-of-things development? When was this?

BP: Just nine years ago. Now, that world has evolved. As we start doing that, we get involved with Cisco because they provide the cybersecurity for IT departments. Like Big Data for other things, Big Data manufacturing is coming. With networking of information and cloud-based technology, you can study patterns and make determinations. Companies today get high utilization of their equipment; the machines are more sophisticated and maybe they require fewer machines but more complex machines. They’re very dependent upon them, and they want them to run constantly.

One thing you can do is predict the maintenance that’s required – not just preventive but actually predictive. So a component’s going to fail; when is it going to fail? That’s just one example. You can compare it to what’s happening with the unmanned car. Nobody is going to step out today and buy an driverless car, but we all have more sensor technology on the cars we’re driving, and that’s going to continually evolve toward that goal and result in the driverless car. The same thing is happening for machine tools. And Mazak is a leader in terms of adopting that technology and trying to move this industry toward IoT.

MG: How will that affect personnel needs? It will require more technical skill to oversee these more sophisticated machines, but does it mean fewer workers?

BP: We’ve done so much in terms of technology that supposedly reduces employment, but it’s the opposite. Employment has grown because we found all kinds of things that provide value to customers. Mazak’s employment has grown. And every time you create a manufacturing job, it creates anywhere from three to 10 other jobs. There’s all kind of people who work around this area who are not Mazak employees, but they get their livelihood as a result of what we do. But, yes, you need experience with manufacturing.

As far as our needs, we were very involved with the origins of Gateway Community and Technical College in 2001. I personally went to Frankfort and talked to Gov. Ernie Fletcher at the time because we saw we have different needs. We’ve got software engineers needs that are obviously a growth area. Companies today must be more automated in what they do, so there are needs for automation-type engineers. We can’t just sell machines to customers as much as we did at one time; we have to help them apply it. So we created these technology centers in the building across the street and a whole group of engineers are needed that help customers apply those machines to their operation. How do you program them? How do you set them up? How do you set the applications up? And then all the people in the plant, making the machines.

We finally accepted the fact that we were going to need more skilled workers and that people were going to retire, and so we had to play a role in that. We started recruiting people and actually paying their tuition to Gateway.

MG: Are broad industry trends creating an expectation for further growth?

BP: Everything kind of evolves. Years ago everybody thought all manufacturing was going offshore, and it was a mistake. Educational institutions, the media, even the manufacturers themselves made some mistakes in that assumption that all manufacturing was going offshore. As we talk about the kinds of products that we’re developing, that are more high-tech, there’s a great opportunity to do that here. There are all kinds of smart products that are being developed by companies that want to do it here, but you have to set up the right kind of manufacturing to do it. You can’t do it the way you did 20 years ago. You need new automated machines and so forth. Automation requirements are increasing, and the technology in terms of electronics and internet capability and connections with the machines is evolving, and that trend is absolutely going to continue.

MG: What does the rise of the internet of things, in which nearly everything is connected continuously by the internet, mean for your business?” Already it has accelerated your innovation, growth and change.

BP: Looking to the future of our industry, this digital solution area is going to play a bigger and bigger role. Not just with the machines, but selling different kinds of software that will be compatible with IoT and that you can use for predictive maintenance. There’s what we call ‘health monitoring’ of the machines, where you’ve got a footprint of the machine and then you can compare it so that when somebody makes a part, they know that the machine can do it. These machines are incredibly accurate – we’re talking tens of a thousandth of an inch accuracy in their positioning. And they’re getting more accurate all the time, because the end products are getting more accurate. As companies want to make fewer parts, the parts tend to get more sophisticated.

MG: Is U.S. manufacturing growing today?

BP: The opportunity is there. We’ve seen it go down as a percentage of the GDP and kind of bottom out. It’s fluttering around a little bit now, but actually we’ve seen this glimmer of hope that, as a percentage of the GDP, it’s going up. I see that continuing. This is still a huge manufacturing country.

People have mistaken impressions. They have a huge misunderstanding of what factories look like. Factories are evolving! There are still some old factories that need to change, but as companies build new ones and new companies are coming online all the time, these are really neat places to work. People here are excited. We have very low turnover at Mazak. However, there are work skills concerns because turnover is so low that although we are a relatively young company we now have an aging workforce. We have to replace people that are retiring and then we have our growth. It’s really evolving now.

MG: Does Mazak have difficulty finding enough skilled employees?

BP: It jumps around. On the whole, that is true. And in the future, we’re going to have more needs for high-tech people. The skill levels are going to go up, and then the wages will go up relative to their skill levels. There are great opportunities. And I see the same thing happening in other companies, because they have the same kind of skill requirements that are still evolving. The training levels that are going to come into play are going to be even higher than they are today. The skill needs we’re training people for right now are only going to become higher.

MG: How did Mazak play a role in the 2001 creation of Gateway Community and Technical College, which has created special training programs for you?

BP: I remember Gov. Fletcher walking into the room, and I thought I was there just as one of the members who was providing input, and he said, “Mazak, we’re going to decide what we’re going to do on economic grounds. I’d like to hear from you.” So right from the beginning we’ve been very vocal on the need for more skilled worker requirements, and that has continued.

MG: So Gateway, from its origins, has had training programs that were, to some degree, designed to train employees for Mazak?

BP: Gateway provides the basic training that people need to work here, and then we have to supplement the training – things that make them specific to what our needs are. So while they’re going to school, they also work here.

MG: How many employees does Mazak have?

BP: I’ll say 700 in Kentucky, about 1,100 total around the country.

MG: How many expansions has Mazak had in the past decade, and why has this growth happened?

BP: There have been 16. This started with a building across the street that was originally 12,000 s.f. We now have 800,000 s.f. here in Northern Kentucky. And I don’t see it being the last expansion as we broaden our technology out. There are a number of reasons for that. One is, we invest in our own factories. This factory is a very high-tech factory. We’re a leading innovator, and we put in place ways of keeping ourselves competitive relative to other countries of the world that manufacture machines. We took a company that manufactured and engineered all its products offshore to not just manufacturing here but now designing the products here. Significant numbers of products we sell are designed here, and some of those designs get transposed on a world basis, and we export some machines. So that’s played a role in our expansions.

We came up with this Technology Center concept, where we located facilities to help customers develop their manufacturing processes. We’ve changed from a machine tool manufacturer to a solution provider, and that made another significant difference in our business. We have wonderful people here, frankly. Among our North American operations, we only manufacture in Kentucky – we never felt the need to go anywhere else, we just keep expanding here.

MG: How many products does Mazak make?

BP: We can make 100 models of machines here. We can make 400 models around the world at different plants, but this plant actually probably makes the most number of models of any plant in the world. That’s because of our design capability; we can develop products here that match the market, which gives us opportunity for growth.

MG: What’s the price range?

BP: The price range would be anywhere from $100,000 to $2 million for a machine. But we also sell a lot of systems that integrate machines together; they can be much higher. One of the magic things we do is to sell machines that match smaller companies, and we have machines that match larger companies. We have products that match a wide-ranging number of industries. If you need a hip or knee, we’re the leading builder of machines for the medical service companies – the Zimmers, the Strykers, Johnson & Johnson, all the big ones – and a lot of small shops that make those components.

We’ve been the leading supplier for the oil service industry, which is slower right now, so that’s really had a temporary impact on our business. We make machines for the mining industry. Construction equipment: Caterpillar is one of our largest customers, and all the companies that make parts for them. Right now the aerospace industry is very active for us. We do a lot of semiconductor – vacuum chamber kinds of parts – we do big machines for that industry. Automobiles, of course, and trucks. Anywhere there’s a product that takes tolerance and precision machining, would be a Mazak machine.

MG: Are any of those categories your most significant ones, or the biggest buyers?

BP: We were the leader in creating what we call multitasking machine tools that combine a wide variety of processes into a simple machine. Innovation is the area that has been one of our real premier areas. And now the breadth of those machine tools has reached a whole new area. We now manufacture laser gunning machines here, and we’re going into the manufacture of “additive” machines as opposed to subtractive (that create parts by cutting and shaping metal). We’ve come up with a product that will be additive and subtractive. It combines the existing sophisticated multitasking capabilities with the ability to add features and then precision machine them.

MG: Additive is a whole new range of machine-tool activity?

BP: It’s going to add a whole other level of growth to what we do. And we are clearly moving in that direction to embrace that technology.

MG: There are individual machines, but you sell lots of systems. Is there a typical Mazak customer order?

BP: I have a theory about machines. When you look at a factory, you look at it as a highly complex – look at these machines, and the handling and so forth. Well, a good share of the machines we make are actually pre-engineered modules. I think of them as a LEGO set for adults; you have these pre-engineered things that can go together to make something more complex. When we look at a factory, we look at each one of all the things that come together as pieces, that fit together and are pre-engineered – a quotation can be made from an iPad.

You’re just putting all these pieces together in different ways. You can have different numbers of loading stations, different numbers of machines and a palletized system that can have one or eight machines in it. You can grow it over time: Different numbers of tools can be included. So it becomes something very complex, but actually the components are pre-engineered. And we’ve done nearly 1,000 of those in North America alone. We’re doing so much proprietary work on things, even defense projects. We have to sign NDAs for everything we do.

MG: Your relationship with customers can be very collaborative. How many customers order straight from your catalog, as it were, versus customers for whom you have to create a customized product or system?

BP: It’s a blend. Probably half the machines customers order are pretty standard, and then there’s another group of machines that there’s something completely unique about it. And then there are those – and that may be the other 25 percent – that have really got some engineering involved. Special software, special handling, a lot of robotics involved that might be special. Today there’s a lot of partnering in the industry among people who make specific products that come together with our products.

MG: Special licenses are required at least some of the time to purchase your products. Why is this?

BP: It’s restricted in terms of where we sell them. The concern is always that, because of the sophistication of the products, in the wrong hands they can make products for weapons systems and so forth that could be detrimental to our country. And we’re very, very supportive of doing that because, as a company, we want to be very careful about that. We have to get licenses on products that we import: for instance, an export license out of Japan. We also need export licenses to send a machine to Mexico that is a Japan-produced machine. It’s a little complex. But the reason is to control where machines go. Mazak took a further step and put something in our machines that’s not a GPS system, but we call it a relocation detector. The relocation detector essentially shuts off the machine if you move it. And we have to then verify the location and give a new password for that machine. Let’s say a machine becomes a used machine, and it’s sold to a used machine dealer who sells it to another used machine dealer. At some point you have the potential to lose track of where that machine is. But they can’t start the machine until we know where it is and what it’s doing.

MG: How many of your products have relocation detectors?

BP: All of them. Not just some: all. We’ve been doing it for maybe 6-7 years now. As the old ones get retired, we’re getting a base of knowledge that we can feel very secure.

MG: How significant is it for Kentucky business industry to have a machine tool maker like Mazak located here?

BP: Yes. And we’ve evolved into a company that is known everywhere in the world in manufacturing circles. We’re known as a high-tech leader in manufacturing. The International Machine Tool Show in Chicago every two years is the largest – it’s 1.2 million s.f. Mazak is the biggest presenter and has the premier booth, front and center. But it’s much more than machine tools and draws companies from all over the world to show manufacturers all kinds of new technology related to manufacturing. That include more software and IOT compatibility as we look towards the future and adaptive technology that I spoke of, these adaptive machines.

MG: Do the local or state economic development officials use Mazak as a recruiting tool?

BP: A great deal of the companies that have come to Kentucky have come through our plant, looking at what we do and deciding where they’d like to locate. We have a very strong passion towards this area. So we’re happy to do that, and I think we do set a nice image, because the equipment is very modern, the method of manufacturing is very up-to-date and the technology that we use is up-to-date.

MG: Is current public policy and government regulation for your industry at an appropriate level, or are there changes that you would advocate?

BP: We would like to see the tax code change. This country is the highest for corporate income tax. Not just for us – I’d like to see it change for manufacturers; that would improve the ability to recruit them and keep them here in the U.S. Looking at the future, there’s a danger that other countries could go farther in terms of advocating compatibility in the IoT or Industry 4.0. I’m starting to see initiatives towards tax incentives for investment in that area by other countries. We’re the leading country, and you don’t see that being advocated. I’d like to see the government give encouragement to manufacturers to invest in IoT technology. But because of our international connections, I see that this could move faster in places like Japan, Germany and even China than here. The technologies are here, and the big guys in IoT are here. But there’s not really a specific incentive to invest in that.

MG: What are your expectations for growth and demand in the near term?

BP: Now is a slow time because of the global economy. For our customers who export to a place like China, if China’s economy is slow, then Caterpillar sells fewer machines, and their subcontractors make fewer parts, and that all comes back to us. Right now large construction equipment, mining equipment, farm equipment and the oil and gas stuff particularly all are slow. So that affects us. Aerospace is high, and medical is coming up, and the automotive industry is hot. So we have some pluses and minuses. Those companies right now that are only oriented towards automotive manufacturers are doing well, but those that only do business with oil service are really bleak. Mazak is much more diverse, so we have some pluses and some minuses. But the net effect now is a little negative.

But the future? Excellent. I feel very good about manufacturing here and what can be done from a manufacturing standpoint. I’m also including Mexico, because the U.S. is so closely related economically. There’s a lot happening in Mexico for U.S. companies too.

MG: Do you have a closing statement?

BP: The future of manufacturing is going to be much different than we’ve known it. Even for people who feel comfortable that it has advanced and is different than it was, it’s going to be much different in the future, much more so. There are going to be very good job opportunities for people if they have the right backgrounds. And each manufacturing job will provide multiple jobs outside that company. I see it as a nice opportunity for us because our customers are all kinds of manufacturers who make precision equipment, and the way we’re going to address that is to be a continual innovator, come up with new products. So I think it’s going to be a strong success for this company. ■

Mark Green is executive editor of The Lane Report. He can be reached at markgreen@lanereport.com.

Economic Development, Features, Features, January 2016, Technology, Workforce Development

Now Entering Silicon Holler

Two of the poorest and most rural counties in the state, and country, also have some of the fastest Internet service

Two of the poorest and most rural counties in the state, and country, also have some of the fastest Internet service

How fast is your Internet download speed? Twenty megabytes per second? Thirty? A hundred? If your download speed exceeds 100 mbps, you’re zooming past most of the rest of the nation. The national average Internet speed as measured by cloud service provider Akami in its 2015 State of the Internet report was 11.9 mbps. Worldwide, the average speed was 5 mbps. In rural areas, speeds are generally considerably slower, if there is service at all.

Cruising the Internet at those speeds in Jackson County or Owsley County, however, will get you run off the information superhighway. Those two counties – two of the poorest and most rural counties in the United States – have some of the fastest Internet speeds in the world: up to 1 gigabit per second.

And it’s not just in a handful of places in Jackson and Owsley counties. Thanks to a six-year, $50 million effort to run fiber optic cable throughout its service area, the People’s Rural Telephone Cooperative (PRTC), based in McKee in Jackson County, can deliver that 1 gigabit or 1,000 megabytes per second Internet speed to every home, business and school in the two counties.

Keith Gabbard, CEO,  People’s Rural Telephone Cooperative

Keith Gabbard, CEO,
People’s Rural Telephone Cooperative

Keith Gabbard, chief executive at PRTC, told a crowd gathered Oct. 22 for a “Gig launch ceremony” that PRTC had been in the fiber business for some time before deciding in 2009 to go with an all-fiber network.

“As of now, 100 percent of our customers have fiber available,” Gabbard said. “Every home and business has a fiber connection, or can have one. What we’ve done here is pretty impressive because we have it to every single home and business, not just in this town (McKee), but to every place to the farthest holler out. Everyone has the same capability.”

Fiber optic cables transmit data via pulses of light sent through glass or plastic strands slightly larger than the diameter of human hair. Traditionally data has been carried via copper wires that conduct electricity. In the early days, of course, the only “data” carried was voice data. With the growth of the Internet, phone lines and dial-up modems gave way to coaxial cable and high-speed routers. Coaxial cable is a thicker copper wire surrounded by insulation, like the one that probably runs to your modem or cable box. Ethernet cables like the one connecting your computer to your network contain copper strands that carry the data.

From copper to fiber, step by step

Copper tends to experience electrical leakage and is subject to electromagnetic interference, however, and its bandwidth – a measure of how much data it can carry – is less than fiber optic cable. Copper also needs a more extensive network of junction boxes to boost the signal as it travels over long distances.

On the downside for fiber, most computers are built to handle copper connections. Since any connection is only as fast as its slowest point, having fiber optic cable run up to your home or business only helps to the extent that the equipment inside the walls is maximized for speed. That said, the higher bandwidth of fiber optic cable means you can have a lot more going on inside your walls – a business, for example, could have multiple simultaneous videoconferences, multiple large data downloads, an entire phone system – and the outside wires can handle the traffic.

It wasn’t that long ago, relatively, that Jackson and Owsley counties had no phone service at all. The PRTC was formed in 1950 and used money available in the form of low-interest loans through the federal Rural Electrification Administration to construct a telephone network. Customers were owners of the business, and profits went to pay off the loans.

In an interview, the PRTC’s Gabbard said over the years the cooperative replaced and expanded the copper network repeatedly as the population grew and spread. The updating and maintenance were constant, he said, and as Internet use grew the PRTC heard from customers that they wanted better service.

In the 1990s, PRTC partnered with four other small Eastern Kentucky companies to form Appalachian Wireless. As part of the effort to build that cellular network, a 375-mile ring of fiber optic cable was installed. Fast forward to the mid-2000s. As PRTC considered ways to upgrade its Internet service, that fiber optic cable looked like a pretty good starting point.

The PRTC funded construction of its fiber optic network through a combination of timely grants from the Rural Utilities Service arm of the U.S. Department of Agriculture, loans, stimulus money from the American Recovery and Investment Act of 2009 and the PRTC’s own capital. After spending $50 million to complete the project, PRTC has about $19 million in debt outstanding. Money to pay that back will come from user fees, as well as the successful Appalachian Wireless business, Gabbard said.

Appalachian Wireless serves its own customers and collects fees from Verizon, which also uses the wireless network. With few other wireless providers willing to build their own networks in the mountainous terrain, the wireless business model is strong enough to help support PRTC’s broadband initiative, as well. That’s helped keep the PRTC from having to raise rates to cover loan servicing costs.

Gabbard said the availability of the loans and grants, plus stimulus money, presented a “once-in-a-lifetime opportunity.”

Mule power helps close digital divide

Mixing in traditional means as it moves to the modern cutting edge, People’s Rural Telephone Cooperative based in McKee has used a mule named Old Bub to help with its last-mile installations of fiber-optic based gigabit Internet connectivity to all its customers in Jackson and Owsley counties in Eastern Kentucky.

Mixing in traditional means as it moves to the modern cutting edge, People’s Rural Telephone Cooperative based in McKee has used a mule named Old Bub to help with its last-mile installations of fiber-optic based gigabit Internet connectivity to all its customers in Jackson and Owsley counties in Eastern Kentucky.

Fully 70 percent of the fiber optic network in Jackson and Owsley counties runs above ground. As it turned out, even the highest of high-tech networks had to rely on the lowest of low-tech methods for installation. At points in the tougher terrain, a mule named Old Bub pulled the cable from pole to pole. Some photos of the operation made the rounds via e-mail earlier this year.

The image of a mule pulling fiber optic cable through the mountains probably seems like a fitting juxtaposition to those not aware of Kentucky’s efforts to close the digital divide. The PRTC’s gigabit network stands out as an example of a fully local initiative, but the state has announced its own plans to improve and expand broadband access.

The KentuckyWired I-Way broadband initiative aims to provide reliable, high-speed Internet service to every county in Kentucky. The estimated $324 million project will build what’s known as a “middle mile” fiber optic network. State officials likened it to building a highway through the state. That highway will have some 1,100 “nodes” at government user sites, including five Kentucky Community and Technical College System sites in Eastern Kentucky.

The I-Way will provide tiered access to speeds up to 400 gigabits – yes, that’s 400,000 megabits – per second. Adequate end-user equipment will be essential to using such capacity, and it will be up to local communities to build the “last mile” – to connect individual homes and businesses to the nodes.

The recommendation to build such a statewide open-access network was one of many that came out of the Shaping Our Appalachian Region (SOAR) initiative co-chaired by former Gov. Steve Beshear, a Democrat, and Republican U.S. Rep. Hal Rogers, whose district encompasses most of Eastern Kentucky. Partly as a nod to that impetus and partly in response to the severe economic downturn in Eastern Kentucky due to the dramatic decline in coal jobs, KentuckyWired construction will start at the eastern end of the state and over the next three years extend 3,400 miles across the state to all 120 counties. Work in the 54-county SOAR region is expected to be finished in summer 2016, with the rest of the state completed by late 2018.

High speed for … jobs in the hollers

The kick-off celebration for KentuckyWired was held Aug. 31 at Hazard Community and Technical College. Beshear said the project would bring much-needed Internet access to all communities.

“The potential for every Kentuckian to tap into the global economy, compete for higher paying jobs, collaborate with researchers around the globe, take classes online, or access increased medical care make KentuckyWired one of the most important infrastructure projects in our state’s history,” Beshear said.

Rogers added that with the capacity and connectivity “the only limit is our creativity. It’s up to us to put this resource to work for economic diversity, job creation and improved opportunities for the people of Eastern Kentucky.”

Jared Arnett, executive director of SOAR, called the extension of broadband service “a literal economic lifeline” in today’s increasingly digital economy and said it can’t reach communities fast enough.

KentuckyWired is the state’s largest public-private partnership. A consortium led by Macquarie Capital of Australia will provide the bulk of the funding via the issuance of debt and equity. The General Assembly approved $30 million in direct state funding in 2014, and the federal government is kicking in another $23.5 million. In August, the Kentucky Economic Development Finance Authority approved the issuance of $232 million in revenue bonds to finance a loan to the consortium, KentuckyWired Infrastructure Co.

Payments on the debt will be made via the state transferring its current lease payments for Internet service to KentuckyWired. In essence, the state and local governments – anyone with a node – will be paying KentuckyWired to use the Internet.

This setup actually has PRTC’s Gabbard slightly concerned. The way things are worded now, local governments and school districts in the PRTC’s service area would end up being among those 1,100 KentuckyWired nodes, and could be told to use the KentuckyWired fiber network instead of the PRTC’s. That would cost PRTC money. Gabbard said he hopes the PRTC can work with KentuckyWired to avoid building a parallel fiber optic network in Jackson and Owsley counties.

Jackson, Owsley jobs only ‘a starting point’

The potential for high-speed fiber network duplication in one of the poorest parts of Eastern Kentucky carries a hint of irony given the overall lack of investment in the region historically. Nevertheless, from an economic development perspective it might not be possible to have too much of a good thing. The emergence of fracked shale gas in the past decade means significantly fewer coal jobs, but plentiful broadband brings better chances to create a diverse patchwork of technology jobs that can help fill the void – and create an entirely new economy centered around technology.

Jeff Whitehead, executive director of Eastern Kentucky Concentrated Employment Program, said the PRTC broadband project and KentuckyWired “takes the lid off of the potential for both economic development and for what people can do from their homes.”

EKCEP, based in Hazard, provides job training, employment assistance, career counseling and tuition assistance for half a million people in 23 Eastern Kentucky counties, including many hit hard by the loss of coal jobs. In 2015, Whitehead said, the PRTC gigabit network has led directly to some 110 new jobs in Jackson and Owsley counties. Almost all of them are for companies based out of state – one employer is based outside the United States – and involve customer service work done remotely, often out of one’s home. The average salaries for these jobs are around $20,000 a year, but most have benefits.

“That’s not knocking it out of the park at this point (in salary), but they are still jobs you can do from home and not have to spend gas money,” Whitehead said. “We’re not satisfied with that; it’s a starting point.”

Down the road, he said, fast broadband service could lead to more and better-paying technology jobs, the ability to do remote job training, and ultimately lay the groundwork for a new generation of locally grown technology entrepreneurs who will be job creators of the future. Eastern Kentuckians prefer not to have to leave their families and their connections to the land to find work. Being connected to the rest of the world via the Internet could mean fewer locals will have to leave, and it could draw in new people who need that connectivity but don’t want to live in a big city.

Isolation ends; school’s never cancelled?!

Local schools are already benefitting from better connectivity. Owsley County Schools Superintendent Tim Bobrowski said the gigabit network has allowed the district to expand the use of “virtual schools,” or instruction over the Internet. As a result, a district that formerly had to make up in the summer an average of 20 snow days per year now can engage students at home, via online programs like Blackboard and Edgenuity that allow students to complete coursework for up to 10 snow days. Additionally, students who get suspended can continue classwork from home as opposed to just sitting at home not learning.

Owsley County Schools officials are working on a plan to get laptops like Chromebooks into the hands of some classes next year – as many as two grades per school, Bobrowski said.

As limited as Eastern Kentucky’s economy has seemed in recent years, the possibility broadband brings has people excited. Change won’t come overnight, but already the region’s eagerness to embrace the economic opportunities technology has to offer is changing perceptions.

Some locals are still buzzing about a story that appeared in mid-November on medium.com’s tech-focused section Backchannel. The author profiled Bitsource, a Pikeville company that aims to turn former coal miners into code writers and make a profitable business out of it. The story by Lauren Smiley – “that lady from California” – showcased local entrepreneurship and, perhaps as importantly, local pride.

Hilda Legg, a former administrator of the USDA’s Rural Utilities Service and a past co-chair of the Appalachian Regional Commission, said the gigabit service in Jackson and Owsley counties could also serve as a point of pride as well as a practical way to connect a historically isolated area to the rest of the world. She praised the PRTC not only for having the foresight and willingness to take on the risk of building the fiber optic network but also for promoting it and showing customers how it can help them.

Legg has been called a “broadband evangelist” and she isn’t shy about describing the PRTC’s gigabit network as a blessing. Appalachia has a history of relying on help from outside – be it from mining companies to provide jobs or government programs to fight poverty. Broadband, Legg said, has the potential to change the way locals see themselves.

“We can’t have generation after generation looking to the outside for help,” Legg said. “We’ve got to work at changing the way we look at ourselves and this beautiful, abundant region. I hope it will embolden residents to broaden their opportunities. Quit looking at yourselves in terms of what you don’t have, but rather look at yourselves for what you do have.”

Most of the rest of America – even larger cities – don’t have gigabit Internet service, she said.

Fast Internet service isn’t an elixir for curing the unemployment, drug abuse and attendant health issues that persist in Appalachia, Legg said, but it can be an important tool.

“If you remain isolated, you don’t tend to be able to raise yourself up. It will take time and there are no simple solutions,” she said. “But you have to start with pride in what you have.”

Features, Features, January 2016, Workforce Development

The Art of Workforce Development

Bill Cloyd provides a hands-on demonstration of mechanical advantage to field trip students as they load G-Force, the bungee powered mini-rollercoaster built years before as an engineering project by students at West Jessamine High School.

Bill Cloyd provides a hands-on demonstration of mechanical advantage to field trip students as they load G-Force, the bungee powered mini-rollercoaster built years before as an engineering project by students at West Jessamine High School.

Across pockets of the Bluegrass State, kids of all ages are delving into cool, project-based learning designed to build a future workforce that embraces technology in every facet of corporate growth.

Forget routine memorization, or weeks of pop quizzes as primary learning tools. Career paths are now crafted around visionary undertakings of their own design: building robots; planning a satellite payload; constructing a building; wiring a circuit board; building a 3-D printer; or making sporty transportation like skateboards from start to finish.

Workforce development with clear intent toward tech and advanced manufacturing careers has become a groundswell in the commonwealth as corporations, educational institutions, parents and even students realize that the future is now. Across the state there are many unfilled jobs that require technology training – usually with math and science underpinnings – and that number is only increasing. To stay competitive, business and industry today pursue productivity and process improvements at a rate that has outpaced static training and education models.

The goal is a workforce pool that not only possesses tech know-how but knows how to be creative and problem-solve within that realm. It’s driving executives and administrators to build innovative thought processes into the skills development process, in classrooms and in the broader environment.

What is STEAM?

This approach is known as STEAM outreach, which stands for Science, Technology, Engineering, Art and Math. The term STEM, leaving out the “A” for art, has become better known – since some argue art and creativity are within science-based disciplines by definition. This outreach encompasses after-school programs, curriculum at the school level, specialty internships, field trips, nonprofit and club-based maker spaces, in-classroom year-long projects, and field work for companies where mentoring is possible.

While a middle and high school focus is apparent, many programs are being redesigned for K-12 in after-school models and clubs as well in the classroom, particularly by training teachers to deliver project-based learning.

Efforts in Kentucky are part of a much bigger race toward hands-on learning. Nationwide, STEM jobs are growing 1.7 times faster than non-STEM jobs, according to the U.S. Department of Commerce. A Kentucky Chamber of Commerce report in December found the commonwealth adding manufacturing jobs at three times the national rate.

Brad Thomas, Associate Manager  of Economic Development, East Kentucky Power Cooperative

Brad Thomas, Associate Manager of Economic Development, East Kentucky Power Cooperative

“Many people living in Kentucky don’t understand that we are an advanced manufacturing state. We’ve got to design (supporting) ecosystems here that work,” said Brad Thomas, associate manager of economic development at East Kentucky Power Cooperative. “Education is responsible for you getting the career you now have. We need to be saying to our kids: ‘We make aerospace products in the state. Would you like to do this?’ ”

Thomas enjoys loading up his truck and showing off a mini-satellite to the school-age, because at once there is a spark of excitement…especially when they realize they could learn how to build one, man it with a science project, or be a part of a launch.

East Kentucky Power Co-op actively supports the two-year-old Shaping Our Appalachian Region (SOAR) initiative, primarily through a STEM-based-education workforce initiative for educators across Eastern Kentucky. The project will equip 100,000 students and 3,000 teachers in that region with world-class science, technology, engineering and math skills.

The aerospace products comment by Thomas, also a Kentucky Association for Economic Development board member, references the fact that fully half of Kentucky’s annual exports are divided between $7.8 billion in aerospace parts and products, and $5.9 billion in motor vehicles, parts, bodies and trailers.

“STEAM is not just computer-based learning,” said Ken Talley, director of career and technical education for Jefferson County Public Schools. He cites several programs begun in the last decade that bring the “real world” into the classroom.

One growing annually is a partnership with the local ACE Mentor Program of America affiliate, in which members of the architecture, construction and engineering (ACE) fields help mentor high school students and inspire them to pursue careers in design and construction. In its seventh year, it now touches 70 public and Catholic education students at Louisville-area high schools such as Jeffersontown, Iroquois and Trinity.

Open community labs and workshops known as maker spaces also are cropping up. For example, Shawnee Alumni Club has undertaken funding with several community partners for one at Shawnee High School in Jefferson County. Other student maker spaces in Louisville include LVL1 in the Butchertown area; UofL’s Engineering Garage (new-2015); The Maker Place of the local Kentuckiana Girl Scouts (new-2015), and Fab Lab at the private Kentucky Country Day School.

STEAM curriculum advancement at the school district level has seen interesting progress in the last decade. In 2013, Fayette County – in partnership with the University of Kentucky – created a STEAM Academy whose mission is to graduate 100 percent of its students, leading them to college or careers in the 21st-century global workforce. UK is hosting, but there are efforts to find a new permanent location.

Launch of Kentucky FAME

Large employers such as Lockheed Martin support programs that encourage education in science, technology, engineering and math, which the company believes requires collaboration among industry, educators, policy makers and families.

Large employers such as Lockheed Martin support programs that encourage education in science, technology, engineering and math, which the company believes requires collaboration among industry, educators, policy makers and families.

Many across the state are watching the new Kentucky Federation for Advanced Manufacturing Education (KY FAME) program, a partnership between Kentucky Community and Technical College System and regional manufacturers to implement dual-track, apprenticeship-style training.  This will create a pipeline of highly skilled workers through community colleges, with early outreach to high school and certain middle school populations. After launching in 2014 in the Bluegrass region, KYFAME expanded to eight regional chapters in 2015. The fundamental skills imparted come from the Advanced Manufacturing Technician (AMT) program curriculum developed by Toyota and Bluegrass Community and Technical College.

Nationally, manufacturers estimated they have at least 600,000 unfilled jobs because appropriately skilled workers cannot be found. Salaries for these “mid-skilled” employees range from $30,000 to $80,000 a year. KY FAME students attend AMT classes two days per week at a KCTCS location and work 24 hours (three normal work shifts) per week for a sponsoring employer.

Students receive an associate degree in applied sciences in 15 months and can expect to begin full-time employment with their sponsor company. In Western Kentucky, sponsors include Wacker Chemical; T.RAD North America; Briggs & Stratton; Centrifugal Technologies; Baptist Health Madisonville; Vanderbilt Chemical; Progress Rail Services; Hibbs Electromechanical Air Relief; Integrated Metal Solutions; MVP Group International; International Automotive Components; MRCOOL; ACE Compressor Services; and GE Aviation.

Other programs addressing career pathways are due for re-evaluation and refinement.

The Jefferson County Public Schools system is in the fifth year of its 5-Star Schools program, offering hands-on training in five technical themes touching on 100 career and technical education pathways, Talley said. It may soon reconvene its task force to redesign and move forward in 2016.

“It almost always requires community support to start a new program because of legislative limits on funding,” he said. “There’s a need to offer more career counseling to our high school graduates, and it needs to be addressed.”

A part of the model that JCPS believes works are externships for teachers to bring them together with employers and explore careers that serve today’s workforce, Talley said.

Jerry Burke, who has taught welding at Jeffersontown High for 20 years, recently completed an externship and engaged his junior-level students in a real world project for Raptor Rehabilitation of Kentucky to create and install a security gate. Ford Next Generation Learning is a grant-type program feeding this type of model.

Youth apprenticeship programs rolled out 

Beyond teacher externships, public education also offers more hands-on apprenticeships.  Another statewide youth pre-apprenticeship program announced in September 2015 is the Tech Ready Apprentices for Careers in Kentucky. TRACK is a partnership between the Kentucky Labor Cabinet and the state Department of Education’s Office of Career and Technical Education. It provides secondary students with career pathway opportunities into registered apprenticeship programs like welding, electrical work and carpentry. Students can receive a nationally recognized credential at little or no cost that is valued by employers looking for job-ready workers.

Where are the STEAM careers?

Workforce avenues are now monitored by a number of national and regional organizations tied to K-12 education.  As defined by the national Metropolitan Policy Program at Brookings Institution, these are the top STEM occupations in Jefferson County: computer occupations; health diagnosing and treating practitioners; construction trade workers; financial specialists; engineers; metal and plastic workers; operations specialty managers; other installation, maintenance and repair occupations; and electrical and electronic equipment workers, mechanics and installers.

STEAM investments in higher education

Jefferson Community and Technical College has included a $33.4 million Advanced Manufacturing/Automotive Technology Center among its capital budget funding priorities for 2016. The center is to be built adjacent to the downtown campus on Broadway in Louisville.

Private byte-sized education also is appearing. Software coding boot camps are appearing for adults already in the professional workforce who are looking for additional skills, or those who’ve taken some college-level math courses but are up for more intensive training.

The Software Guild, now a part of The Learning House, is actively addressing education needs in Louisville for entry-level software developer positions. As the region’s adult software coding boot camp, it teaches .NET and Java skills in 12 weeks, aiming to train workers to fill the hundreds of open tech jobs in Kentuckiana. The next classes start in February. ν

Dawn Marie Yankeelov is a correspondent for The Lane Report. She can be reached at editorial@lanereport.com.

Advanced Manufacturing, Features, features, October 2015, Workforce Development

Three-year Outlook: Record Sales

More than 200 attendees at AutoVision, an inaugural conference by the Kentucky Automotive Industry Association last month focusing on the sector’s future, heard they can keep their feet on the gas pedal.

Automotive journalist Lindsay Chappell, right, conducts an AutoVision conference discussion of “The Next 10 Years in the Auto Industry” with, from left, Yoshimasa Ogino of Akebono Brakes, Chris Nielsen of Toyota, and Tom Kroskey of General Motors.

Automotive journalist Lindsay Chappell, right, conducts an AutoVision conference discussion of “The Next 10 Years in the Auto Industry” with, from left, Yoshimasa Ogino of Akebono Brakes, Chris Nielsen of Toyota, and Tom Kroskey of General Motors.

“Be thankful you are in the United States and in the auto industry,” said Mustafa Mohatarem, chief economist for General Motors.

The U.S. economy, though far from its best self since the Great Recession, is stronger and healthier than any other around the globe, especially any of its chief rivals. And the auto market, Mohatarem said, is about to begin three years that will rewrite sales records.

Probably the chief concern of the auto industry in Kentucky is ensuring that it has an adequate ongoing supply of skilled workers. It is also a primary issue for automakers around the world, AutoVision’s audience heard.

The industry has workforce worries that education systems in Kentucky and elsewhere are not producing enough electrical and computer engineers to create the connected systems that self-driving cars will require if they are to fulfill growing expectations of dramatically lower traffic accident and fatality rates.

In the meantime, Canada and Mexico are producing vehicles at all-time record numbers, the 33-year GM veteran said. And better yet, light-vehicle makers in the United States are about to experience three very fat sales years, in the estimation of GM’s global economic experts.

U.S. sales are nearing the record level achieved 14 years ago, but Mohatarem said those 2001 sales were artificially inflated because the auto industry then was heavily reliant on customer incentives – price cuts or rebates – whose costs also were at all-time high levels.

Mohatarem said GM’s expectation is that vehicle sales in the United States will peak in 2016, setting a new record, then stay at just below that level in 2017 and 2018.

The seasonally adjusted annual sales rate for U.S. vehicles in August, Automotive News reported, equates to 17.8 million vehicles for a year. September sales posted an impressive SAAR of 17.7 million.

On Oct. 1, TrueCar.com raised its 2015 industry sales forecast by 200,000 to 17.4 million, which would top the industry’s all-time high of 17.395 million, set in 2000.

And that is very good news for Kentucky’s auto industry, which includes Toyota’s largest vehicle assembly plant in North America, GM’s expanding Corvette plant in Bowling Green, two Ford assembly plants in Louisville where production and employee numbers are growing, and more than 470 automotive-related supplier operations that support 136,500 jobs in the commonwealth.

“This time it is much better” than in 2001, Mohatarem said, because sales are not reliant on incentives that, while they keep production lines operating, produce artificial demand and little bottom line profit with which to reinvest. Additionally, the economy driving U.S. vehicle sales today is doing so in a manner that the industry is confident is sustainable.

The low, slow growth since the Great Recession – when sales collapsed and U.S. carmakers themselves nearly failed – is built from a reliance on low interest rates by financial and monetary policy makers, Mohatarem said. While it has taken a longer time and created lower GDP growth than everyone would like, that growth is the product of organic marketplace demand.

By contrast, he said, China has had 10 percent annual GDP growth since 2002 and been “the dominant contributor to global growth,” but it did so using artificial financial stimulus. Government spending for massive Chinese infrastructure and housing projects created economic growth and markets for raw materials and consumer products, but it was a “false demand” that built industrial capacity far beyond what its private-sector markets can absorb.

“China has huge excess capacity of steel especially,” Mohatarem said.

Its growth has slowed significantly and is likely about 4 percent, he said, not the 7 percent that China’s government claims officially. The surprise 3 percent Chinese currency devaluation in August that continues to reverberate in stock markets reflects its economic distress. Though it makes China’s products cheaper, and other countries might devalue their currencies also to compete – increased trade friction is likely, Mohatarem said – this and other global financial trends are indications of the strength of the U.S. economy and are working in its favor.

Although many Americans worry the $3.5 trillion in U.S. assets, mostly Treasury bills, that China holds gives it a strong hand, Mohatarem explained that this restricts China’s options to game trade by further devaluing the yuan. The 3 percent devaluation improved the price competitiveness of their exports but cost the Chinese more than $100 billion in value on those U.S. assets.

Another significant world economy and rising U.S. rival, Brazil, has gone into a deep recession, Mohatarem explained, because it had shifted its economic policy focus strongly toward China, whose high GDP growth had made it look like a better market for Brazilian commodities and other products.

The Russian economy is in recession also due to its reliance on high oil prices, which have halved in the past couple of years as a result of hydraulic fracturing technology adding millions of barrels of shale oil production. Most of that comes from the United States, which has become the world’s largest petroleum producer.

“It is a huge revolution,” Mohatarem said, who sees “no path out of recession for Russia.”

In a wide variety of AutoVision presentations on the future of the industry, there was much discussion that self-driving vehicles are only several years rather than decades away. “Adaptive” cruise control technology on some current models makes them nearly driverless. What is lacking, however, are systems that give vehicles digital connectivity to one another and to the roadways.

This is generating anxiety among industry human resources officials and planners about a sufficient number of engineers graduating from colleges in Kentucky and elsewhere to work on creating and enhancing those systems.

The industry is concerned about its access to enough skilled workers, period. A global survey found 50 percent of industry members saying they have serious worries that they will be able to fill their jobs with qualified workers.

The Kentucky Federation of Advanced Manufacturing Education program, developed from a collaboration beginning several years ago between Toyota officials in Georgetown, Ky., and Bluegrass Community Technical College in Lexington, is the premier initiative to build a skilled workforce pipeline.

Kim Menke, manager of community and government relations at Toyota Motor Engineering and Manufacturing North America, is chairman of the KY FAME board. U.S. manufacturing as a whole expects to fill 3.5 million jobs in the next decade, he said.

“We are looking at a 2 million worker deficit,” Menke said.

Features, September 2015, Workforce Development

Jobs for veterans ranks high

Regional employers hear firsthand from soldiers at Fort Knox. Where Opportunity Knox hosts quarterly tours at Fort Knox as part of their employer outreach, and more than 130 employers participate in the program currently.

Regional employers hear firsthand from soldiers at Fort Knox. Where Opportunity Knox hosts quarterly tours at Fort Knox as part of their employer outreach, and more than 130 employers participate in the program currently.

Each year, an estimated 130,000 U.S. soldiers transition from active duty service, and of those, more than 3,000 are from Fort Knox, according to Where Opportunity Knox, an organization designed to help match transitioning veterans and their spouses with employers in the 26-county Greater Louisville region.

Exiting soldiers enter into civilian life through the Department of Defense Army Transition Assistance Program (TAP), based at Fort Knox’s U.S. Army Human Resources Command. TAP provides job search assistance and counseling services for soldiers and their family members.

But civilian employment challenges can loom large for these veterans. A 2015 Department of Veterans Affairs Veteran Economic Opportunity Report found that nationwide “in recent years about half of all service members transitioning into civilian life have faced a period of unemployment within 15 months of separation.” While the opportunity report found 95 percent of veterans will find employment before using their allotted 26 weeks of unemployment benefits, the average unemployment used had risen to 22 weeks in 2013 compared to an average 18 weeks in the previous six years.

As an additional resource to pair veterans with jobs, WOK launched in September 2014. Regional veteran connectors provide free, personalized assistance using veterans’ and spouses’ talents and job and relocation preferences to help them find jobs, especially with one of WOK’s more than 100 participating employers in the region.

In addition to serving Fort Knox area veterans, WOK representatives visit Fort Campbell monthly to assist veterans in that part of the state, said WOK Executive Director Beth Avey.

“We especially developed this with the small to medium businesses in mind, which don’t have the resources necessarily of a larger company – but really we have companies of all sizes,” Avey said.

WOK is an initiative of the Kentucky Indiana Exchange, which along with area workforce investment boards performed an initial market study to develop the model for the program. It is funded by The Ogle Foundation Inc., Duke Energy, The Gheens Foundation Inc. and the James Graham Brown Foundation.

‘Passionate about the veteran workforce’

Second-quarter data is still being compiled, but Avey said 1,036 veterans were hired with the help of WOK from the program’s fall 2014 launch through the first quarter of 2015. The goal by the end of 2015 is to achieve a total 2,500 veteran hires in a variety of fields, including information technology, manufacturing, healthcare and law enforcement, among other sectors. A longer-term goal is to connect 10,000 veterans by 2017.

In addition to WOK, a number of other military and community-based organizations are helping put veterans to work in the state. The Kentucky Jobs for Veterans Program has a presence in 10 regions throughout the commonwealth and is open to veterans of all military branches plus the Kentucky National Guard. Through Kentucky Career Centers, this program provides training, skills assessment and job search assistance, with specialized services for disabled veterans.

The Kentucky Society for Human Resource Management is also working with Kentucky Career Centers to help encourage employers to hire veteran workers. Kentucky SHRM Workforce Readiness Director Sherry Powers said for the past eight years her organization’s members have been encouraged to post all open job positions with the career centers and participate in periodic veteran job fairs the KCC sponsors.

“Honesty, perseverance and strong work ethic are the benefits our vets bring to our information systems and support careers,” Powers said. “Diversity, harassment and leadership are just a few of the areas (in which) each has already been trained.”

The society also hosts resume, interviewing and networking workshops that can also help veterans during their job searches.

In mid-May this year, U.S. Secretary of Veterans Affairs Bob McDonald announced the launching of the Veterans Economic Communities Initiative in 50 cities that were chosen based on veteran population, projected future increases in this population and veteran unemployment rates. Louisville was selected along with cities like New York, Los Angeles, Atlanta and San Diego among the first 25 locales to participate.

In each community, VA Economic Liaisons are tasked with encouraging public and private collaboration toward veterans’ education, training and employment opportunities. The program’s website says selected communities will conduct employment summits for veterans and employers with “immediate hiring needs,” and create policy academies to help brainstorm ideas and shape policies to increase veterans’ employment opportunities. The cities also will create plans to enhance veterans’ entrepreneurial and other skills.

Farming’s next generation?

The agricultural sector also is looking to reap the benefits of transitioning veterans looking for work. As the average age of farmers nationwide nears 60 years of age, younger farmers are needed to replace them, and that’s where the Kentucky Department of Agriculture is stepping in.

“We see our military veterans and current service members leading the next generation of American farmers,” said Ben Shaffar, director of business development for the Kentucky Department of Agriculture’s Office of Marketing.

Similar to the Kentucky Proud branding effort that spotlights produce and products originating in the commonwealth, the Homegrown By Heroes program launched in early 2013 offers additional branding visibility with a distinctive logo for food that’s been veteran grown or raised.

With the help of the nonprofit Farmer Veteran Coalition, the HBH program has now expanded to about 90 members in more than 40 states, Shaffar said, providing a marketing boost to both longtime farmers who have veteran status and veterans who are new to farming.

“We’ve had tremendous demand from retailers, restaurants and the like who want to support the products being grown and raised by our military veteran farmers” in their venues, Shaffer said.

The goal is to have all states’ departments of agriculture or farm bureaus to support the program by 2017, with the hope that the U.S. Department of Agriculture will soon help HBH become the official marketing brand for farmer veterans.

The Kentucky Department of Agriculture also has partnered with Radcliff-based USA Cares; the Kentucky Proud Jobs for Vets program matches veterans needing jobs with farmers needing seasonal workers and provides an online application to connect farmers and veterans.

Since its founding in 2003, Radcliff-based USA Cares has developed a multifaceted approach to assisting post 9/11 veterans with emergency, housing, combat-injured and job-assistance programs, Director of Assistance Programs Angela Suarez said.

The job-assistance program began five years ago and especially helps veterans with financial barriers that may hamper them in successfully obtaining post-military employment. Assistance can include help with travel costs to a job interview, daycare expenses, relocation expenses or transitional funds to help veterans pay their household expenses until their first paycheck arrives, Suarez said.

For veterans who land jobs that require them to furnish their own tools, an expense that can cost thousands of dollars, USA Cares has a grant partnership with MSC Tool Supply to provide them. Private and corporate donations fund the job assistance program.

The benefits of hiring veterans are many. Veterans are known as loyal employees, and often have the technical and soft skills that employers are looking for, Suarez said.

“They have that education, that experience, that dedication to the company and what they do, and they’re very good at working under high pressure and have leadership skills as well,” she said.

Avey said WOK also serves as an ambassador for the Greater Louisville area, encouraging veterans to launch a new chapter of their civilian lives here.

“It’s about the quality of place and the quality of life that this region offers because we know that’s equally important to military families – so they can find a place that’s supportive of them,” she said.

Advanced Manufacturing, Education, Features, Technology, Workforce Development

Manufacturers Help Colleges Improve Tech Training Curriculum with KY FAME

KY-FAME_Toyota-Classroom-24-copy

The Kentucky Federation for Advanced Manufacturing Education program, which now has five active chapters around the state and others in development, arose from a collaboration initiated in 2009 by Toyota Motor Manufacturing Kentucky in Georgetown with Bluegrass Community Technical College in Lexington. Students are shown learning advanced technical skills in a classroom Toyota built at its TMMK campus.

Pioneered six years ago, a quickly expanding system of Kentucky employer-educator partnerships is paying student workers to learn advanced manufacturing skills that can maintain growth in the state’s increasingly significant industrial sector.

It’s an Americanized update of the apprenticeship approach to workforce development that German and Japanese industries have relied on successfully for generations – and it was created in central Kentucky.

Manufacturing is one of the fastest growing sectors in Kentucky’s recovering economy, said Josh Benton, executive director of workforce development in the Kentucky Cabinet for Economic Development. And the growth of career opportunities among Kentucky’s leading manufacturers is developing well ahead of the recovery of other industries, Benton said.

National studies chart a constant and steady rise in career opportunities in every state, according to Greg Higdon, president and CEO of the Kentucky Association of Manufacturers.

The commonwealth’s manufacturing gross revenues are up over 12 percent since 2009 with global exports fueling a large portion of the sector’s renaissance, Higdon said. Data show some U.S. manufacturing career growth is due to many companies bringing production operations back to North America, he said, but a more significant reason is that skilled workers from the baby boom generation are reaching retirement age.

However, human resource departments at company after company are finding it difficult to locate qualified job candidates in their locations to fill these well-paying open positions, Benton said. It’s a common concern among KAM and cabinet leaders that there are few applicants with the skill sets to perform today’s highly specialized tasks.

“Employers realized that we have fallen behind from the days when a company posts a job opening and is overwhelmed by qualified applicants,” Benton said.

The good news is that Kentucky’s private-sector manufacturers have taken a leadership role in addressing this issue, said Kim Menke, external and government affairs
manager for Toyota Motor Engineering and Manufacturing of North America. Menke is a lead spokesperson for a unique partnership between manufacturing firms and the Kentucky Community and Technical College System that has captured the attention of neighboring states and the U.S. Department of Labor.

This collaborative is the result of an employer-educator partnership (EEP) program pioneered in central Kentucky six years ago. The concept has been met with such enthusiasm in the private
sector and at the state government level that the Kentucky Federation for Advanced Manufacturing Education (KY FAME) is expanding throughout the commonwealth.

Kentucky’s solution to a national problem

Student workers in the KY FAME program spend two days a week in the classroom and three days a week at paid jobs with participating manufacturer partners, who help develop 18-month curriculums that lead to an associate’s degree and a full-time job.

Student workers in the KY FAME program spend two days a week in the classroom and three days a week at paid jobs with participating manufacturer partners, who help develop 18-month curriculums that lead to an associate’s degree and a full-time job.

With reported U.S. manufacturing job openings topping 1.5 million, the model is spreading beyond state borders, too. Toyota has applied it to its other manufacturing sites in North America, Menke said, adding, “We are changing the paradigm of how we use education to meet the current and future needs of manufacturing.”

The experiment that eventually grew into KY FAME started at Toyota’s Georgetown plant with the participation of Bluegrass Community and Technical College.

Benton labels KY FAME the “next generation in technical training” for achieving a career track in advanced manufacturing. Dianne Leveridge, Ph.D., director of technical programs for the Kentucky Community and Technical College System, agrees.

Today, KY FAME is a partnership of regional manufacturers and college educators developing degree programs that constitute a pipeline of qualified candidates for high-technology careers in manufacturing, Leveridge said. Students accepted into a KY FAME-based degree program will be employed by a company while attending college classes.

A key feature of this partnership is that it’s employer-led, she said. Companies identify to KCTCS professors their general needs for skilled specialists and, together, they craft an academic program that combines educating students on core concepts of manufacturing and professional behaviors with on-the-job experience and training. The usual weekly schedule has student-employees putting in three full work days at their sponsor firm and two full days in specialized KCTCS classrooms.

“Manufacturers will tell you that they were accustomed to luring talent away from each other,” Leveridge said. “KY FAME offers a better approach. The partner firms in a KY FAME chapter agree to participate in the education and preparation of students and create the pipeline of skilled professionals from college to their ranks.”

Gov. Steve Beshear formally adopted the pioneering program as a statewide initiative after being urged by Toyota Motor Manufacturing, 3M, Link-Belt and other leading manufacturers in the region. KAM and the Cabinet for Economic Development gladly added their support, said Higdon.

“The efforts of industry leaders and educators to craft this initiative is a critical component to developing a work-ready constituency coming out of our secondary and postsecondary education system. Soon Kentucky will have graduates ready to go to work in the modern manufacturing sector,” Higdon said.

By fall 2015, Leveridge said, the new KY FAME chapters will begin their apprenticeship-type operations in Louisville, Northern Kentucky, Greater Owensboro and the Lincoln Trail area of Elizabethtown and Bardstown.

KY FAME became a freestanding entity in January. Gov. Beshear appointed a state board and announced three new chapters had formed; the fifth came in May. Planned next steps are to establish KY FAME chapters in Paducah and Murray in the west, Bowling Green in the south and Maysville, Pikeville and Somerset in the east.

Concepts come from Toyota and Germany

The basic program concept itself is not new, Leveridge said. The EEP partnership that grew into the Bluegrass Chapter of KY FAME has been an evolving experiment in central Kentucky since 2009. KY FAME’s genesis arose from two particular threads, she said.

The first, and arguably most significant, occurred about six years ago.

Menke, who was in on the development, said Toyota recognized early on a need for a new approach to employee training. Typical of the company’s organized and efficient management style, he said, the company established measurement benchmarks and approached potential partners about creating a solution. In this case, the need was to develop the best program to produce globally competitive advanced manufacturing technicians in their area.

Toyota, along with other central Kentucky manufacturing industry partners such as 3M and Link-Belt, approached educators at Bluegrass Community Technical College in Lexington to establish the Bluegrass Manufacturing Collaborative in 2009.

Leveridge became involved through her role then with the University of Kentucky’s College of Engineering as director of Project Lead the Way – an effort to encourage secondary school students to become interested in science, technology, engineering and math studies (STEM).

“We knew at the time that (Kentucky private sector) manufacturing and technology interests needed to extend a hand into secondary and higher education, but we were still unsure about what that approach would look like,” she said.

In the first two years, a cohort of students began enrolling into initial Bluegrass Manufacturing Collaborative education-training classes sponsored by Toyota. As that training cohort evolved into an organized program, other manufacturers committed to sponsor students as well.

The foundation of the degree program is based on the Toyota Way and its 11 fundamental elements: five core manufacturing exercises and six personal behaviors. Core manufacturing concepts include a safety culture, the “5-S” system of efficient workplace organization, “lean” system thinking and problem-solving skills, Leveridge said, emphasizing that any general list is an extreme oversimplification of the educational curriculum KY FAME presents.

For example, safety culture involves much more than obeying workplace safety rules; students learn to think critically about their work environment and identify risks, she said. And the “5-S” efficiency system originates from a Japanese philosophy on organizing and sustaining a productive work environment.

Professional behaviors taught focus on basic workplace skills such as effective team work, communications, taking initiative, developing productive workplace relationships across departments and other dynamic workplace practices, Higdon said.

“I don’t think we can emphasize enough the importance of developing professional skills. The old days of walking in, punching a time clock and standing at one machine are over in the manufacturing sector,” he said.

“There is a perception that workers in manufacturing don’t need skills because the machinery does all the work, but nothing could be further from the truth. It is critical for workers to bring critical thinking and teamwork to the table to ensure that the machinery continues to produce high-quality products in the most cost-efficient manner possible.”

Students in the first cohort who completed the program earned associate degrees in applied science in industrial technology.

The point is to develop employees who actively engage themselves in the progress of their company, Leveridge said. Firms want employees who contribute; they don’t want automatons who only want to perform tasks day-after-day and return home.

The initial program that developed, she said, was delivered, taught and implemented by Toyota within a “college classroom environment,” but with an approach different from the traditional classroom.

Menke described the classroom as a simulated high technology manufacturing environment where core concepts are taught by demonstration and presented with a practical application so that they are a skill set.

This employer-educator partnership evolved in five years into the KY FAME program.

Toyota’s model has been the most influential aspect of the KY FAME partnership, Benton said, but Kentucky has learned a great deal also from its developing relationship with the German Chamber of Commerce.

Germany’s dual system of education and hands-on experience “mirrors the KY FAME model very closely,” he said.

Employer-led academic degrees

Benton and Leveridge both stress that the degree programs developed through the EEP partnership aim to not limit the ambitions of students. The concepts taught “can be a leaping off point for students to transfer into bachelors and masters programs in engineering and business,” said Leveridge.

Most of Kentucky’s state universities are on board with KY FAME’s goals.

“It’s a unique program and a definite change over the way that education is delivered, since it caters directly to the needs of the workplace professional,” Benton said.

Because employers lead the program, educators and real-world managers are collaborating in a more deeply integrated way than ever, Leveridge said, including the monitoring of specific students’ progress.

“If a student can’t report to work for whatever reason, that information is shared with the school,” she said. “Conversely, if a student is having difficulty grasping an academic concept in class, the educator informs the employer.”

The real-world application employers provide for skills being taught in class helps faculty as well as students make the connection between concepts presented in school and what is done in the workplace.

“Education and employer are both invested in the success of the employee-student,” she said.

Meanwhile, participation in KY FAME requires that employers reimburse their student-workers with a fair wage, which they can apply toward their education costs for the program. This reduces participants’ student debt, Benton said. Some finish their degree with no student loan debt.

AMT program arose similarly

Another main element of the KY FAME template was incorporated last December, Leveridge said, when the KCTCS Board of Trustees adopted the Advanced Manufacturing Technician track within the system’s industrial maintenance technology program.

Also developed as a partnership between Toyota and BCTC, the AMT program grew out of a common need among manufacturing firms for employees with the skills to operate, program and maintain the new generation of digital automation technology. AMT student instruction, such as how to program an assembly line robot, takes place uniquely at TMMK’s sprawling Georgetown site where Toyota built a 12,000-s.f. classroom to simulate a modern manufacturing floor.

The 23 firms that participate in what is now the Bluegrass Chapter of KY FAME all have ongoing needs for specialists skilled equally in mechanics and in manipulating computer programming processes.

Terry McMichael, maintenance focus team advisor at 3M Manufacturing in Cynthiana and Bluegrass chapter president of KY FAME, has been involved in the AMT degree program from the beginning. He hired the first sponsored student to complete the five-semester program. Two more 3M-sponsored students are now working toward AMT degrees.

“We have been following the progress our students as they moved through the program, and they are each developing a firm grasp of the skills we need from them,” McMichael said. “We recruited them directly from the high schools in our local community, and I’ve been very pleased with their performance.”

Menke said this program began with training students in industrial maintenance because the skills were an immediate need the partner firms shared.

“The requirements for a multiskilled maintenance professional are fairly uniform across the board,” he said. “But when you look at other firms specializing in tool and die production, that requires a whole new level of skill sets.”

Keeping complex and expensive production machines operational, trouble-shooting breakdowns and repairing them can no longer be accomplished by ordinary mechanics, Leveridge said. Socket wrenches and screwdrivers are still used, but perhaps more important is an understanding of programming processes and problem-solving skills.

The AMT degree program aims to create a pipeline of Kentucky professionals with this specific skill set plus an ability to innovate, especially in identifying and implementing cost-cutting improvements. These kinds of professionals are in high demand, Leveridge said.

It has been exciting to see manufacturers embrace the idea with such enthusiasm, said McMichael. All of the active KY FAME chapters will have AMT degree programs beginning in the fall.

McMichael views the willingness of all these manufacturers to work together as another critical benefit of the KY FAME partnership. The Northern Kentucky chapter could soon have about 75 companies committed to participate.

“All that experience, all that involvement in one place,” Menke said. “Everybody brings something important to the table. Think about what that means to Kentucky’s reputation as a global manufacturing leader. Implementing these shared ideas raises the standard of manufacturing quality in Kentucky and produces a population of professionals other companies want to hire.”

When the Northern Kentucky chapter hosted a KY FAME open house to recruit qualified high school students, firms such as Hahn Automation, L’Oreal, Wagstaff and others set up demonstrations. The technology on display clearly had an impact.

“Parents called in after that asking how they can get their kid into the program,” Leveridge said.

This consequence will be a long-term boon to the retention and growth of existing companies in the commonwealth and to attracting new firms to establish here, Menke said.

Economic Development, Education, Features, Features, One on One, One-On-One, One-on-One, Workforce Development

One-on-One: KCTCS President Jay Box

Jay Box was named president of the Kentucky Community and Technical College System in November 2014. Box, a native of Texas, joined KCTCS in 2002 to serve as president of the Hazard Community and Technical College. In 2007, he moved into the position of KCTCS vice president and in 2009 was named chancellor of KCTCS, where he worked to streamline the transfer process between KCTCS and the state’s public universities, helped revise the dual-credit program, and became the state lead for the Accelerating Opportunity Kentucky initiative to provide the basic skills and technical training needed for Kentucky students to earn credentials that lead to high-wage, high-demand jobs. Box received his associate’s degree from Howard College, a bachelor’s degree in education at Southwest Texas State University, a master’s degree in education from Texas Tech University and a doctorate degree in educational administration with a higher education/community college specialty from Baylor University.

Jay Box was named president of the Kentucky Community and Technical College System in November 2014. Box, a native of Texas, joined KCTCS in 2002 to serve as president of the Hazard Community and Technical College. In 2007, he moved into the position of KCTCS vice president and in 2009 was named chancellor of KCTCS, where he worked to streamline the transfer process between KCTCS and the state’s public universities, helped revise the dual-credit program, and became the state lead for the Accelerating Opportunity Kentucky initiative to provide the basic skills and technical training needed for Kentucky students to earn credentials that lead to high-wage, high-demand jobs. Box received his associate’s degree from Howard College, a bachelor’s degree in education at Southwest Texas State University, a master’s degree in education from Texas Tech University and a doctorate degree in educational administration with a higher education/community college specialty from Baylor University.

Ed Lane: Before being named the second president of the Kentucky Community and Technical College System on Nov. 9, 2014, you served as the KCTCS Chancellor for more than five years. As chancellor you provided systemwide leadership for academic affairs, economic development, workforce training, and research policy and analysis. How important was your prior performance and management experience in being selected as KCTCS’s new president in relation to other criteria established by the selection committee?

Jay Box: My knowledge of the history of how KCTCS had been operating was critical. But even more important, I believe, I presented a future vision to the board of how KCTCS can continue to grow and improve its system for the 21st century.

EL: Since having been appointed president, what significant changes at KCTCS have you made or announced?

JB: I’ve conducted a complete tour of the state, visiting each of our 16 colleges, meeting with over 5,000 people – faculty, staff, students, local boards, foundation boards, community leaders, business and industry leaders, and superintendents.

The point of what we called the “Out of the Box” tour was to listen to what people at the local level believed KCTCS needed to be for the next five to seven years. This is the beginning of our strategic planning process. Of course, I came in as president with ideas, but I wanted to know what the people want. As we develop KCTCS’s new strategic plan, we need to embrace what the state really needs.

EL: KCTCS enrollment increased for several years during the Great Recession (2008-2012), but it has been declining for the past two years as the economy has picked up and unemployment has fallen. How will a decrease in enrollment affect KCTCS’s future plans?

JB: It’s been a double whammy for KCTCS. In 2008, when the recession started, KCTCS saw tremendous enrollment growth. At the same time, the state legislature started cutting KCTCS’s funding. KCTCS has lost a total of $38 million, which is 17 percent of our state funding, since 2008. That’s the recurring dollars, so we have $38 million less to operate with now than we did in 2008. And because of that, and the increase in enrollment, which increased operating costs for three solid years, KCTCS was falling further and further behind.

The Council on Postsecondary Education dictates what the percentage increase of KCTCS’s tuition can be. CPE set a maximum increase that’s averaged about 3 percent over the years. The community college has increased its tuition every year to offset the loss of state funding. But what people really don’t understand is that KCTCS has a minimum of $5 million of fixed cost increases every year – utilities, facilities operations and insurance rates are all going up.

KCTCS had a $38 million reduction in state income, plus an additional $5 million a year in operating cost increases for seven years, which is another $35 million. The tuition increases haven’t enabled KCTCS to break even. Spring 2012 is when KCTCS started seeing a decline in enrollment, and it has declined every semester since. With fewer operating dollars, KCTCS has had to make tough decisions. The system doesn’t have the money to continue all the programming that’s been offered in the past. This next year, we’re looking at reducing KCTCS’s operational budgets by $11 to $15 million. Approximately $11 million of that will be personnel costs. There will be layoffs, but most will come from retirements and positions that KCTCS is just not filling.

EL: Has the number of people attending KCTCS declined primarily because of demographics?

JB: It has. Our enrollment of 18- to 24-year-olds has actually stayed fairly constant since 2008; our growth was almost entirely with the 25-year-old-and-up demographic – the people who were unemployed. KCTCS’s decline in enrollment has been almost entirely in that group as they found employment.

EL: A major requirement in economic development is the availability of an educated workforce to meet employers’ needs. How is KCTCS helping in workforce development?

JB: It’s a two-pronged approach. First, KCTCS provides customized workforce training through our Workforce Solutions Division. Our employees meet with the company and design the training program the company needs to either enhance the skills of their current workforce or to “onboard” new employees. Now, the critical piece that will help that company’s future success is developing a pipeline of new workers, so our Workforce Solutions Division then meets with our academic division and quickly works with faculty and the company to design a curriculum and a program to put students into a pipeline, so they can graduate and go directly into those companies.

EL: Do students like this educational option?

JB: Yes. Several years ago, Toyota and Bluegrass Community Technical College worked together to develop what’s called the Advanced Manufacturing Technician Program, which is now a national model. Students in that program go to school two days a week and then work for Toyota three days a week. Toyota offsets their tuition costs, pays them for the work they do, then guarantees them a job if they successfully complete the program. The curriculum was designed by the faculty at BCTC and Toyota executives to pinpoint the competencies needed in advanced manufacturing. The actual curriculum is delivered by the Bluegrass faculty on-site at Toyota, and then, as their lab experience, the students are in the work environment at Toyota three days a week.

The work-and-learn program is outstanding. It’s the kind of workforce development program that KCTCS believes should be replicated across the state in all the different employment sectors, not just advanced manufacturing.

EL: How enthusiastic are Toyota, Ford, GM and auto suppliers about the Kentucky Federation for Advanced Manufacturing Education, or KY FAME, which uses the general template created by the AMT program to teach industrial workplace job concepts in conjunction with the professional “soft skills” employees need?

JB: Very much so. KCTCS has a representative on the state board of KY FAME (which began in Central Kentucky in 2013). As the state KY FAME group has reached out recently to create chapters in different regions of the state, it has not had any problem getting groups of interested manufacturers together. Skilled workers for manufacturing jobs are a high priority right now.

EL: Is KY FAME a good example of using the free-market enterprise system to get several companies together and to organize a training program without a lot of government intervention?

JB: KCTCS has received numerous calls for information about our program and the Toyota Advanced Manufacturing Training model. It is really exciting. Because of the partnership between the manufacturers and our colleges, and the faculty relationship with the manufacturers, KCTCS can upgrade and deliver the curriculum quickly to meet a company’s specific workforce needs. We think that’s the wave of the future.

EL: Does the fact that an individual company is fulfilling its training needs make the program more powerful because it is designed for a specific business?

JB: Yes. It is also exactly what higher education needs to help drive changes in the educational system. Community colleges are known for being responsive, and KCTCS tries its best to do that. But to have these organizations jump in there and say, we want to help you and we’ll give you the road map and let’s go after it – that is great. They’re sponsoring some of those students. At any time, they can say, OK, our needs are met, we’re going to pull out of this, and then maybe some other manufacturer will step in at that point.

EL: Does the Jefferson Community College have a similar work-and-learn program with Ford Motor Co.?

JB: Yes. And Greater Owensboro just finalized its KY FAME group last week and Lincoln Trail (Elizabethtown and Bardstown) has finished its manufacturing partners list. Both Bowling Green and Somerset are looking at their models. Northern Kentucky and Louisville are the others with new KY FAME chapters. Maysville, Murray, Paducah and Pikeville are assessing. KCTCS has six colleges involved right now and will probably have eight to 10 colleges working with KY FAME as organizations get up and running.

EL: In different parts of the state, manufacturers may have different needs. Would the planning of those programs follow the same formula?

JB: Yes. KY FAME is a statewide organization, and it helps the regional KY FAME design their programs. Most manufacturers are pretty much in agreement with what competencies and skill sets they want, so it’s just a matter of designing the delivery. That can vary according to the region and manufacturers agreeing to pay for a certain number of slots; one manufacturer may say, “I will provide two (student-worker) slots,” and another manufacturer says, “We’ll provide 10.” But normally a cohort in the manufacturing program is around 15-22 students per class. We might start a cohort in the fall, and they will go through an 18-month program, and then another cohort will start, and we’ll rotate those.

EL: How are students recruited for these programs? 

JB: When a program is promoted, there are many more students who are interested than there are slots available. Selecting students is a joint process between the manufacturer and the college, because it is a competitive type of program. The student has to commit to going to school two days a week and working three days a week. So it’s not like a traditional college program where the student goes to class and then is free to do whatever they want outside class. The student is going to be working and realizes they will get the job upon successful completion of the program.

EL: Is there a waiting list to get into these programs?

JB: KY FAME is just getting started around the state, but Bluegrass (chapter) has had a waiting list for its program with Toyota. To offset that, Bluegrass has an industrial maintenance technology program on another campus. Students who don’t get into the Toyota AMT program can enroll in the other program. Most of the applicants are traditional students, 18 to 24 years old.

EL: How is KCTCS’s relationship with the Kentucky Cabinet for Economic Development (KCED)?

JB: It’s been going great for the last two years. Gov. Steve Beshear brought the Economic Cabinet, the Workforce Cabinet and KCTCS together, and said, we need you all to be more unified in your efforts for economic development. KCTCS committed a new position, a vice chancellor of economic development, whose primary focus is to basically work within KCED to know what’s going on in the recruitment or expansion of new businesses around the state. We immediately then bring to the table the workforce training that KCTCS can provide for those companies and make available funding that we call “KCTCS Trains” dollars. Those are dedicated incentives to help offset the training costs for companies when they expand or locate a new business in Kentucky.

EL: What are some of the other training programs KCTCS offers to individuals who are eager to earn higher income by learning new skills?

JB: Sticking on the workforce side, there are five major sectors that KCTCS focuses on that are tied back to the major employment sectors in Kentucky. We’ve already mentioned advanced manufacturing. Then there’s energy, healthcare, logistics and transportation, and business/information technology. Healthcare is, of course, huge, and it’s big at each of our 16 colleges.

KCTCS doesn’t forget that more than half of its students are transfer students, who earn an associate’s degree and then transfer to a state university.

EL: What is the present relationship and level of cooperation between KCTCS and the commonwealth’s public university system? Do KCTCS credits transfer to private colleges?

JB: One of my first accomplishments as chancellor in 2009 was to work with provosts at the University of Kentucky and Western Kentucky University to write a transfer action plan to make credit transfers more seamless. KCTCS worked with state Rep. Carl Rollins and state Sen. Ken Winters to write the transfer bill that was passed in 2010 and makes all KCTCS courses transferable directly into Kentucky public universities. For the private universities, KCTCS has really good transfer agreements with each of them. Private universities are often the first transfer choice for our students.

EL: Eastern Kentucky is working hard to boost the quality and expertise of its workforce so the region can provide well-trained employees for available jobs. How is KCTCS involved with Shaping Our Appalachian Region (SOAR)?

JB: The SOAR initiative is another exciting initiative for our state, to help change the future economy of Eastern Kentucky. The first emphasis is on information technology (IT) fields – in particular, coding. KCTCS has some outstanding IT programs, and we’re quickly ramping up more courses and programs at our five colleges that are involved with SOAR.

But we’re not stopping at just IT fields; we’re also looking at entrepreneurial and business-related type programs. That is also a focus of SOAR.

EL: Do coding jobs pay well because they are technology jobs?

JB: Right now they pay very well; there’s high demand. Jobs will probably be in the $50,000 to $60,000 range. That was the first emphasis: How do you help a coal miner who was making that much money find a new career that can pay a similar amount but does not take years and years of retraining and retooling?

EL: How is KCTCS helping entrepreneurially inspired individuals who want to start their own business?

JB: Right now most of the entrepreneur programs are within our business programs, but we’re looking at expanding that. We’re hoping students will be able to incorporate entrepreneurial courses into other fields, so they can use good business practices in starting up a new company using their talents.

EL: Does KCTCS need funds for any critical capital investments?

JB: In the 2014 legislative session, a bill was passed that allows KCTCS, for the first time, to use (government) Agency Bonds to build one project at each of its 16 colleges. It’s called the BuildSmart Initiative. Seventy-five percent of that funding is from agency bonds, which the state must authorize; KCTCS charges a fee to its students over a period of years to help retire the debt. The other 25 percent of the funding comes from private donations. Three of our colleges are completely through with their fundraising and able to start with their designs. One building is under construction in Paducah, located in the downtown arts district.

EL: Will KCTCS be initiating any other new educational programs soon?

JB: It’s not necessarily new programming; it’s the way KCTCS will deliver its programs. What KY FAME and the AMT program have taught us is that there’s much more need for KCTCS to be working with apprenticeships and internships: work-and-learn programs such as the Toyota-Bluegrass connection, where the coursework is delivered in a timeframe that allows the student also to do an internship or apprenticeship. That gets the student connected to a career early on and helps reinforce what we’re doing in the classroom in a true work environment. That’s the No. 1 thing we’re looking at.

No. 2 is online education. KCTCS has been one of the national leaders and innovators in this area. We’re now finding ourselves needing to upgrade what we’re doing in online education. Even though we’re doing a great job, we feel we need to review because the technology for online learning has improved so much.

EL: KCTCS’s statewide headquarters, where we are doing this interview, is in Versailles, Ky. Are you pleased with the quality of life and work environment in Versailles?

JB: Woodford County has been great for our state headquarters. It’s a great location, 15 minutes from Frankfort, 15 minutes from Lexington, 55 minutes from Louisville. It’s also fairly centrally located for our 16 colleges. As you’ve seen downstairs, we have a wonderful conference center, which allows us to conduct statewide meetings with our college representatives in a nice conference center. Also, our side of the bargain with Woodford County when KCTCS revamped this building was that it would make the conference center available at no cost for community events and organizations. People from all over now use our facility.

EL: Do you have a closing comment?

JB: One of the things I’m most proud of is KCTCS’s recognition across the nation. The National Center for Higher Education Management Systems, an independent organization that does research across the United States, recently studied KCTCS. NCHEMS reviewed KCTCS from 2000 to 2013 to evaluate what a statewide system can do on a national level. KCTCS ranked in the top five in almost every category – for improvement, degrees delivered, enrollment growth and credentials earned. KCTCS’s reputation across the nation is without a doubt one of the best. We’re proud of that, and we don’t want to see it decline. That’s why I say my vision is to “Take us forward.” n

 

Features, Features, Uncategorized, Workforce Development

Economic development: Why the ‘Work Ready’ tag matters

When business and industry site selection consultants come to Kentucky seeking potential locations to launch or expand operations, invariably they ask one question first: Is a skilled workforce available?

But the answer previously would be subjective at best – precisely quantifying a labor force’s skill level was difficult, if not impossible, for Kentucky’s economic development agencies, chambers of commerce and industrial foundations.

Local officials open the Joseph U. Meyer Center for Workforce Development on Madison Avenue in Covington on Nov. 7, 2014, one week before Boone, Campbell and Kenton counties were jointly certified as a Kentucky Work Ready Community. Operating previously at a different location as the Kentucky Career Center, in 2013-14 it made 5,300 outreach contacts to businesses, posted 5,766 jobs for employers, provided career training to more than 500 people, and helped 21,133 job-seekers obtain 12,452 jobs with an average wage increase of $16,929.

Local officials open the Joseph U. Meyer Center for Workforce Development on Madison Avenue in Covington on Nov. 7, 2014, one week before Boone, Campbell and Kenton counties were jointly certified as a Kentucky Work Ready Community. Operating previously at a different location as the Kentucky Career Center, in 2013-14 it made 5,300 outreach contacts to businesses, posted 5,766 jobs for employers, provided career training to more than 500 people, and helped 21,133 job-seekers obtain 12,452 jobs with an average wage increase of $16,929.

Not anymore, though.

A program first developed nearly a decade ago by a college entrance exam company to assess fundamental work skills has gained acceptance among site selectors, and the commonwealth was one of the first to incorporate it into its economic development communications strategy.

Kentucky’s Work Ready Communities initiative, launched in 2012, gives city and county officials a tool to inform potential employers about talent levels and preparedness of local workforces in a nationally recognized and quantifiable way.

Work Ready certification “gives us a lot more validity when we’re talking to site selectors and potential employers,” said Roxann Fry, an economic development consultant with the Tennessee Valley Authority and chair of the state Work Ready Communities panel charged with reviewing community proposals for certification.

“It enables us to say, ‘Yes, we do have a highly skilled workforce with a great work ethic,’” Fry said. “Before, it had been hard to put a number on that; it was more a ‘take my word for it’ kind of thing. But with Work Ready Certification, once we explain what that is and what it measures, it allows us to verify the quality of our workforce, and point to the numbers to prove it.”

A February article at the National Association of Counties’ naco.org news site explained the power the Work Ready brand has achieved.

“It’s a credential that companies consider in their location and expansion decisions,” said Mark Arend, editor of Site Selection magazine. “It’s a quantifiable measure of how many workers there are with skills they may be looking for. States and counties really should be doing this because it separates communities that talk about their skill availability and communities that can actually demonstrate their available skill sets.”

Proving workforce preparedness

Kentucky was the third state nationally to adopt a Work Ready Communities initiative, after Georgia and Oklahoma, said Robert Curry, the program’s executive director. It operates under the umbrella of the Kentucky Workforce Investment Board and the Education and Workforce Development Cabinet, and has been avidly supported by Gov. Steve Beshear.

Daviess, Warren and Woodford counties became the first in the state certified as Work Ready Communities in 2012, and the program has spread quickly since its launch. To date, 17 Kentucky counties have earned Work Ready certification, and 34 more have achieved a Work Ready “Community in Progress” designation – meaning they’ve met much of the certification criteria and have a plan in place to reach all the required benchmarks within three years.

Another 29 counties have filed letters of intent indicating their plans to pursue the process for certification, Curry said.

Taken together, 80 of Kentucky’s 120 counties have committed to participating in the program just three years after its launch.

“Our long-term goal would be to bring this program to as many of the 120 Kentucky counties as possible,” Curry said.

map Work Ready Certified Counties, Mar30 2015
The criteria to achieve Work Ready certification (see list at bottom of the story) are specific and demanding: Six parameters measure area workers’ educational achievement, work preparedness and digital literacy with another gauging overall local commitment to the Work Ready initiative itself.

Kentucky’s parameters are far more stringent than other states’ Work Ready initiatives – an intentional choice on the part of the steering committee that created them, Curry said.

“When the steering committee put this together, we looked at this as an economic development tool. When that site selection consultant says, ‘Tell me about the workforce in this community,’ and we tell him or her that it is a ‘Work Ready Community,’ we wanted that designation to have real meaning,” Curry said. “We can point to specific numbers on educational attainment. We can point to soft skills training and explain NCRC certification and what that entails. And all that has meaning.”

Achieving Work Ready Community certification, or even a Work Ready Community In Progress designation, Curry said, “demonstrates to that county’s current employers that the county is committed to providing a pipeline of qualified workers for the existing business and that they are also committed to providing a qualified workforce for a potential new employer or an expansion at a plant already in their community,” Curry said. “It’s all about the workforce.”

What is the NCRC?

The National Career Readiness Certificate is a test product of ACT Inc. – the same ACT well known for its nationwide college entrance exam. But while the ACT tests for college preparedness, the NCRC tests for job preparedness through what it calls three “WorkKeys assessments.” Questions center on:

  • Applied mathematics
  • Locating information presented graphically
  • Reading for information.

The test’s goal is to offer a measure of a potential employee’s problem solving and critical thinking skills.

Launched in 2006, to date, more than 2.8 million U.S. workers have received National Career Readiness Certificates, according to the NCRC website.

Workers at Ford’s Louisville Assembly Plant assemble the Escape. With more than 1.2 million vehicles produced in 2013, Kentucky ranks third overall in light vehicle production and first per capita.

Workers at Ford’s Louisville Assembly Plant assemble the Escape. With more than 1.2 million vehicles produced in 2013, Kentucky ranks third overall in light vehicle production and first per capita.

While many Kentucky communities have begun embracing the Work Ready Communities momentum, for some, achieving the required worker testing participation benchmark for NCRC certification has been the most difficult of the six parameters to meet. That was the case in Elizabethtown/Hardin County, which achieved Work Ready Community certification last November.

That NCRC component is “probably going to be the major stumbling block for most communities, especially the larger ones, because you have to have a fairly decent percentage of your workforce that has the NCRC certificate,” said Rick Games, president of the Elizabethtown-Hardin County Industrial Foundation.

Many counties have looked for ways to incorporate the testing within their adult education centers so attendees can achieve GED and NCRC testing simultaneously. Others have begun initiatives to introduce testing at county vocational-technical schools. Superintendents in some communities, such as in Bardstown/Nelson County, are investigating ways to incorporate the NCRC as a mandatory test for all seniors.

Money can also be an issue in putting enough workers through testing.

In some cases, employers are paying for the exams. In other cases, civic groups are sponsoring funds to cover the cost. The state currently covers the cost to test all students enrolled in area technology centers, Curry said.

Because the NCRC remains a relatively new product outside the specialized site-selection sector, there is still some local and individual uncertainty about what it measures and how it helps to quantify the skill level of an area’s workforce, Fry said.

“The NCRC portion is a little bit hit and miss, since a lot of people don’t know a lot about it yet,” she said. “So there’s a lot of education that has to go on about that piece.”

“The key to the NCRC is that you have to get employers to buy into the program as well, or there’s no real incentive to take the test,” Games said. “In other words, if we can convince one of our area manufacturers to say, ‘If you have an NCRC certificate we will guarantee you an interview,’ then that’s a carrot that will entice a student maybe even to pay for the test themselves.”

Paradigm shift for career paths

Part of the message of the Work Ready Communities initiative is helping students understand that not everyone must earn a four-year college degree to get a job that pays enough to make a good living – a bit of a paradigm shift from the educational message of the past generation or so.

The program focuses a great deal on encouraging counties to find ways to help students emerge from high school ready and prepared to pursue a promising career – even if a four-year college is not in their plans.

“I know that was the message I gave my children, who are grown adults now: ‘You have to get a four-year degree,” said Vicki Steigleder, executive director of the Maysville-Mason County Chamber of Commerce, where the county is a Work Ready In Progress Community. “I’ve come to realize that there are a lot of good jobs out there where that is not the case. Perhaps these are positions that require at least a two-year degree and some type of certification. But we need people in those areas. We need mechanics and plumbers and electricians, and those jobs make excellent salaries,” she said.

“Basically, in the economic development world,” Fry said, “we have a big gap in the workforce right now in these kinds of high-industrial applications.

“We have kids going to college to be teachers and nurses and other professional careers. And we have kids going to technology schools to get that sort of basic, introductory-level knowledge. But what we are lacking is a workforce at that middle-skill level, with higher-level industrial or technical certifications.”

One goal of the Work Ready Communities initiative is to encourage schools to work with students early to introduce them to the types of high-paying career tracks that may not require a bachelor’s degree.

“We have these students who have the intelligence and skill set and technical acumen to go into these positions, but in some cases, they don’t even know these jobs exist,” Fry said.

Workforce development officials know they need to spread knowledge about the options.

“We’ve got to make both parents and students understand that with a two-year advanced manufacturing degree from a community and technical college, you can get a job making $50,000 a year with very good benefits,” Games said. “It’s a bit of a shift from before, when the message was that everyone has to go to a four-year college.”

Pushing awareness into early grades

Steigleder stresses the need to impart this to community members sooner.

“I think one of the things we’ve learned in going through the Work Ready certification process was that (job exposure and career education) needs to start even before high school, even as early as elementary school,” she said. “Even if it’s just in a simplified way – perhaps through a middle-school field trip to a nearby plant – students need to be exposed to these jobs early on. Because if you wait until high school to introduce these career paths, it may be too late. By junior or senior year, students may be on a course track that prevents them from getting the classes they need to prepare for a specific job.”

As a result of their Work Ready certification process, many counties have begun career training initiatives in collaboration with their area school systems, including programs to help introduce resume-building and “soft skills” training to high school students.

Mason County high school students with at least a 98 percent attendance rate and a strong GPA and work ethic can receive letters of recommendation signed by both the superintendent and Chamber of Commerce upon graduation that they can show to potential employers for a leg-up during the interview process, Steigleder said.

“One of the things we realized was that our juniors were applying for jobs, but they weren’t learning resume writing as part of their curriculum until late in the senior year. So our schools are shifting that resume-writing earlier (into high school course work) to help our students be better prepared,” Steigleder said.

Nelson County and Bardstown Independent schools plan to implement a “We Are Ready” certification program beginning in the fall.

“Participating students will earn a seal on their diploma signifying participation in workforce education programming and a strong attendance and GPA record,” said Kim Huston, president of the Nelson County Economic Development Agency. “We feel the seal will help set these graduates apart as an elite candidate to potential employers. It will show that they are ready to work. They’ve been taught, and they know what’s required to be a good employee.”

Building community-wide buy-in

Over and over, Curry hears one unifying message from counties that have participated in the Work Ready program: The process of working toward certification is as valuable as the certification itself.

That’s because the program encourages networking across sectors within the community that don’t otherwise have an occasion to cross paths – like education and industry.

The Work Ready project “allowed me to bring groups and individuals together that otherwise would not have been together in a single room brainstorming ways to be better,” said Huston, who noted that her committee included human resources managers from area industries, representatives from the Lincoln Trail Area Development District, and the county’s two school superintendents.

“For the first time, our educators and business and industry leaders were engaged in a dialogue. The superintendents were hearing firsthand from our industries what the workforce is lacking and what they need for a better-equipped workforce,” Huston said. “You can’t get any more credible proof of a community buy-in than to have that kind of a dialogue beginning.”

Now a Work Ready Community review panel member herself, Steigleder said she finds herself giving the most credence to the Community Commitment benchmark when reviewing applications.

“I go so far as to look at how many major manufacturers there are in a county and then look for what percentage of those have submitted letters of support for the program,” she said. “I look to see who’s at the table, what groups are represented on the minutes for the county’s Work Ready planning meetings. This program is all about team building, bringing everyone together.”

And counties should know that achieving certification is not the end of the process, Curry said.

“Certification is only good for two years. Then you have to come back and reapply, and the committee looks for evidence of continued growth and constant improvement on those benchmark numbers,” he said.

“Work Ready is another important tool in our toolbox when we work to promote our community to potential employers,” said Games.

“I’ve never been so proud as the day I hung our ‘Work Ready’ signs on all the entrances into town,” said Huston. “Work Ready is right at the top of all the accolades we promote here.

In addition to letting people know Bardstown was designated one of the Most Beautiful Small Towns in America, we also tell them we have a strong, qualified workforce. It is critically important.”

Work Ready Community certification criteria

  • High School Graduation Rate: Counties must have a minimum 88 percent high school graduation rate for the 2013-2014 academic year and a plan in place to achieve 98 percent by 2022.
  • National Career Readiness Certification: A plan must be in place to have at least 9 percent of the working-age population take and pass the NCRC test within three years, and 15 percent within five years.
  • Community Commitment: A wide variety of community stakeholders should have committed, central roles in the application process. Local economic development entities are a given. Work Ready efforts also should include elected officials, superintendents, workforce investment boards and area development districts, plus business and industry leaders.
  • Educational Attainment: 25 percent of the local working-age population must have attained at least a least a two-year college degree. A county must have a plan in place to raise that percentage to 32 percent in three years and 39 percent – the U.S. national average – in five years.
  • Soft Skills: The county must have a program or plan in place to help educate its workforce about “soft skills” expertise, including attendance, being on time, developing a strong work ethic, dressing appropriately and communicating well.
  • High-Speed Internet Access: At least 90 percent of housing units in a community must have access to high-speed Internet. With most jobs today requiring some computer skill, it is a measure of digital literacy.

Robin Roenker is a correspondent for The Lane Report. She can be reached at editorial@lanereport.com.

Advanced Manufacturing, Current Issue, Economic Commentary, Economic Development, Education, Fast Lane, Faster Lane, Features, Features, March 2015, One-On-One, One-on-One, Technology, Workforce Development

One-on-One: Kentucky auto manufacturing finds its voice

Tatman 81414-4

Dave Tatman was recently named as the inaugural executive director of the Kentucky Automotive Industry Association. He also serves at Western Kentucky University as associate vice president for advanced manufacturing. Tatman retired after a 34-year career at General Motors, where he most recently served as plant manager for the Corvette Assembly Facility in Bowling Green. During his time at the Bowling Green plant, Tatman led five consecutive model-year launches and oversaw a $131 million investment to upgrade the plant and equipment, adding 350 new jobs, to produce the all-new 2014 Corvette Stingray, which was named as the NA Car of the Year in January 2014. Tatman, who holds a bachelor’s degree in science, industrial and systems engineering from Ohio State University and a master of business administration, corporate policy from Michigan State University, recently co-authored a book on leadership entitled “Building Cathedrals – The Power of Purpose.”

Ed Lane: In April 2014, Gov. Steve Beshear announced the formation of a new entity, the Kentucky Automotive Industry Association (KAIA). The association has a 12-person board of directors and is chaired by Larry Hayes, secretary of the Cabinet for Economic Development. Secretary Hayes in July announced your selection as the executive director. You have been in your new position about eight months. What are your specific duties as executive director of the KAIA?
Dave Tatman: Let’s step back to March 2014, when I retired from Corvette (as manager of GM’s Bowling Green Assembly Plant). I decided to retire because my family and I wanted to stay in Kentucky. I had a terrific 34-year career at General Motors; I loved every minute of it. There are some challenging times, as you well know, but the Corvette plant had been my 13th GM location, and I didn’t want to have a 14th. My wife and daughter and I had fallen in love with Kentucky. I chose to leave General Motors, without a real clear plan for my next career steps. But I had this notion that I wanted to work on a little larger scale. I had enjoyed tremendous success with General Motors, capped off by the incredible launch and success of the new Corvette Stingray.
I was starting to explore some options when I got a phone call from Secretary Hayes. He congratulated me on my GM retirement and then asked what my next steps would be, and I said I wasn’t sure. He said he had an idea. And so that began our conversations, even before the announcement had been made about the (formation of) KAIA. On the first of July, I started full-time as executive director with the association. It was very important to the governor and the KAIA board of directors that the organization be seen and perceived as industry-driven. The KAIA fit perfectly into what I wanted: to work on a larger scale. My charge, at the direction of our board of directors, is to build the KAIA into a common voice for the auto industry in Kentucky. The industry is vital to the economy of the commonwealth, but prior to last summer Kentucky really didn’t have an organization that represented the state’s auto industry.

EL: What are the primary missions of the KAIA?
DT: The KAIA has established four objectives. The first is branding. The auto industry doesn’t have a brand in Kentucky. When the governor goes to speak to the conferences in Germany, they’ll often scratch their heads and say, “Kentucky?” When I talk to groups around the state and the country about Kentucky being the third-largest state in terms of automotive production, they’re like, “Really?” So we need to brand the industry and demonstrate that Kentucky is a great place to operate an automotive business.
The KAIA’s second objective is advocacy – to be a voice for the auto industry. This is actually a very comfortable position for me because I understand the life of my colleagues in the industry throughout Kentucky. The fact is, the pace of the automotive business is such that managers rarely have time to look beyond today or tomorrow. And the issues that we face as an industry in terms of our opportunities for growth and overcoming obstacles to expansion are issues a plant manager doesn’t address because he doesn’t have time. You worry about it, but it never gets to the top of your to-do list. I spent 34 years running operations.
I know how to run a factory. I know I ignored important objectives during that time because they were outside the four walls of my plant. I didn’t have to worry about “that” issue; I was hoping somebody else was doing that. Well, I’m doing that now for the automotive industry. That’s the advocacy piece.
toyotas-crew Our third objective is leadership. Because auto manufacturing lacked a common voice as a Kentucky industry, it never really stood up as an industry and said, here’s our perspective. (It didn’t answer questions about) what does the automotive industry think about this?
The fourth and final objective, and really probably the one I spend the most of my time on, is workforce development. The biggest challenge we face in the automotive industry is having talented workers ready to take the jobs that are becoming available. And so that’s how I spend a lot of my time. I’m in middle and high schools; I’m at colleges and universities; I’m in the community and technical schools, working to ensure that exceptional occupational opportunities of our industry are known.

EL: How big is Kentucky’s automotive industry?
DT: The automotive industry in the state of Kentucky is comprised of about 460 different manufacturing plants, employing almost 90,000 employees. It’s a huge impact. It exports over $5.5 billion worth of automobiles and automotive products every year. In 2014, the state of Kentucky built over 1.2 million light vehicles and passenger cars. When you think about that in the context of things, that puts Kentucky third, behind only Michigan and Ohio. The epicenter of the automotive business is moving south, and Kentucky is right in the heart of that growth area and has the ability to take advantage of its central U.S. location.

EL: Is the KAIA underwriting a state auto industry economic impact study?
DT: The KAIA has partnered with UofL’s Urban Studies Institute to do an economic impact study for the automotive industry in Kentucky. It’s very similar to the study UofL did for the distilling industry – primarily the bourbon industry – that they released last fall. We want to fully understand that (dollar and job) multiplier effect of the auto industry. Is it four, is it nine, is it 12? There are a lot of jobs created for every job created in an auto manufacturing plant. We want to understand the metrics of economic development growth as it compares to neighboring states and to our competition. So we’re going to use that study to conduct nine regional workshops throughout the state in the spring and summer. Eighty of Kentucky’s 120 counties have some form of automotive business in them.

EL: Is the move to the South partly because of right-to-work?
DT: That’s a great question. I expected to talk about right-to-work today. I tend to agree with Gov. Beshear’s position. Right-to-work is very much a sensitive political issue today. We’re seeing the debate going on. About 25 of the 50 states now have some right-to-work legislation. We’re seeing the debate in Wisconsin right now. Michigan and Indiana both chose to go right-to-work recently. It is a tool for economic development. I think it was a very attractive issue for a lot of the European and Asian automakers who have located in the South. But in our state, we find both union and nonunion firms working very effectively.
I’ve got members on both sides of the equation, so I don’t take a firm stance on right-to-work. I say, let’s leave it to the legislature; see what the government decides to do about it. There are potentially companies who won’t consider Kentucky because it is not a right-to-work state, and I suppose – but I don’t know for a fact – the reverse could be true as well, that there are companies who located here because Kentucky does welcome unions. The evidence suggests that Kentucky’s done a tremendous job of attracting businesses in spite of a lack of right-to-work legislation.

Tatman-Vette-textEL: How was your working relationship with unions when you worked for GM?
DT: I worked 34 years in a union environment, and I never found a union official that I couldn’t work with. At the end of the day, we’re just a couple of people trying to make a living for our families. You approach it that way and you don’t say, “You’re wrong and I’m right.” Collaboration is the name of the game, so I’m not overly pro-union or right-to-work. I think both concepts can peacefully coexist, as they have in Kentucky for a long time.

EL: Does the free-market system equalize prices and wages in the auto industry? If you are a manufacturer and nonunion, you have to pay competitive wages to attract quality employees.
DT: Yes, especially in this environment of scarce labor. You know, we’re seeing that happen all the time. Walmart, for heaven’s sake, raised its minimum wage. All the guys at McDonald’s and Burger King are starting to scurry, and we just heard yesterday that Target is raising its wages. It is so interesting that states are having a debate on (raising their) minimum wage. Meanwhile, free market forces have taken over, and employers are starting to respond.

EL: Even though Ford had been manufacturing cars and trucks in Kentucky since 1913, do you think Toyota locating in Kentucky 30 years ago was especially important because it was a catalyst to expand the state’s automotive industry? At the time, the state’s economy was weak and population growth was static because not that many people were inmigrating to Kentucky, and some were outmigrating because they didn’t have jobs.
DT: Certainly Toyota deciding to build its operations in Georgetown was a huge benefit for the state of Kentucky. I congratulate all the leaders who recruited Toyota. Georgetown is now one of Toyota’s largest manufacturing facilities in the world and, of course, Toyota is going to launch the new Lexus there. But moreover, Toyota has exercised terrific corporate citizenry in the time they’ve been here in Kentucky. As Toyota worked to develop infrastructure, it also worked to develop relationships with government and jurisdictional entities, and Toyota has brought other businesses with them.
crossoverThere’s a huge incentive and impetus in the automotive industry to locate supplier plants in proximity to assembly plants. And as we move further in the technology of vehicle assembly, the original equipment manufacturers, or OEMs, do less and less in their plants utilizing their employees and rely more and more on service providers. So that industry is growing as well. Toyota has been here about 30 years; GM has been in Bowling Green about 30 years; Ford has been in Louisville over 100 years. Those OEMs are the foundations upon which Kentucky has built a terrific base of automotive business.

EL: How will the KAIA be funded?
DT: Upon founding the KAIA, each board member was regarded as a founding member. Our board is comprised of the three OEM members, a member from the Kentucky Economic Development Cabinet (Hayes as chairman) and eight other significant suppliers. And each of these firms primed the pump for the KAIA with a founder’s fee. And every member pays annual dues, so as the KAIA grows, dues revenue grows. And we’ll continue to see additional funding from special events and sponsorships to auto-related events that will continue to propagate the organization.

EL: What is your relationship with Western Kentucky University?
DT: At the same time that I was having conversations with the state and the KAIA, I was approached by WKU to talk about how the university could leverage my background, skills and experience to further auto industry relationships with the university. And so I work on a very limited part-time basis for WKU, connecting the dots in the south-central Kentucky region, in WKU’s region of influence, to try and ensure that when industries seek university assistance or partnerships, I can help facilitate that.

EL: Would WKU provide specialized training for people in the automotive industry, or would that be specifically through the Kentucky Community and Technical College System, which created the successful Advanced Manufacturing Technician program?
DT: It could be all of the above. One of the things we’re having a lot of discussion about is that there’s this very significant aluminum business development in south-central Kentucky and up along the Owensboro corridor, and the industry needs materials science and metallurgical engineering. The University of Kentucky is now setting up a terrific program in those areas, but short-term certification training is also needed, so WKU is focusing on that. The relationships that are most leverageable for an educational institution like WKU or UK or the University of Louisville are those collaboratively working with the auto industry on applied research. The auto industry doesn’t have the time, resources or desire to do a lot of research for research’s sake, but universities do, and they’ve got terrifically talented great young minds available. Those kinds of partnerships and industrial relationships have been developing for a long time and continue to develop in a significant way.

F-150EL: One of the highest priority issues for the auto industry is workforce development. What are some of the training programs available for persons who are interested in an auto manufacturing career?
DT: You’ve hit on a really critical issue here in Kentucky. Our situation, in terms of workforce readiness, is quite frankly no different than we see in other auto manufacturing centers around America. I heard all about it in South Carolina (in late February). Toyota and GM have been here about 30 years, which is the duration of a normal automotive career path – 30 or 35 years. Employees are now starting to retire. Job openings are also occurring because the auto business is globally expanding – the North American market is continuing to expand unbelievably – it hasn’t been that long ago 9 million cars a year were built in North America; now the industry is looking at building 18 million cars this year.
So not only is there increased auto sales, but we have a huge attrition of (retiring) employees also going on. The auto industry has a significant crisis on its hands with having people ready for these jobs. So I applaud the efforts of the Kentucky Federation of Advanced Manufacturing Education (KY FAME). KY FAME is spreading statewide out of a program that was started in Georgetown by Toyota and the Bluegrass Community and Technical College. It’s a five-semester cooperative internship educational experience where the student goes to school two days a week full-time – and this is not two or three classes; they go from 8 a.m. to 5 p.m., a full work day – and they work three days a week. And after five semesters, students graduate with a dual-tracked apprenticeship now that allows them to become skilled maintenance technicians.
The skill sets that Kentucky FAME also teaches include problem solving, teamwork, and many other so-called softer side skills. Those are very important in the world that we work in today. I would venture to guess there are very few automotive employees in the state of Kentucky who don’t work in small groups, working on problems that their group faces. So all of those dynamics are in play as well.
There are a number of companies involved in FAME; it’s been around for about 13 years. In a conversation at a KAIA event in October 2014, I was talking with some of our members up in Northern Kentucky, which is a hotbed for some German auto (parts) manufacturers. At this event, we discussed what’s going on in Georgetown at the KCTCS school there, and the idea to start copying and pasting that training program around the state. So now we’ve got this terrific initiative going on with Kentucky FAME: A chapter is now operating in Northern Kentucky at Gateway Community College; in Louisville, Ford has a program at Jefferson Community College; a chapter is planned in Elizabethtown.
Much like Toyota, Ford had been working on this effort for a while, and the domestic big three have had a long history of apprenticeship programs. General Motors had stepped away from them for a long period of time because its auto production was shrinking; GM still had all these employees, so it didn’t have any need to train new employees. Well, now all of a sudden GM is saying, oh my gosh, we need qualified employees. If Ford were to graduate apprenticeships into regular skilled trades type of work, those employees could transfer under the provisions of the Ford UAW international agreement to other Ford plants around the country.

KFAM-EdBdEL: You started your career at GM as a college intern and retired from the company in 2014 as the plant manager of GM’s Corvette plant in Bowling Green. Are you a “poster boy” for a career in advanced manufacturing?
DT: I certainly was blessed with a terrific 34-year career at GM. I actually was selected in my sophomore year of college, in a competitive interview process, to be what was then called a “GM scholar,” where GM paid for my tuition and books and gave me a summer internship my last two years of school. So that set me on the path that said maybe this was a potential career. There was no obligation to go to work for GM when I graduated. I interviewed – it was a very good time to graduate; I had a number of offers – but I found myself comparing the other offers to the job I was going to do at GM. In some respects my career path at GM could be considered a case study. I got my master’s degree at night; I worked all day and went to the University of Michigan at night, and GM paid all my tuition and books for that degree.
That certainly facilitated my learning and knowledge of business systems. And things progressed from there. If one chooses that kind of career today, that’s certainly a typical or potential career path that may require sacrifices. You’d better be prepared for moving your family, working in a number of different locations, and that would usually include some international locations. I worked in three different countries: Canada, the U.S. and Brazil. And I moved my family five times. The four-year degree, starting with a business or engineering degree, and then working your way up, is absolutely a clear career path. But as I said, not everybody is motivated that way. When you look at a trillion-dollar student debt problem in this country, maybe college isn’t the right answer for everybody. Successful is a relative definition. Success could be having a satisfying career in advanced manufacturing that allows you to provide a quality lifestyle for your family.

EL: Since a limited number of the general public has actually been inside an “advanced manufacturing auto plant,” is there a perception about working in an auto plant that does not reflect reality?
DT: Absolutely! That’s a big problem. Not only do auto employers need to convince elementary, middle and high school students of the attractiveness of auto manufacturing jobs, but they’ve got to convince their parents of that as well. The Corvette plant is open to the public for tours every day that it runs cars. There are four public tours a day. In many ways, that was the only impression of GM and of automotive manufacturing that many people would ever get. Now Toyota does tours, and Ford does some limited tours, so there are those opportunities, but it was very important to me that whoever came in the door to see our plant walked away saying that it was a clean plant, well-lit, with workers fairly tasked with the jobs they have to do, that they’re ergonomically sensitive, that all those kinds of things were true.
That’s the manufacturing world we work in today. Now there are some tough jobs in manufacturing; don’t get me wrong. But by and large, the auto industry has elevated the whole scheme of things in manufacturing to where the jobs are good jobs. It will probably take another generation of workers until the perception that manufacturing is ‘dark, dirty and dangerous’ is completely eliminated. Employers expect you to come to work every day, to stay drug-free, to be at work on time, and to work until the end of the shift. But what’s wrong with that? That’s just a good work ethic.

EL: What are the pay ranges (for new trainees to highly experienced workers) in auto manufacturing jobs?
DT: It varies a lot from company to company. Probably the bottom end is around $15 an hour, and the top end can be north of $30, plus overtime. Plus Ford and GM both have, as part of their national agreements with the UAW, a profit-sharing plan that kicks in extra money. It’s a pretty good compensation package with benefits.

EL: Do you have a closing comment?
DT: As I said, I woke up every day and was excited to go to work at GM. I am so blessed to have a second career chapter that is equally exciting and fun for me. For 34 years I was confined to the four walls of a factory; I could hardly leave for lunch, and my life went in 6-second increments. So I’m enjoying very much the opportunity to travel the state, to get into different suppliers and automotive companies, to talk and to learn what really is on people’s minds. A huge amount of the automotive supplier business is done by very small firms. There are also some megaplayers in the supply business, as big as the OEMs, but the reality is that there are a lot of small shops around the state that, prior to the KAIA’s formation, never knew how they could get their voices heard. Well, there’s a way now, and I love being the person to talk to about Kentucky’s auto industry. ■