Storm clouds on the horizon – there is much work to be done…

Automakers today face significant challenges ahead including a diminished lack of skilled trades workers, lower supporting shop capacities, and a lengthy gap without new apprentices.  These issues threaten the ability of OEMs to bring out the increasing number of new models planned over the immediate next few years.  How immediate is this crisis?  The demand and capacity curves cross before the end of this decade.

The recent T3 Manufacturing Summit in Grand Rapids, MI detailed the pressing concerns of the automakers when it comes to launching future new programs.  CAR convened nearly 250 automakers, suppliers, policymakers, educators and workforce development, and other industry stakeholders in a summit designed to raise awareness and facilitate information exchange about this crisis and to find ways to collaboratively pave the way to a successful future for U.S. advanced manufacturing.

Two days of presentations, panel discussions and reviews of data and compiled charts, the seminar wrapped up with a short list of “must-do-now” items.

Dr. Susan Helper, Carlton Professor of Economics, Case Western University, and Former Chief Economist, U.S. Department of Commerce  stated it clearly:

When you look at the cost of training apprentices over the next few years, and add in the cost of low or no productivity while in training, and even include the cost of the programs through the local community colleges, the total comes to less than 60 cents per car. When you compare this to the $250 to $1,200 typically spent  on advertising per new vehicle sold, this problem does not seem insurmountable.”

Here is the short list of immediate actions needed to avert the feared disruption in new program launches:

First –  look at the total demand and capacity on a regular monthly basis.  Today that demand is proprietary to each OEM, and has only been aggregated through assumptions and press releases.  A neutral third party analyst needs to be appointed by the OEMs to collect, publish and distribute both the industry demand as well as the local industry capacity.  The shops can use this published demand to plan the financing of new equipment.

OEMs also need to source some commodity parts to local shops for every program, in order for those shops to attract and train new skilled trades diemakers and machinists.  This needs to be done on a commodity basis, where the local shop builds similar tools on a recurring basis, gaining quality and efficiency as they develop and deploy specialized processes targeted to specific work streams.

The third party analysts also need to collect and publish the expected work standards for the industry.  The T3 summit revealed there are best practices for nearly every phase of the work, and the shops awarded the new work should be expected to follow those best practices, such as the “no touch machined surfaces” noted by Terry Henning, Stamping Engineering Manager at Ford Motor Company.

OEMs need to deploy a buy-off process avoiding the current death spiral of never-ending iterations as they pursue unrealistic machined tolerances applied to flexible metal parts.  The demonstrated process in regular use by Asian competitors shows clearly better performance and highly accurate assembled bodies while focusing on repeatability coupled by a fitting process.

Jim Toeniskoetter, COO of HIROTEC AMERICA noted “there are 200 plus hours of handwork traditionally required by US OEMs that require as little as 10 hours in Japan”. This may be the highest impact item noted, as the diminishing capacity is currently being squandered.

Finally, the apprentice training programs need to be reviewed to include the new processes needed to support the growing demand for highly precise, accurately machined tools.  The overall skill levels required in the numerical controls planning and programming activities are significantly different than traditional die building processes.

Of course, traditional practices and current organizational structures and norms stand in the way of completing these critical tasks.  The comments of Dr. Susan Helper clearly describe the scope of the problem, and the OEMs and shop owners need to take the leap of faith and get this job done.

CAR will release a report with a more comprehensive recap of the complete challenges and opportunities at the World Class Manufacturing session to kick off the CAR Management Briefing Seminars, Monday, July 31 at the Grand Traverse Resort, Traverse City, MI. Learn more here.