April 1, 2012

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Manufacturing

Utah Business Staff

April 1, 2012

What we can do is talk to the legislature about the Custom Fit funds. At all of the tech colleges have Custom Fit dollars available to help you with training your current workforce. We’ve done a lot of that and it’s really invaluable. But we’ve seen that funding cut dramatically over the past several years.

And yes, we need funding into our base budget to help us build our existing programs, but we need that pool of Custom Fit dollars so we can work with companies on an individual basis and develop training programs to meet your individual needs as you’re hiring people.

Certainly in the area of machining, we can run apprenticeship programs in order to meet local needs and we can use our custom fit dollars for that. In industrial automation, we have companies who say, “When we put out a call for engineers, we can find engineers; but to find industrial maintenance techs, we can’t find those people at all.” So they hire some people, and we have ongoing training programs for these industrial maintenance mechanics.

BHASKAR: That’s an interesting thing, because the Utah Technology Council did a survey and there was a shortage of more than 2,000 engineers in the state. But that’s a good thing, because if we can fill those engineering positions, we may need about three techs for every engineer’s position. That means you need to be able to provide 6,000 of your techs.

What is even more valuable is labor costs in China have gone up like 30, 40, 50 percent in the last two years. The yuan has gone up 30 percent. Land costs have gone up, which means all those industries that have been there for marginal value will come back to the United States.

For the last 10 years in our economy, labor rates have been pretty stagnant—maybe 2, 3 percent a year increases. So our labor costs have been holding steady while the rest of the world’s costs are up more than 200 percent in the last 10 years. That’s good for us. And the prices of fuel, of natural gas, have gone down significantly. That’s helping many of our basic industries—forging and metals can go up again.

BOUWHUIS: The interesting thing about Custom Fit is it’s a leverage program. The employer participates, the state participates, and that ratio leverages each other’s dollars. The other key element is the facility. Many times we have facilities to offer customized training. In other cases, the employer’s equipment is so big that the leverage can be through an apprenticeship program or can be training employees on-site.

But the problem is capacity building. We need a massive infusion of funds because customized training is the key mechanism to help employers improve the workforce. It’s for local employers. It’s used by EDCU and the Governor’s Office to attract business, but then we’re the deliverers.

SUCHAN: At Malt-O-Meal, we’ve partnered with the Custom Fit program and we’ve been able to create a career path for our techs. We can certify our techs to a specific level, pay according to that level and then develop a progression plan through the Custom Fit Training plan.

BREMS: You’ve all heard about the Governor’s goal that by the year 2020, 66 percent of Utahns will have a post-secondary certificate or degree. If we could focus just a minute on that concept of a certificate—that’s what we’re charged with doing. By design, we’re asked to stay out of the degree business and the credit business, and we’re to focus on competencies and skills and getting people certified.

So often as parents and as grandparents, we want to say, “You need to get that college degree,” when really what we need to do is help them to see the value of a targeted certificate through a UCAT campus or other institutions of higher education.

We saw this phenomenon in Southern Utah. There was a growing group of manufacturing companies there that needed specific skills. Yet in their company policies, in order to move up in the company, employees had to have a degree. But when we got talking to them, we found they were looking for a set of skills that were more of a certificate in nature, something that they could do in a year or so.

To make it all work, we figured out how to do the certificate first and then we worked on a partnership with Dixie State College so that if they wanted to go on, they could get an associate’s degree or a bachelor’s degree. But really the target was the skills that you need to have them learn, and that needs to be embedded in a certificate.

We believe that as Governor Herbert’s goal is realized, a lot of that 66 percent is going to come from the certificate portion of education that UCAT does.

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