Originally Posted on Crain’s Detroit

December 07, 2016
By Leslie Green

FTE Automotive USA Inc. in Auburn Hills was dealing with an aging workforce, increased workload, attrition due to the hot job market and difficulty finding successful candidates for mechatronic technician positions. Then, CEO Andreas Thumm suggested the company try using registered apprenticeships to fill jobs.

“At first I was somewhat skeptical,” said Harold Snyder, test lab/facilities manager at FTE. “But based on the quick learning curve and ramp-up of skill sets, I think apprenticeships have tremendously paid off.”

Apprenticeships aren’t new, but they are becoming increasingly necessary. Many skilled workers are nearing retirement and young people often are encouraged to seek white-collar jobs that require a four-year college degree. The result is a shortage of skilled workers in information technology, construction, health care and manufacturing, which is now entrenched in mobility and data collection.

However now, with assistance from the U.S. Department of Labor, apprenticeships in the U.S. are increasing in number and value to employees, employers and communities at large. Employees earn higher wages and gain certified skills, and businesses get reduced employee turnover, high returns on investment and the ability to tailor talent. The result: Communities bolster their skilled workforce and generate more power to compete locally and abroad.

Filling a labor gap

Human Resources Director Gary Sievert said Wellington Industries Corp. of Belleville rekindled its relationship with the DOL apprenticeship program, which is certified by the UAW Local 174, about three years ago. “It’s an employee benefit,” he said. “We only have three apprenticeships right now, but employees know it exists and that we’re going to add three more next year. They know there is another rung to their ladder with apprenticeships.”
Wellington’s tool and die apprentices attend Schoolcraft College, which coordinated meetings between the automotive supplier and the DOL to get the process started. “They made this transition a lot easier. Schoolcraft provides all of the tools.”

Apprenticeships also are filling the labor gap at ZF North America Inc. in Northville, said training manager Sophie Stepke. “We know the commitment of the employee is much bigger because the employee builds a network and sees the organization is investing in them. They build relationships. They see the product and how it works. By the time they are done, they usually have their associate degree.”

The Obama administration has been boosting registered apprenticeships since leadership traveled to Germany, Switzerland and the United Kingdom in 2010 and 2012 and discovered the benefits apprenticeship models in those countries had on the workforce, including low unemployment rates for young professionals, explained Laura Ginsburg, a division chief in the Office of Apprenticeship for the DOL. At the time, there were about 375,000 registered apprenticeships in the U.S.

With more than $265 million in funds boosting apprenticeships nationwide, Ginsburg said there are more than a half million registered apprentices. The goal, she said, is to reach at least 750,000 registered apprenticeships by 2018.

Since ramping up initiatives, the DOL has granted nearly $11 million to apprenticeship programs in Michigan. Of those funds, the Advance Michigan Center for Apprenticeship Innovation (AMCAI) received $4 million. Led by the Workforce Intelligence Network for Southeast Michigan (WIN) and the Southeast Michigan Community Alliance (SEMCA), AMCAI, which will serve about 900 people, is comprised of Oakland, St. Clair County and Washtenaw community colleges; Henry Ford and Schoolcraft colleges; Wayne State University; Oakland and Livingston Michigan Works!; Michigan Department of Military and Veteran’s Affairs and Lightweight Innovations for Tomorrow (LIFT). The State of Michigan received another $2.5 million in 2016 from a federal appropriations bill that expands registered apprenticeship opportunities to veterans, minorities, women, disabled workers and other underrepresented groups.

As a result, the number of active apprentices here increased to 11,775 in 2015 from 8,424 in 2011.

Return on investment

One of the biggest benefits to employers offering apprenticeships is money. Funds for skilled trades training is either paid to the company for the apprentice’s training or goes to the college, said Janene Erne, director of technical programs and apprenticeship at Oakland Community College and chair of Michigan Educator’s Apprenticeship and Training. “But then the company doesn’t have to pay for the training,” she said.
Registered apprenticeships allow companies to “home-grow their own staff, to take an individual with low skills or no skills and put them in a program that’s one to four years and end with a fully productive quality worker that can help that employer make money,” said Ginsburg. “Part of the bargain is employers take that individual on at a reduced salary of about 50 percent to start. The employer is training them; they are getting a paycheck and they are getting instruction.”

She said for every dollar employers spend on registered apprentices, participating businesses average a $1.47 return within the first year. And the average wage after completing an apprenticeship program is $60,000.
The program “is pretty cheap,” said ZF’s Stepke. “Instead of spending money on a recruiter to find a specialist, we find employees early and start developing them young.”

“After ZF graduated its first cohort of students in mechatronics, the managers said to me, ‘These students understand the theory behind their professions. Their colleagues don’t get that for five to 10 years on the job.’ They are a more valuable employee because they have that knowledge already.”

Registered apprenticeship programs allow ZF, which also offers apprenticeships in technical product design and IT, to rotate the student employees in different departments so managers can see their strengths as they go through the program. “We are able to put them in the group that works best for them,” she said.

‘Laying the groundwork’

Patrick Pringle began using registered apprenticeships to make sure BioPro Inc., a small Port Huron-based manufacturer of orthopedic implants and surgical devices, had access to quality employees. BioPro has two apprentices in a machinist program at St. Clair County Community College where they acquire math, machining, manufacturing and welding skills and learn how to program, set up and operate computer numerical control (CNC) equipment.

“The big advantage is you’re getting a higher caliber of an employee,” the president and CEO said. “Typically within their first year, on-the-job training and schooling is starting to pay off.”

FTE’s Snyder said mechatronics jobs are challenging to fill because the skills are broad based and tie in so many different disciplines, including industrial electricity, control systems/PLC systems, PCs, data acquisition/collection software, hydraulics and pneumatics, equipment mechanics and vehicle mechanics.

“We had a group of, on average, eight technicians, but rarely did all of the technicians have all the skills needed. So, you could overload one technician unfairly.”

However, FTE’s first two apprentices were quick learners. “It has been a really positive experience all around. We are laying the groundwork for the next generation of employees at our organization. Within a year in a half they were exceeding skills of people already long-term on the worksite,” Snyder said.

“I think apprenticeships are important to the success of the auto industry and to industry in general.”

 

Visit www.win-semich.org/apprenticeships for more information.

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