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The thinning of manufacturing

From meeting production goals to serving customers, significant cost-cutting measures and lack of skilled workers are taking their toll on the food manufacturing industry.

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"We need more welders and less philosophers.” Republican Sen. Marco Rubio’s, statement marked a key moment in the presidential debate and started a discussion about blue-collar jobs in America.

Donald J. Trump continued that discussion by making American manufacturing jobs a central part of his campaign platform, promising to bring back those jobs to America. He now calls on U.S. companies to hire American workers. But some industry insiders argue that there are too many jobs and not enough workers to fill them. 

As a result, the food industry and others are experiencing a “thinning” in manufacturing. According to the PMMI Vision 2020 Report, the “thinning out” of American manufacturing and beyond exerts tremendous pressure on CPGs at a time when consumer demands are growing and more is expected. Other dynamics of “thinning” include consolidation through mergers and acquisitions, significant cost cutting and job reductions, doing more with less, and further cost-cutting measures designed to improve overall profitability and increase shareholder value.

There’s a disconnect

Mike Rowe, former host of Discovery Channel’s “Dirty Jobs” and founder of the mikeroweWORKS Foundation, says there are upwards of 5.6 million jobs unfilled in America, and 75 percent of them do not require a four-year college degree. The problem, he says, is a skills gap. During a May 26 interview on the Fox News Channel with Tucker Carlson, Rowe said: [The American education system] took vocational-technical training out of high schools and told an entire generation that their best hope for success is a four-year degree. Guidance counselors push four-year degrees, and parents want better for their kids. Somewhere in the reptilian part of our brain, we believe that manufacturing jobs are substandard, and that’s dumb. Manufacturing jobs are important jobs, but they are not being celebrated.”

As chair of PMMI’s OpX Leadership Network’s Executive Council, Greg Flickinger has a bird’s eye view of what is occurring within CPG companies. While he is quick to point out that much of what he sees and hears is not necessarily happening within his organization (he is also vice president of manufacturing operations at H-E-B, a privately held supermarket chain based in San Antonio, Texas), Flickinger does admit that there is a thinning in manufacturing, and it is indeed taking its toll, from meeting production schedules to serving customers.

He says a combination of things have led to thinning, notably that the talent pool is drying up as longtime employees retire. When knowledge leaves an organization, maintaining customer-service levels, production schedules and food quality can be at risk. 

And attracting and retaining new hires is easier said than done because there has been a marked de-emphasis of learning a trade in the education system. “High schools no longer offer shop class, and technical schools have fallen out of favor,” Flickinger says. 

As a result, it has become increasingly difficult to find people willing and able to work in manufacturing. And it’s getting harder to find talent for the jobs that require higher technical competency, says Flickinger. 

Manufacturing used to be able to turn to the immigrant community to fill lower-level positions, but that is not necessarily how things will continue, says Gardner Carrick, vice president of strategic initiatives at The Manufacturing Institute. “Today, manufacturing jobs are very good jobs, not low pay or low skill, and do require a skill set in terms of technical knowledge and the ability to speak English,” he says. 

Vince Nasti, vice president of operations at Nation Pizza, a co-manufacturer in Chicago, concurs that attracting and retaining both general labor and a skilled workforce is proving difficult. “People don’t want to perform shift work or work on weekends. There is a different work ethic today,” he says. “As a country, we keep talking about bringing jobs back, but we don’t have workers to fill all these jobs. There’s a disconnect somewhere.”

To increase headcount, margins are shrinking at Nation Pizza. Nasti says that management needs to increase pay and benefits to attract employees.

“Across the board, operations and skilled techs are naming their price,” he states. “There’s a shortage of skilled workers, and companies are starting to poach from each other in competitive markets, which is driving up wages. To attract workers, you have to hike up your wages. If they don’t like the salary, they will walk off because there are other jobs available.”

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