What CAT's layoffs say about Wisconsin's skilled worker shortage

So much for Bucyrus International’s alleged shortage of skilled welders.

Last Friday the iconic South Milwaukee firm, now owned by Caterpillar, announced that it was laying off 40% of its hourly workforce, including many highly skilled welders.

For the past four years Tim Sullivan, Bucyrus International’s retired CEO, has criticizedthe Milwaukee Area Technical College (MATC) for not producing enough skilled welders to meet his firm’s production needs. Sullivan even claimed that a shortage of welders in the Milwaukee area forced him to build a plant in Kilglore, Texas.

Sullivan’s complaints were echoed by a chorus of others including the Executive Director of the Metropolitan Milwaukee Association of Commerce, Tim Sheehy, who ominously declared: "We shouldn't fool ourselves that if companies cannot find labor in Milwaukee that they won't look elsewhere. The message for Milwaukee is to fix the workforce or die."

The Milwaukee Journal Sentinel (MJS) has dutifully, almost breathlessly, covered speeches lamenting the skilled labor shortage by area CEOs. Most recently it covered one by Briggs and Stratton’s Todd Teske, despite the fact that Briggs’ employment has plummeted from 11,000 to 500 as it outsourced jobs to Alabama, Georgia and China.

It is likely that Caterpillar's announcement, coming just days before the beginning of contract negotiations, is part of a cynical negotiations strategy. But whether the layoff threat is real or simply hardball bargaining, it demonstrates why Wisconsin manufacturing firms are having difficulty attracting skilled workers.

Wisconsin's skilled workers are tired of being treated as disposable liabilities. After decades of outsourcing and job loss, they seek employment with firms that value their work ethic, skills and commitment. To put it bluntly Wisconsin’s manufacturing CEOs won't get loyalty from Wisconsin’s workers unless the loyalty is reciprocated.

More than a year ago I wrote in In a MJS op ed:”The list of companies that have offshored or outsourced production reads like a who's who of Wisconsin's manufacturing: Briggs & Stratton Corp., A.O. Smith , Rockwell, Badger Meter - and many more.

Milwaukee's working families have had their lives turned upside down by plant closings, downsizings, outsourcings and offshoring. Their experience in manufacturing has meant job loss, declining wages and benefits and economic insecurity.

Take my former student, John. He did everything we ask young workers to do, earning two journeyman cards while working and attending Milwaukee Area Technical College full time. John left Briggs when it began moving jobs to low-wage states and Mexico. But his new employer, Rockwell, began outsourcing to nonunion, low-wage plants even before it eliminated all hourly workers last year. So John started over again at Harley-Davidson. But, a year and a half ago, Harley laid John off.

John's experience is unfortunately not unique. Almost everyone with roots in this community has a father or mother, aunt, cousin or uncle who has experienced the instability that characterizes manufacturing employment.

Nationally, manufacturers shed 2 million jobs during the Great Recession. Wisconsin lost 58,300 manufacturing jobs, 11.6% of its total, between December 2007 and June 2009, the official end of the recession. The state continued to lose manufacturing jobs for several months even after the recession ended. By September 2010, Wisconsin had lost 69,800 manufacturing jobs, 14% of its total.

Laid-off manufacturing workers have summed up this experience with their kids, nieces and nephews. As Mario, a nursing student now after being laid off from a foundry after 16 years, told me, "I have a family, and I need a job with security."

His attitude is reinforced by the occupational programs at MATC that are most popular and have waiting lists: culinary arts, automotive, heating and air-conditioning, physical therapy, barber and cosmetology, occupational therapy and nursing.

What do they all have in common? These are jobs that cannot be offshored.

Our working-class students are voting with their feet by choosing careers that provide more secure employment. They'll continue to do so until manufacturers offer the same level of security they find in other occupations or sufficient compensation to justify the insecurity that has characterized manufacturing employment."

Two year colleges are solution to nation's economic woes

We recently learned that Wisconsin had the 42nd worst job creation record in the nation last year. Unemployment and underemployment remain unacceptably high.

At the same time, area employers are facing a skilled labor shortage. They simply cannot find the middle skilled workers they need to grow their businesses.

According to New York Times columnist Joe Nocera investing in two year colleges like MATC is the solution.

He writes: "Community colleges can be our salvation...and approvingly quotes Eduardo Padrón, the President of Miami Dade, the nation's largest two year college, “'Community colleges are the great American invention in terms of education. Their raison d’être has always been to help grease the wheels of social mobility...with the skills gap such a pressing problem — and a high school education so clearly inadequate for the modern economy — the task of teaching those skills is falling to community colleges. There really isn’t another institution as well positioned to play that role.'"       

Unfortunately Nocera says: "Many state governments have ravaged the budgets of their community college systems..." Wisconsin, for example, slashed technical college funding by 30% in its last biennial budget. the largest cut in the Wisconsin Technical College Systems' history.

Nocera concludes: "Given what’s at stake, it would be hard to imagine anything more shortsighted than paring back support for community colleges."

His entire column is linked here.