Call it a "Tale of Two Studies." The first fires up the imagination over the potential for furniture manufacturing to return to U.S. soil in a big way, while the second throws cold water on that very notion.
On the sunny side, the new study by The Boston Consulting Group (BCG), "Made in America, Again: Why Manufacturing Will Return to the U.S.," identifies furniture as one of seven manufacturing industries poised to make a serious comeback over the next five years. The main driving force? According to the researchers, Chinese wages rising at 15 to 20 percent per year combined with the escalating appreciation of the yuan vs. the dollar will shrink "the once-enormous labor-cost gap between Chinese coastal provinces and certain lower-cost U.S. states" to less than 40 percent by around 2015.
“A surprising amount of work that rushed to China over the past decade could soon start to come back and the economic impact could be significant,” said Harold Sirkin, a BCG senior partner and lead author of the analysis. “We’re on record predicting a U.S. manufacturing renaissance starting by around 2015."
In addition to furniture, BCG's study predicts the return of domestic manufacturing for transportation vehicles and parts; electrical equipment, including household appliances; plastics and rubber products; machinery; fabricated metal products; and computers/electronics. The BCG study places the added total annual output of these seven sectors at $100 billion. This manufacturing resurgence would also translate into the creation of 2 million to 3 million new jobs, BCG says.
Justin Rose, BCG principal and a coauthor of the analysis, observed, “America’s experience in these tipping-point sectors and its much larger pool of skilled workers, as well as logistical and security concerns, will make the U.S. a better option for many companies.”
Skilled Worker Shortage?
With apologies to Rose, the authors of "Boiling Point? The Skills Gap in U.S. Manufacturing," would likely question where these seven industries are going to find sufficient qualified help to fully take advantage of these emerging opportunities.
The study conducted by Deloitte LLP on behalf of The Manufacturing Institute concludes that despite near historic levels of unemployment, manufacturing companies are currently unable to find candidates with the right stuff to fill as many as 600,000 skilled positions.
“The survey shows that 67 percent of manufacturers have a moderate to severe shortage of available, qualified workers,” said Craig Giffi, vice chairman and consumer & industrial products industry leader, Deloitte LLP. “Moreover, 56 percent anticipate the shortage to increase in the next three to five years.”
Emily DeRocco, president of the Manufacturing Institute, adds, “These unfilled jobs are mainly in the skilled production category – positions such as machinists, operators, craft workers, distributors and technicians. Unfortunately, these jobs require the most training and are traditionally among the hardest manufacturing jobs to find existing talent to fill.”
Talk about a fly in the ointment!
Before the U.S. woodworking industry sank into the murky depths of the Great Recession, the number one conversation of concern evolved around the struggle to find good help. Assuming BCG is right, and a U.S. manufacturing revitalization takes place, the woodworking industry strands to be the biggest loser as opportunities for seasoned CNC operators and programmers open up at potentially higher paying jobs at automotive, electronics and other non-wood plants seeking to seize the moment.
What to Do?
For more than 25 years i have watched the U.S. wood products industry struggle to develop a program that can help it recruit and retain workers with the right attitude and aptitude. Remember the ill-fated Institute for Woodworking Education that came and went in the late 1980s? Without sufficient industry support, the seriously underfunded WoodLINKS USA program, which aims to show high school and college kids that there are viable careers in woodworking, could meet the same fate.
The most recent effort to help build an infrastructure for supporting an ongoing skilled industry work force is the skill standards and credentials program developed by the Woodwork Career Alliance of North America. The WCA has crafted skill standards for more than 50 machine operations with a goal of adding 50 more.
In addition, the WCA officially launched its Woodwork Passport credentials program at the 2010 International Woodworking Fair. The passport is designed to provide woodworkers with a "portable, personal and permanent record of their achievements as a professional."
Will these efforts be effective? Not without the greater involvement of a highly fragmented wood products industry.
If you are the owner or manager of one of the many companies I have heard gripe about the difficulty of finding good employees, I encourage you to learn more about WoodLINKS and the WCA. If these programs are not delivering the type of help you need to build and maintain a successful workforce both for now and the future, then now is the time to communicate what those needs are.
Let's not wait to try to rebuild the wood products industry after it has completely fallen apart.
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