IW US 2014 Manufacturing a New Image

2014 IW US 500: Manufacturing a New Image with Snap-on

To attract the skilled workforce it needs, American manufacturing needs a rebranding.

The story isn't new.

It isn't surprising.

But it's real.

And it's on the minds of makers.

The skilled workforce shortage in American manufacturing is becoming a steady drumbeat in the ears of its leaders. Across the U.S., finding workers with the right skillset for in-demand positions is a challenge haunting factory floors.

It's the reason 600,000 manufacturing jobs are going unfilled, according to the National Association of Manufacturers.

And, coupled with that, new graduates entering the workforce just aren't interested in careers on the factory floor.

An executive like Harold Boer, president of Rosenbauer America, struggles to find a third of the new employees he needs.

"There just isn't anyone available. We could use just about anyone," Boer says of the 280-person fire fighting vehicle plant he runs in Lyons, SD.

Boer says he'll hire and train just about anyone who has a reliable means of transportation and can read a tape measure.

"So why do people eschew these jobs, these technical careers?" Nick Pinchuk, president and CEO of Snap-on (IW 500/277) (SNA), asked during the IndustryWeek Best Plants Conference in Milwaukee, Wisc.

"The reason is, increasingly, if you listen to the rhetoric about manufacturing and technical degrees, things like welding, machine programming and so on, they're viewed as the consolation prize of our society," he said. "You see, we've lost the respect for the dignity of work."

Yet manufacturing remains the principle value-creating mechanism in the U.S., with every job created in the sector spurring the creation of 1-1/2 more jobs, Pinchuk said.

"I believe the No. 1 reason is we have a heck of a PR problem," he said.

He called upon the leaders in manufacturing to "to characterize these jobs in manufacturing not as the consolation prize but what they’ve always been: a national calling that creates the great society that America is today."

"I say the American worker is not a question. The American worker is the answer," Pinchuk said.

The Snap-on Story

Despite falling six spots on the IW U.S. 500 -- IndustryWeek’s annual list of the largest publicly-held U.S. manufacturers based on revenue – Snap-on's business grew on all of the major financial fronts.

The manufacturer of professional tools reported record-setting net sales in 2013 of more than $3 billion – a 4% increase from the previous year. And the company generated a $350-million profit – a 14%, or $44.2 million, spike from 2012.

Pinchuk attributed the 94-year-old Snap-on's continued success to its focus on serving its target customer base.

"We only sell to professionals. We won't sell to DIY people…We know it's not our market," he said. "When we have a choice between being a low-cost producer and the most functional product, we don’t give a thought about being the low-cost producer. We're not the low-cost producer."

Pinchuk said he plans to grow the company by enhancing Snap-on's franchise network, expanding in the vehicle repair garage, developing more depth in critical industries and building in emerging markets.

To that end, Snap-on in May 2013 acquired Challenger Lifts, a manufacturer of vehicle lifts and accessories for the automotive repair sector, for $38 million.

“Challenger is an important addition to our Repair Systems & Information Group,” Pinchuck said. “The Challenger vehicle lift product line complements and increases Snap-on’s existing undercar equipment offering, broadening our established capabilities in serving vehicle repair facilities."

Snap-on's RCI Group had the strongest gains of the company's business segments, reporting sales gains of 9%, or $23 million, from the previous year.

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