Manufacturing Jobs

Evidently, America isn’t in IKEA’s manufacturing future …

Phillip Nones Business, Economics, Employment, Human Resources, Manufacturing , , , , , , ,
Going, going, gone …

Over the past several years, the political mantra has been that jobs are now coming back to the United States – particularly manufacturing ones.

That may well be. But this past week we’ve learned that IKEA plans to close its last remaining U.S. production facility.  The iconic home furnishings company has announced that it will be closing its manufacturing plant in Danville, Virginia by the end of the year.

The Danville plant makes wood-based furniture and furnishings for IKEA’s retail store outlets in the United States and Canada.

The reason for the plant closure, as it turns out, is a bit ironic. According to IKEA, high raw materials costs in North America are triggering the move, because those costs are actually significantly lower in Europe than they are here.  Even accounting for other input costs like labor that are higher in Europe, shifting production to Europe will keep product prices lower for U.S. retailers, IKEA claims.

So much for the notion that imports from Europe are overpriced compared to domestically produced ones!

The Danville plant isn’t even that old, either. Far from being some multi-story inefficient dinosaur left over from a half-century ago, the manufacturing facility opened only in 2008, making it only about a decade old.  At its peak the plant employed around 400 people.

IKEA made staff cuts or around 20% earlier in the year, before following up with this latest announcement that will wipe out 300 more jobs in a community that can scarcely withstand such large economic shocks.

With the closure of Danville, IKEA will still have more than 40 production plants operating around the world. It employs around 20,000 workers in those plants (out of a total workforce of ~160,000, most of which are employed in the company’s vast retail and distribution business activities).

So, it doesn’t appear that IKEA will be exiting the manufacturing sector anytime soon.  It’s just that … those manufacturing activities no longer include the United States.

As a certain well-known U.S. political leader might say, “Sad!”

Are younger Americans turning their backs on manufacturing careers?

Phillip Nones Uncategorized , , , , , , , , , , , , , , , , , , ,

What are the attitudes of young Americans toward pursuing manufacturing as a career? A recent field research project gives us some clues – and the results don’t paint a very pretty picture.

The national survey was sponsored by the Fabricators & Manufacturers Association, International and was administered to ~500 teenage respondents. The poll found that a majority of teenagers (~52%) have little or no interest in a manufacturing career and another 21% are ambivalent, leaving only around one quarter showing any interest at all in considering manufacturing as a career path.

When asked why a career in manufacturing is not attractive to them, the top four reasons cited by respondents were:

 Prefer to have a professional career: 61%
 Prefer a job with better pay: 17%
 Wish to have better career growth than manufacturing would provide: 15%
 Don’t want to do the physical work: 14%

Perhaps we shouldn’t be surprised by these results, because manufacturing has never had quite the cachet of a professional career. But with the number of people graduating from college these days with no meaningful job prospects, it’s a bit ironic that teens still consider the traditional college degree/professional career launch pad as the better way to go.

Indeed, there are a good many misconceptions about “dirty” manufacturing work activities that are completely at odds with the reality. In fact, many manufacturing personnel work with the most advanced, sophisticated equipment and systems that require the kind of high-tech computer skills young people love to apply! And advanced technologies like robotics are to be found in manufacturing more than in any other industry.

Here are several other sobering findings from the FMAI survey:

 Six in ten teens have never toured a factory – or even stepped inside any kind of manufacturing facility – in their life.

 Only about one-quarter of teens have ever enrolled in an industrial arts or shop class.

 ~85% of teens spend two hours or less in any given week “working with their hands” on projects such as models or woodworking (30% spend no time at all on such pursuits during the week).

Here’s a thought: Could kids’ ambivalence about manufacturing be influenced by what’s perceived as “cool” in the career world?

TV programs, when they deal with the working world at all, aggrandize the careers of lawyers, doctors and law enforcement officers … or big business tycoons à la Donald Trump. Many school administrators tend to focus on only one “honorable” education trajectory for students – the traditional university degree.

Certainly in today’s economy, manufacturing jobs are being hammered just as much as employment is in many other industries. But despite the current situation, I think it’s possible more parents would support the idea of their children pursuing a manufacturing career – or a career in trades like welding or electrical – if the pursuit these types of careers received a little more moral support from the wider society.