Posted on March 29th, 2017

ByNoah Smith. 
Originally published 3/28/17 for Bloomberg

Discussions about manufacturing tend to get very contentious. Many economists and commentators believe that there’s nothing inherently special about making things and that efforts to restore U.S. manufacturing to its former glory reek of industrial policy, protectionism, mercantilism and antiquated thinking. 

But in their eagerness to guard against the return of these ideas, manufacturing’s detractors often overstate their case. Manufacturing is in bigger trouble than the conventional wisdom would have you believe.

One common assertion is that while manufacturing jobs have declined, output has actually risen. But this piece of conventional wisdom is now outdated. U.S. manufacturing output is almost exactly the same as it was just before the financial crisis of 2008:

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by Claire Bushey on March 8th, 2017

A new company wants to play matchmaker between skilled manufacturing workers and the businesses seeking to hire them—just not full time.

At FactoryFix, employers can browse profiles for engineers, machinists, maintenance technicians, welders and others, then contact likely candidates. Founder and CEO Patrick O'Rahilly, noting that workers are vetted before joining the company's network, jokes it's "like a dating website if you only let beautiful people in." What it resembles more, though, is websites like 99designs, Upwork or TaskRabbit that serve as intermediaries for hiring help, whether a creative professional or a handyman.

The fledgling Chicago company exists at the intersection of two seemingly opposite trends in manufacturing: the casualization of the workforce and employers' struggle to find skilled help. Nearly 10 percent of the sector's workers in 2015 were employed by staffing agencies rather than manufacturers. Yet companies are clamoring to fill vacancies for millwrights, welders and tool-and-die makers. In this tight labor market, "if they're not working (full time), there's something else going on," says Anne Edmunds, regional vice president at Manpower in Chicago.

At FactoryFix, there is something else going on. Some 60 percent of workers in the network already have a full-time job, O'Rahilly says. They use FactoryFix for extra hours. The other 40 percent are a mix of semiretired tradespeople staying active or small engineering shops that use the site for sales leads.ADVERTISINGinRead invented by Teads, 
"There's just not enough of these people, so these companies are going to have to start borrowing from each other," O'Rahilly says. "That's part of the whole gig economy movement. That's part of the future of work."

O'Rahilly, 31, started FactoryFix in 2015. As one of the founders of Elgin-based Compass Automation, which builds custom manufacturing equipment, he informally brokered deals with other companies that wanted to hire his engineers for one-time projects. That convinced him there was a market for the service.

Two former executives at Navistar, a Lisle-based truck and engine maker, have invested in the four-person company, and O'Rahilly raised $150,000 from friends and family. FactoryFix brought in about half a million in revenue last year from a base of 60 customers, including Illinois Tool Works and BWAY, which makes metal cans for paint and food at its Little Village factory.

A robotics engineer fixed a machine at BWAY when it stopped stacking cans on pallets, idling the assembly line, says maintenance manager Harold Whitecotton. The engineer arrived "three hours after we called him, he reset everything, and we were able to get back into production."

Employers pay $100 per hour to hire a robotics or automation engineer or $65 to $75 per hour for a machinist. FactoryFix takes a 30 percent cut. The company notes that by hiring contract workers, the employers save on payroll taxes, liability and unemployment insurance, and the cost of paying wages during production downturns.

The key question contingent labor raises is whether it complements or cannibalizes the existing job market, whether it creates new work opportunities or replaces traditional jobs that offer built-in protections for minimum wage, overtime and unionizing. Researchers from the U.S. Bureau of Labor Statistics have estimated that the share of manufacturing workers employed by a staffing agency rose to 9.7 percent in 2015 from 6.9 percent a decade earlier, with more temporary workers concentrated in low-skilled jobs.

Temporary work can benefit those who have been laid off or who want to supplement their income, says Frank Manzo IV, Countryside-based policy director of the Illinois Economic Policy Institute. Problems only arise "if this temporary work becomes . . . essentially a long-term employment relationship."

The economy as a whole is shifting toward increased use of contingent labor, says Mark Muro, a senior fellow and director of policy at the Metropolitan Policy Program at the Brookings Institution in Washington, D.C. His research suggests that in some industries "freelance marketplaces may well cannibalize competing payroll businesses," like cab companies moving to adopt Uber and Lyft's independent-contractor model. But unlike those companies, he says, FactoryFix appears to solve "an authentic problem because these are increasingly quite specialized occupations. . . . These workers are, in fact, hard to find."

O'Rahilly has had to scour the market himself, recruiting workers to his network through referrals. Retirees, he says, generally aren't scanning "help wanted" ads on Facebook.

Posted on February 8th, 2017

In a new “manufacturing outlook” report focusing on the automotive and industrial sectors, AlixPartners observes that many of the labor-cost advantages associated with near-shoring may be lost if companies fail to spend more on automation in the future.
The consultancy notes that automation capabilities have improved dramatically, and implementation expenses have come down. As a consequence this kind of technology can help manufacturers augment—or entirely replace— functions previously performed entirely by humans.

“To exploit those technologies, manufacturers will 
likely have to make capital-intensive investments,” says Foster Finley, a managing director at AlixPartners in New York. “But they should understand, too, that automation cannot replace a human workforce.”
Instead, adds Finley, automation shifts the focus to a new set of critical skills.

“As automation technology becomes more available and more affordable, companies will have to adopt longer-term views on developing and retaining talent aligned with the tactical use of robotics,” he says.

The survey, which polled manufacturing and distribution companies in the U.S. and Western Europe, finds that 69% of respondents believe near shoring is a possible opportunity to meet demand from consumers, up from 40% in last year’s survey.

“This increase in near shoring has led to labor challenges, however” says Finley. “Many respondents are having a hard time filling roles like product engineers and frontline supervisors.”

Along with these labor issues, two-thirds of respondents said they plan to invest significantly in automation technologies.

“So what we may expect is more spend in human resources with higher salaries and other incentives, at the same time companies will place greater reliance on technology.”

Researchers note that automotive and electronics manufacturers have been the biggest adopters of automation technology thus far. But companies in other sectors—such as pharmaceuticals, instrumentation and measurement devices, medical equipment, and pulp and paper— will likely begin to shift more of their manufacturing capacity to robots in the coming years.

By Patrick Burnson, Executive Editor · February 7, 2017. (

About the AuthorPatrick Burnson, Executive EditorPatrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at

Posted on February 2nd, 2017

The Board of Education further expanded opportunities for Fort Zumwalt students to be college and career ready when they approved the latest version of the High School Career and Educational Planning Guide. Across the district, students grades 8-11 are working with parents and guidance counselors to set schedules for the next school year. The new guide expands Advanced Placement and college credit courses, which include a wide range of options, from chemistry and calculus to world history and language study. It also adds courses that will allow students to earn credit at Ranken Technical College or Cisco certification before graduation.

   The new partnership with Ranken will allow students who successfully complete Fort Zumwalt’s Metals III – Precision Machining or Metals III – Welding and Fabrication to take the appropriate Ranken assessment test. According to the newly approved course description guide, students who pass a written test proctored at Ranken would be eligible to take a hands-on skills test for a fee of $200. If a student successfully passes the skills test, the $200 would then be applied to first semester enrollment in Machining Principles or Fundamentals of Welding Technology, pending enrollment in Advanced Manufacturing Technology or Fabrication and Welding Technology. There would also be a required manufacturing internship through Ranken for students taking Machining Principles.

   "Fort Zumwalt is committed to having students college and/or career ready," says Jen Waters, Assistant Superintendent for Curriculum and Instruction. "Our relationship with Ranken Technical School is a positive step in this direction. Students are able to take relevant course work in high school and are becoming well prepared for both higher ed and the job force. Joining forces with Ranken will allow students to earn credit at a fraction of the cost."
   Similarly, the district has a credit by assessment agreement with Ranken for certification with Cisco, a computer network hardware company that makes switches and routers. New IT Essentials classes would prepare students to take certification tests for a fee. Successful completion of the first class would allow students to take the Comptia A+ Certification test for a fee. A second level class might be added to provide the opportunity to become certified in maintaining and repairing the switches and routers. These professional certifications are the starting point for a career in Information Technology.

   Students in Fort Zumwalt’s Drafting III class also have the opportunity to take the SolidWorks CSWA exam, a professional certification test as their End-of-Course Exam, free of charge. Successful completion shows proficiency in 3D CAD modeling using SolidWorks. The test focuses on the application of design and engineering principles used in industry practices and standards. Students can include certification on resumes and job applications.
    Take a look inside our Engineering and Industrial Technology classrooms here.

Posted on January 24th, 2017

​Manufacturing is a major component of Missouri’s $293.4 billion economy. It represents 13.1 percent ($38.5 billion) of the 2015 Gross State Product (GSP). Nationally, manufacturing contributed 12.2 percent to GDP.

Missouri ranks among the top 20 states for manufacturing employment and capital expenditures. Missouri manufacturers spent $3.3 billion, in 2014, on plant improvements and new construction.

Manufacturing accounts for 11.3 percent of the state’s private sector employment: 261,328 jobs across 6,579 establishments. The industry has added 18,300 jobs since 2010, growing 1.5 percent per year over five years compared to the nation’s 1.4 percent growth rate over the same period. Wages continue to grow, statewide and nationally. Missouri’s 2015 manufacturing payroll totaled $14.7 billion, a $56,368 average wage. This is higher than the state’s $46,000 private sector wage.
​Location Quotient Analysis
Location Quotient (LQ) compares the regional share of an industry to the national share so that an LQ over 1 indicates sectors of employment concentration. Missouri, with an LQ of 1.09, has a greater share of its workers employed in the manufacturing sector than the nation as a whole. About 57 percent or 66 out of Missouri’s 115 counties have an LQ over one, demonstrating a greater specialization in manufacturing compared to the nation.
Economic Contribution
Manufacturing industries make a significant contribution to the Missouri economy, directly and indirectly. Direct contributions come from employment in manufacturing firms and the compensation paid to industry workers. Indirect benefits come from business to business transactions and from workers who spend their earnings on consumer goods and services.

Manufacturing’s contribution to the Missouri economy is measured in terms of jobs created, incomes earned and valueadded. Value-added, a measure of industry sales minus production costs, refers to an industry’s share of Gross State Product (GSP).

Multipliers are a summary statistic indicating the magnitude of an industry’s impact on the economy. For example, a multiplier of 1.9 means that for every $1 in value-added generated by manufacturing, the state’s GSP increases an additional $0.90; similarly, an employment multiplier of 2.8 means that for every job created in manufacturing, nearly two jobs would be created in other industries.
In 2015 Missouri had an estimated 6,579 manufacturing establishments that directly employed
261,328 workers, paid $21.9 billion in wages and salaries, and contributed $38.5 billion to the state’s gross product. The ripple effect was an increase of $36.1 billion in additional economic activity.

Manufacturing’s total impact— direct and indirect effects— on the state economy was $74.6 billion which represents 25.4 percent of Missouri’s gross domestic product. Manufacturing industries and indirect industries employed 735,479 workers paying about $43.8 billion in salaries.