UPDATE 2-U.S. manufacturers to train veterans for factory jobs

Mon Oct 15, 2012 2:24pm EDT

* GE, Alcoa, Boeing, Lockheed Martin support program
    * Aim to launch in 10 U.S. cities in 2013
    * Employers responding to perceived 'skills gap'


    By Nick Zieminski
    NEW YORK, Oct 15 (Reuters) - Four of the largest U.S.
manufacturers on Monday unveiled plans for a new group committed
to train military veterans to work in the manufacturing sector.
    General Electric Co, Alcoa Inc, Boeing Co
 and Lockheed-Martin Corp said they would provide
financial support to the "Get Skills to Work Coalition." It will
initially aim to train 15,000 veterans, who will be hired by the
four companies or matched to other jobs. Open jobs will be
listed on LinkedIn.
    "I look at this as a catalyst," said GE Chief Executive Jeff
Immelt at an event unveiling the group in New York. "We're
looking for other manufacturers to join us."
    The group will be managed by the Manufacturing Institute, an
affiliate of the National Association of Manufacturers trade
group. GE will invest an initial $6 million in the program. 
    The program will get its start in January at Cincinnati
State Technical and Community College in Ohio, near a major GE
Aviation factory, and be rolled out to nine more U.S. cities
over the course of 2013.
    It calls for working with community and technical colleges
to speed up training; translating military skills into
equivalent civilian job functions; helping employers with
recruitment and managing workers; and developing on-the-job
training programs in major cities. 
    Some 600,000 manufacturing jobs in the United States have
gone unfilled because companies cannot find workers with the
appropriate skills to work in high-tech, high-speed modern
factory environments, according to a study by the Manufacturing
Institute and Deloitte.
    That has been a particular frustration for U.S. policymakers
as stubbornly high unemployment has been one of the main
barriers to the nation's economic recovery from a brutal
2007-2009 recession.
    The founding companies collectively employ 64,000 veterans. 
    Besides current unfilled jobs, up to 2.5 million
manufacturing jobs will open up within five years as older
workers retire, GE said. Nearly a million workers in the oil and
gas industry are approaching retirement age. 
    "We can't get enough people to do the work we need to do in
oil and gas," Immelt said. 
            
    BRIDGING A PERCEIVED 'SKILLS GAP'
    Executives from the four companies said they were responding
to a 'skills gap' where employers find too few qualified people.
Many positions require literacy and math skills that few
applicants possess, executives said at a panel in New York. Most
job applicants don't have those skills but veterans learned them
while serving, Alcoa executive Bob Wilt said. 
    "There's a problem with skills," he said.
    Yet some question the severity of a U.S. skills gap, at
least in the short term. 
    "While manufacturers are having some difficulty finding
people, there isn't a major skills gap right now," said Hal
Sirkin, senior partner of the Boston Consulting Group (BCG) and
co-author of a new report on the topic. 
    BCG defines a skills gap as jobs where pay has outpaced
inflation by 3 percentage points for five years running. By that
measure, a few categories -- such as welders and machinists --
show skills shortages, but those are limited to only about 8
percent of the high-skilled manufacturing workforce, which is
itself a small part of total U.S. employment.
    Longer term, as workers retire and too few replacements are
trained, the skills gap will become more pressing, BCG argues.
It says state and federal governments can encourage training
through community colleges and universities. 
    "We're not training enough people," Sirkin said.
    Part of the problem, however, is that employers' high
expectations add to the perception of a skills gap, the BCG
report said. Employers demand skills and experience for
relatively low pay. 
    BCG's report cites a job posting that calls for a college
degree in biology or chemistry, experience in manufacturing,
mixing chemicals, and handling hazardous materials and --
preferably -- knowledge of SAP software. For this level of
competence, the anonymous employer offers $15 to $17 per hour.
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