American Built Building of America

The problem reached a critical point in 2006, when Hypertherm projected it would need to add more than 180 new operators during the next three years if it was to have any hope of meeting demand for its product. At the time, the company had a total of 120 operators on its team. This meant the company was faced with having more than double the number of operators in its machine shop; a daunting prospect for any company.

For Hypertherm, which is located in a largely rural area of northern New England, the prospect of finding that many operators was not only daunting, but seemingly impossible. The company could have simply packed up and moved overseas, but its commitment to American manufacturing led it to explore other options.

The solution was to open its own school to train the workers it desperately needed but couldn’t find. The company partnered with the states of New Hampshire and Vermont, along with Vermont HITEC, a nonprofit organization that had successfully run training programs, to develop an immersion-style education program.

The program, in operation for five years now, takes people with a good attitude and aptitude to learn, but not necessarily with machining experience, and turns them into the skilled machinists — in just nine weeks.

This model will need to become the rule, rather than the exception, for any company seriously considering re-shoring their manufacturing operations, as the skills shortage isn’t expected to get better any time soon.

On the contrary, more than half of the companies surveyed in the joint Deloitte/ Manufacturing Institute study believe the aging work force will cause the problem to grow worse over the next two to four years.

The other issue facing all companies is an environment of increased uncertainty and global economic volatility. Europe is grappling with the Euro-zone debt crisis. The U.S. faces its own mounting debt and stubbornly high unemployment rates. China and other emerging markets are trying to maintain growth in the face of weak demand from their traditional export markets.

Combine the shortage in skilled labor with weak confidence about the future and the result is a natural aversion to hiring and, instead, a focus on automation. This is evident by looking at government reports which show twelve straight quarters of increased spending on equipment and software, while private sector hiring remains flat.

What does this mean to U.S. manufacturers? The economics for successful American manufacturing appear to be swinging in the right direction, but a skilled labor shortage and economic uncertainty are clouding the view. It may be that there is no one answer. The strategy for success may vary among manufacturers, with some looking abroad and others choosing to invest their dollars here.

Hypertherm has chosen the latter. Besides its public/ private partnership and investment in job training, the company is investing in its U.S. infrastructure with a new, recently completed 160,000 sq ft manufacturing facility to support the company’s current and future growth, and continues to devote a significant amount of money to research and development.

Editor’s note: “Made in America Again” video courtesy of CNN Inc., “New Hypertherm Manufacturing Plant . . .” video courtesy of Hypertherm.