Minnesota factories gear up to replace retiring boomers

September 26, 2014

Kelly Pearson has a problem. The operations director of Toro Co.’s Shakopee plant is trying to find people to replace dozens of retiring machinists.

The plant has 273 workers and, over the last 2½ years, had 28 retire. The retirees had a combined 844 years of experience, which Pearson said won’t be easily replaced.

“We are really struggling,” Pearson said. “Our workforce is all skilled labor. It’s aging, and we are having a difficult time finding replacements.”

The dilemma exists at factories across the state, said Bob Kill, CEO of the Enterprise Minnesota consulting firm. At a manufacturing summit it held earlier in September, a presenter asked the room of factory bosses how many were dealing with retirement and hiring woes. More than three-fourths of them raised hands.

Nationally, the employment base is being reshaped by the retirement of the baby boomers. Labor force participation is now at its lowest level since the late ’70s and is expected to continue falling as the number of retiring baby boomers continues to exceed the number of young people starting to work.

Minnesota’s labor force participation rate actually continues to be among the highest in the nation. And nearby Nebraska, Iowa and South Dakota also continue to have many people at work.

Even so, a recent survey of 400 plant managers by Enterprise Minnesota found that 67 percent said they had trouble filling recently vacated jobs. In greater Minnesota, that number shot to 75 percent. The problem has forced some firms to put off factory expansions, Kill said.

“We are in a similar position as Toro. It’s mostly retirement attrition,” said Carolyn Kammeyer, a recruiter for Minco Products Inc., which employs 650 at a flexible-circuitry products plant in Fridley. “We are not even looking for machinists and we are still having problems [replacing retirees]. People with really solid technical and math skills that can do assembly and engineering, drafting and other technical support [are] just really hard to find.”

Some manufacturers now sponsor area high schools to restore machine-shop classes that disappeared decades ago. Others have opened their plants to young job seekers and their parents so they can see that today’s factories are not the belching, smoky foundries of yesteryear.

Fridley-based E.J. Ajax & Sons, a metal stamping firm, will host visitors from five high schools during October’s National Manufacturing Day. The visits should help students see the high-tech side of manufacturing and spark interest in careers that pay $20 to $30 an hour, co-owner Erick Ajax said.

“We have to get 16- and 17-year-olds into the factory when they are young,” said Mike McGee, dean of Hennepin Technical College. “If we can get them into the plant at 15, 16, 17 and light that spark, we will fill that worker pipeline.”

Two years ago in Plymouth, the Swiss-owned grain and chocolate equipment-maker Bühler Inc. created Bühler Apprenticeship Academy to train high school graduates to build and fix machinery. Today, 15 apprentices work 40 hours a week at Bühler and take manufacturing classes at Dunwoody College that Bühler pays for. After three years, they’re offered a job starting at $18 an hour.

On Thursday, MacKenzie Ritchie, 18, stripped the electrical system out of an 8-foot drill press and reinsulated the wires using a 500-degree dryer. Next door, Matt Schweizer, 21, and Matt Stumm, 22, dismantled the bolts, casings and massive steel rolling pins from a chocolate refining machine the size of a truck. Twelve others filed down steel bases, built mechanical vises or visited equipment customers, all under the close supervision of Daniel Roth and three others.

Bühler human resources manager Ellen Bies said the academy will help fill the hole created when established workers leave. “One of the main reasons to start the apprenticeship was that we could not find the right skills on the market. Being a Swiss company and very familiar with the European apprenticeship concept, we rolled out this program in the USA,” she said. “[Now] we are filling our pipeline with the talent for tomorrow and hope other companies and industries will follow.”

Sen. Terri Bonoff, DFL-Minnetonka, wants to see Bühler’s academy replicated statewide. “You have companies who say they need workers,” she said. “Yet we have a young-person unemployment issue as well.”

In Shakopee, Toro’s solution is multilayered. Plans “need to work together. There is not one magic pill,” Pearson said.

In some areas of her plant, such as the “CNC machining” section that uses computerized equipment to make lawn mower parts, Toro hired middle-aged workers to replace retirees. Those hires “average 50 years of age. So we are basically replacing our retirees with people who will retire in 10 years,” Pearson said.

To find a better solution, Toro’s managers attended multiple career fairs, partnered with four technical colleges and worked with the labor union to form an internship program aimed at younger people wanting to crack into metal forming and parts fabrication. Lastly, they hired several novices but committed to training them to use expensive and highly computerized machines.

“This year, we went all out, so we did better filling positions,” Pearson said. “We still are struggling. [Most new hires] are not 100 percent qualified to what we would like.”