Great Opportunities in a Shrinking Industry Sector

Yesterday it was announced that Fisker Automotive, a company based in Irvine, California, will buy and retool a former GM assembly plant in Wilmington, Delaware, with the goal of manufacturing plug-in hybrid cars. The purchase of the Delaware site will cost about $18 million, and retooling the facility will cost an additional $175 million.

Fisker already makes a luxury electric car, called the Karma, to go on the market next year. Last month, Fisker obtained $529 million in loan guarantees from the government to support the plan to develop and manufacture a plug-in hybrid car to be priced at under $40,000.

It’s no surprise that the loan guarantees came from the Energy Department’s $25 billion Advanced Technologies Vehicle Manufacturing Loan Program, part of the stimulus package. I wrote my new book, 200 Best Jobs for Renewing America, to identify the industry sectors that are likely to become engines of growth for the American economy largely because of encouragement from the government (but also because they are essential in the changing global economy).

One of the six industry sectors that I profile there, together with related occupations, is Advanced Manufacturing. (You’ll also find this industry sector among those highlighted on the Career Voyages site, created by the U.S. Department of Labor.) It’s well known that America has lost thousands of manufacturing jobs, and that this hemorrhaging of jobs began well before the current recession. First we lost manufacturing jobs to the maquiladoras just over the Mexican border; then we lost even more to China and to other distant countries. Therefore, you may wonder how manufacturing can ever regain a place as an important industry sector.

The answer lies in that word “advanced.” Although there is no precise definition of what makes a manufacturing operation “advanced,” it is generally assumed to mean use of the most up-to-date technologies in the manufacturing process, from design through production and distribution. Used intelligently, high tech can bring down costs, improve quality, accelerate the product development schedule, and perform innovative processes, all of which allow a manufacturer to underprice foreign competitors and stay one step ahead of them. Besides the use of technology, another key ingredient that makes a manufacturing operation “advanced” is input from workers, who often are organized into teams and communicate to engineers and managers what works well or poorly in the manufacturing process. This input contributes to quality control, still another ingredient of advanced manufacturing.

Because advanced manufacturing uses a lot of technology, it typically requires a smaller number of workers to produce the same output as old-fashioned manufacturing. In 200 Best Jobs for Renewing America, I point to the example of a wind turbine plant being built on part of the site in Fairless Hills, Pennsylvania, where a U.S. Steel plant used to operate. The manager of the unsold parts of this property is said to be receiving inquiries from many other potential buyers and believes that the site ultimately could generate 4,000 new jobs. But consider that U.S. Steel once employed 10,000 workers at the site.

Something similar is expected to happen at the Delaware site where Fisker will manufacture plug-in hybrids. The retooled auto plant is expected to support a peak of 2,000 jobs (in addition to 3,000 vendor and supplier jobs), but consider that the GM plant, which opened in 1947, employed more than 5,000 factory workers at its peak.

Because advanced manufacturing employs a comparatively small workforce, the figures for projected job growth and job openings in this industry sector are modest compared to those for other sectors. In fact, for some occupations the job-growth figures are negative.

But this smaller workforce doesn’t mean that advanced manufacturing is a bad career choice. Advanced manufacturing requires advanced workers--that is, highly skilled workers--and there will be many opportunities for those who bring technology and teamwork skills to the job market. In fact, the opportunities exist already. A recent survey by the National Association of Manufacturers and the Manufacturing Institute found that 81% of American manufacturers said their biggest problem was finding qualified workers; 13 percent reported severe shortages. An article in The New York Times described how one manufacturer took 18 months, starting with the beginning of this recession, bring on board 80 experienced welders with the skills required to weld pipes for an oil refinery.

The fact that manufacturing jobs have sometimes been perceived as having low status may also mean less competition for job openings.

The lesson to take away is that job-growth figures don’t always tell the whole story about job opportunities. Keep that in mind when you peruse the new job-growth projections that will be released in mid-December.

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