Chicago’s New Direction: Leading the Race to the Top in Global High-Performance Manufacturing (cont.)

Research into manufacturing’s viability

The Council has its origins in a 2001 analysis of the manufacturing workforce development system in Cook County, called “Creating a Manufacturing Career Path System in Cook County.” The study was conducted by the Center for Labor and Community Research (CLCR), of which this author is also executive director, and sponsored by the Chicago Federation of Labor with funding from the U.S. Department of Labor.

Our research uncovered a public education system that was failing to meet both the general education needs of students and the skill needs of the manufacturing sector. The study outlined a 20-year strategic plan that included actions such as the creation of small schools linked to the manufacturing sector; the transformation of our community college system; the creation of a system based on national skill standards in manufacturing, with a broadly recognized method for certification; and the development of career paths.

The questions then were the same as they are now: Is the loss of manufacturing in the U.S. inevitable because of globalization and new technology? Can U.S. companies and communities do anything to stem the loss? And can we further develop manufacturing as a foundation of our economy?

After looking at hundreds of companies in crisis in Chicago and around the country, the CLCR researchers concluded that there is a way for communities to retain the important manufacturing sector. The truth is that most companies didn’t close because of global competition. Some companies folded because they were producing antiquated products; slide rule manufacturers come to mind. In addition, the CLCR investigation showed that many of the larger U.S. companies closed because of business plans that were focused on short-term returns, rather than long-term competitiveness. Publicly held manufacturing companies that could have survived and thrived instead were bought by investors and milked as cash cows. In the 1980s and 1990s, it wasn’t unusual for major companies in Chicago to change hands four or five times in a 10-year period.

Still, 90 percent of manufacturers are privately held companies with fewer than 100 employees, and these employers were struggling to face the challenges of ownership succession, weak management or inadequately trained and educated employees – all in a global environment that was becoming more competitive. Today, we know that these challenges can be successfully addressed through proactive initiatives by business, labor and government, provided everyone is willing to explore new relationships and responsibilities. Overall, the CLCR concluded that 80 percent of the companies lost in Chicago could have been saved.

Getting private industry on board

The Illinois Manufacturers’ Association (IMA), which represents some 4,000 manufacturing companies in Illinois, immediately took interest in the CLCR’s approach as presented in the 2001 report.While some of the IMA member companies are larger firms that have the ability to move around the world in order to solve their workforce challenges, more than 85 percent of IMA members are small, privately held companies with limited resources. These manufacturers are facing a loss of 40 percent of their workforce over the next 10 years

The IMA commissioned the CLCR to conduct a study on Illinois manufacturing and its challenges. The report, “The State of Illinois Manufacturing,” challenged the IMA to form a partnership with labor, government and community groups around a common vision: Illinois leading the race to the top in global, high-performance manufacturing.

The stakeholders recognized that in the global economy, Illinois would continue to lose low-skill jobs to developing countries such as China, Mexico and India.While they wanted to save as many jobs as possible, all agreed that the focus going forward should be on competing in the high valueadded sector of manufacturing and making complex products. Manufacturers in Illinois could create a competitive advantage by making the products that companies can charge the most to produce.

This type of production requires a world-class education system, as well as world-class social, physical and technological infrastructure.Mutual investment and mutual responsibility by both the public and private sectors were needed to achieve this goal. As an important first step, the Council took these ideals and focused on creating a manufacturing-centered high school in the Austin community.

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