Maintenance Mindset: Life after manufacturing — The fate of Janesville in a post GM world
Welcome to Maintenance Mindset, our editors’ takes on things going on in the worlds of manufacturing and asset management that deserve some extra attention. This will appear regularly in the Member’s Only section of the site.
Skills gap, shipyard consolidation dovetail into crisis for U.S. Navy readiness
The ongoing technical labor shortage is back on my radar this week in a new way. But this time, instead of being focused on industrial maintenance, attention is being called to the ways that the labor shortage is impacting U.S. naval military readiness.
The story took center stage this week in the Washington Post, with a report titled “The US Navy's warship production is in its worst state in 25 years” that outlines the way that recent skilled worker retirements have dovetailed with a longer-term trend of shipyard consolidations. The result is a situation where the state of Navy shipbuilding is the worst in a quarter century. As quoted in the story, Eric Labs, a longtime naval analyst at the Congressional Budget Office, said “I feel alarmed … I don’t see a fast, easy way to get out of this problem. It’s taken us a long time to get into it.”
The situation started decades ago with a slow process of Navy shipyard consolidation, where 14 defense-related shipyards have been shuttered since the 1970s with just one new shipyard opening up, leaving only four operational government-owned shipyards. Meanwhile, skilled-worker retirements in recent years have resulted in the U.S. Navy being able to meet repair deadlines only 41 percent of the time. At least one roundtable has been convened at the federal level to address these issues.
Things are so extreme, in fact, that former White House Chief of Staff Rahm Emanuel wrote an op-ed defining the situation as “an atrophied American fleet and a broken naval industrial base.” Emanuel, currently the U.S. ambassador to Japan, argues that solving the problem starts with U.S. ships being overhauled where they sail, advocating for “our allies in the Pacific to be full partners in repairing and maintaining our fleet,” specifically Japan and South Korea. “Every day spent repairing and maintaining ships in our allies’ shipyards means an extra day spent constructing next-generation warships in American yards.”
Adding stress to the situation is an inefficient design process for Navy ships. In one particularly vivid example, the cost-reduction strategy for new Navy frigates being built at Marinette Marine was to choose a ship design already in use by other navies. Under this plan, 15% of the design would be updated to meet U.S. Navy specifications and leaving the other 85% unchanged. However, the Navy ended up redesigning 85% of the ship. The final design still isn’t completed, and delivery is three years behind schedule.
Things are looking up on the skills development side, with the Post article profiling two recent grads from Northeast Wisconsin Technical College who now work at Marinette Marine as welders, and highlighting the partnership between a community college in Maine and Portsmouth Naval Shipyard to teach workers the skills needed to repair nuclear submarines. But money talk too: the article also mentioned that in Wisconsin, part of $100 million in Navy funding that’s being provided to Marinette Marine is being used for $10,000 retention bonuses at the shipyard.
– Thomas Wilk
Imagine there’s no manufacturing; unfortunately, it’s easy for Janesville, WI
I recently listened to an interesting podcast about manufacturing from the Financial Times, called The Economics Show with Soumaya Keynes. The episode was titled “What happens when manufacturing goes away? With Amy Goldstein,” a visiting fellow in Economics Studies at the Brookings Institution, who also spent decades as a report for The Washington Post. The journalist talked about her experiences writing about the closing of the General Motors plant in Janesville, Wisconsin, in 2008. She also recently returned to Janesville to write a follow up essay, which was published in FT. Amy Goldstein’s book Janesville: An American Story won the Financial Times and McKinsey Book of the Year in 2017.
Janesville, a city of about 65,000 people in Southern Wisconsin, is about 100 miles northwest of Chicago. It was not only home to the GM plant, originally the Parker Pen Company, then a farm implements factory before GM bought it to make Chevrolets just after World War I, the plant was the city’s identity. Two days before Christmas in 2008, at the height of the global financial crisis, the plant shut down.
Going back years later, Goldstein says, in many ways the area has recovered by standard economic data measures. Unemployment is around 3.5%, and the labor force participation rate (the proportion of people who want to be working are working or looking for work) was very healthy, Goldstein says. But that recovery, or gutting reinvention, drastically changed the community and the workforce.
One GM plant worker became a "GM gypsy," which means he took another job at a plant in Indiana. He and a group of other former Janesville-plant workers drive to Indiana early Monday morning. They stay in an apartment during the week and drive home Friday night to be with their families for the weekend.
Some workers retrained for different careers. The question of job retraining was one Goldstein looked at in depth, and in the case of Janesville it wasn’t all that helpful. “Talking with lots of people, both in this community and people who think about things like this for a living, I came to think that job retraining can be helpful, but it really depends on the context. If you’re in a place or a time when jobs aren’t coming back, retraining isn’t necessarily going to be the route to new work,” Goldstein says.
Manufacturing has not returned to Janesville, and its economic growth was largely replaced by service jobs—a growing trend throughout the U.S.— and overall, people were not earning as much as they were at the GM plant. What’s in Janesville now? Among other businesses, a Dollar General distribution store that employs 500 people.
She touched some on the “psychic role of manufacturing” in the Midwest. Janesville is an example of that manufacturing identity disappearing. A big part of the city’s identity was also the union, which not only supported workers but connected the community. That Midwestern manufacturing community is disappearing too, as a lot of manufacturing moves south to less union-friendly terrain, Goldstein says, “so it’s easier to not pay workers quite as much and not offer them as good benefits.” Jobs did come back to Janesville, but they’re not paying as much as the good ‘ole GM days.
“I think one of the things I learned is that falling out of the middle class is very different than having been poor all along,” Goldstein says.
– Anna Townshend
What We’re Reading: Case study details how better data led one manufacturer to embrace continuous improvement
My job requires me to do a lot of reading. Whether it’s technical how-to articles, in-depth industry reports, breaking manufacturing news, or insightful opinion pieces, I spend a considerable amount of my day researching and investigating everything the industry has to offer. Unfortunately, this practice is unsustainable for most manufacturing professionals. Trying to keep pace with an ever-evolving industry can be exhausting, especially if you have a plant to run. Luckily, Plant Services has your back. In our What We’re Reading feature, we hand pick articles and editorials that will provide you with the tools, tricks, and best practices you need to make your plant more reliable.
Today’s recommendation is “Come for the Digitized Maintenance, Stay for Better Leadership,” from IndustryWeek, a sister publication at Endeavor Business Media. The article, written by Dennis Scimeca, details how Hexpol Compounding America (HCA), a rubber compounding manufacturer, utilized CMMS data to create a new, company-wide total preventative maintenance (TPM) program. Dennis spoke with John Sedgwick, director of engineering and maintenance at HCA, to learn how the company went from unexplained downtime to continuous improvement.
Below is an excerpt from the article.
Prior to installation of the CMMS, each of HCA’s plants managed downtime on their own, on the operational side, says Sedgwick. Downtime was designated as “caused by maintenance process issues” or “raw materials not showing up,” to cite two examples. The reports didn’t provide the clarity HCA needed to validate what caused the downtime.
“When you give it to one person to dictate where all the downtime’s coming from, sometimes the data can be biased. We prefer to be able to, if anything, compare what the CMMS is saying versus what production’s reporting to see if they’re at least within the same magnitude,” says Sedgwick.
Capex for software was minimal, Sedgwick says, mostly a licensing fee for each plant using the CMMS. Cloud-based data storage necessitated no additional on-prem IT infrastructure. The appreciable costs came on the labor side, with two time employees spending a third of their time onboarding the 14 sites, validating each plant’s data for upload to the CMMS.
It took around a year to get the original 14 sites online and six months to onboard two additional plants acquired in 2020. Now, HCA had accurate data on downtime and proactive versus corrective work order ratios, but Sedgwick eventually realized he still wasn’t getting the reliability data he wanted.
Read the article to learn more
– Alexis Gajewski
