New vehicle materials and demographic shifts require new skills
Over the past decade, governments in North and South America, Europe, and Asia have enacted stricter fuel economy and emissions requirements.
To comply with these regulations, the automotive industry has focused research and development efforts on improving the efficiency of the internal combustion engine, implementing new powertrain technologies, lowering the costs of vehicle electrification, and reducing vehicle mass—also known as light weighting. Mass reduction is complementary to all other efficiency efforts; simply stated, lower weights require less energy to move. Estimates of the efficiency gains from mass reduction vary, but frequently state that a 10% reduction in vehicle mass, when coupled with powertrain downsizing, improves the fuel economy of a gasoline vehicle by 6–7% (Ricardo-AEA, 2015).
Overall, the average weight of a new light vehicle in the United States rose steadily from model year 1982 through 2011. From 2011 through 2016, the average weight fell 3.4%. Consumer and regulatory demands affect the overall average vehicle weight—with comfort and convenience features comprising a larger and larger share of total vehicle weight over time. (Zoepf, 2010)
The trend toward greater use of lightweight materials means that automakers are increasingly relying on novel materials and a greater mix of materials in each vehicle, and these material changes have the potential to affect the work of skilled trades workers and technicians who are employed by firms in the automotive tool, die & mold industries. The Center for Automotive Research, with support from the Arconic Foundation, conducted a study to determine the impact of new materials on new skills for skilled trades workers. This research focused primarily on tool & die workers, and involved data analysis using primary and secondary sources, literature review, and interviews with key stakeholders at automakers, suppliers, tool & die shops, equipment vendors, and educational institutions.
Designing, analyzing, and building automotive tools, dies, molds, jigs, and fixtures to form and join the wide array of new and advanced materials that are being incorporated in current and future vehicle models may change skill needs not only for incumbent workers, but also for the future workforce. Much of incumbent worker training on forming new materials and using new processes is being conducted by automakers, suppliers, and equipment vendors, and may take time before being incorporated in curricula for new skilled trades apprentices.
There are three main challenges facing automotive tool & die producers—both at the large automakers and suppliers, and at small shops:
- new materials and new processes,
- an aging workforce, and
- implications of trade and purchasing decisions on training opportunities for apprenticeships.
Challenge 1: New Materials and New Processes
Key industry stakeholders and lightweighting subject matter experts interviewed by CAR researchers broadly supported the hypothesis that new materials and processes are driving skills changes for tool & die and other skilled trades workers. While there are many constants—such as the industry still requiring skilled trades workers who have a lifelong learning commitment, machining knowledge, and mathematical ability—some specialized skills for tool & die workers in the motor vehicle and parts industries are in particularly high demand. In terms of more general or “baseline” skill demand for motor vehicle and parts tool & die workers, troubleshooting, communication, and computer skills top the list of high-demand skills.
Challenge 2: An Aging Workforce
Turnover and retirement trends affect all trades occupations, but tool & die trades pose a unique challenge for the future. The automotive industry is on the verge of running out of skilled tool & die makers who can make tools work in tryout and production. At some firms, up to three-quarters of current tool & die workers will be eligible to retire in the next five to seven years. A common refrain in CAR’s interviews with tool & die leaders was, “All the good toolmakers are old.” One company executive who was interviewed for this research noted that nearly 80% of his company’s current tool & die workforce could retire today. Indeed, the average age of tool & die workers across all industries skews older than the production workforce—with over two-fifths of all tool & die workers over the age of 55.
It can take 10 or more years to produce a master tool & die maker, and few apprentices were put on employment rolls during the early years of the automotive recovery in 2009–2011. Without sufficient lead-time, the only replacements for retiring tool & die makers is to work the incumbent workers more hours or to hire experienced tool & die makers away from suppliers and competitors. Over time, the practice of hiring from suppliers and customers should drive up average wages in this occupation if labor supply remains relatively constant. One respondent characterized it this way, “we’re in a crisis, and people don’t realize it yet.”
Challenge 3: Implications of Trade and Purchasing Decisions on Apprenticeships
An unexpected finding in this research was that automakers’ and suppliers’ purchasing decisions are playing a role in eroding opportunities for skilled trades talent development. Since the early 2000s, there has been consistent pressure for automotive tooling firms to build tools, dies, and molds at “China price.”
Few firms could meet these lower prices and continue to produce a large portion of their tooling in the United States, so the tool build phase has been largely offshored to China and other low-cost-labor countries. One respondent mentioned that there are times when a tool built offshore “is cheaper than just buying the components in the United States.”
With very little “build” work on which to train new apprentices, it is difficult to train new tool & die workers on how to support and repair the foreign-built tools in production.
Between June 2009 and January 2017, US motor vehicle and parts employment grew by over 56%. While the rate of employment growth is starting to slow, automakers and suppliers continue to hire at a brisk pace due to both increased hires and separations in the industry and an uptick in retirement attrition rates. When an industry is doing well, it is common to see more employees leaving their jobs in pursuit of better opportunities within the industry, so it is not surprising there appears to be more churn recently in the automotive and parts industries. While churn and retirement attrition pose challenges for hiring both salaried and hourly workers, there’s one particular occupational group where the challenges are particularly acute: automotive skilled trades.
The coming crisis in skilled trades—particularly in tool & die—is only going to get worse. Over the next few years, automakers are expected to ramp up the number of all new and refreshed models they are producing for the US market. The steady cadence of new vehicle introductions and model refreshes—combined with the introduction of new materials, new processes, and new technologies—will put additional demands on the tool & die sector. The industry’s ability to execute these critical product launches on time is at significant risk because the ability of the manufacturing and tooling sectors to respond is hindered by current capacity constraints and a significant shortage of skilled talent.
The industry needs to attract young people to careers in the trades and support training for smaller firms that are struggling to retain their workforce in this competitive employment market.
Policies to support human capital investments and make training and education more affordable are critical to solving these issues, as is the creation of robust industry-education partnerships to support cooperative employment, career learning in secondary schools, Science, Technology, Engineering and Math (STEM) activities in K–12 education, and increased support for apprenticeships.