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The “Big Three” carmakers are being forced to keep laying off workers as the United Auto Workers union continues its strike, according to .

What’s going on: To date since the strike began, General Motors, Ford and Stellantis have had to lay off a total of 4,835 employees.

• “While we are doing what we can to avoid layoffs, we have no choice but to reduce production of parts that would be destined for a plant that is on strike,”��Ford Vice President for Americas Manufacturing and Labor Affairs Bryce Currie said in a statement this week, CBS reports. “Strike-related layoffs are an unfortunate result of the UAW’s strategy.”
• In addition, many auto suppliers have suspended the employment of hundreds of workers because of the strike.

Why it’s important: Economic losses to the auto industry through the first three weeks of the strike totaled approximately $5.5 billion, Michigan-based economic consultancy estimates.

• That figure includes $2.68 billion in lost revenue for the carmakers, $579 million in direct wages for workers, supplier losses of $1.6 billion and dealer and customer losses of $1.26 billion.

The 51�Թ���’s take: “The strike is causing tremendous economic harm throughout the economy,” said 51�Թ��� Vice President of Economic Policy Brandon Farris. “It isn’t just the automakers, but every employee that has been laid off and many of the small and medium manufacturers that supply them.”

• “Many of those manufacturers may never recover,” he continued. “The 51�Թ��� strongly urges a quick resolution. The longer the strike lasts, the harder it will be to undo the drastic economic harm caused to employees and manufacturers.”

Washington, D.C. – The Manufacturing Institute, the workforce development and education affiliate of the 51�Թ���, in partnership with Cognizant, released a that examined the different approaches manufacturers take in making investment decisions.

“As manufacturers continue to evolve, the nature of work and skills must adapt to meet the needs of the changing industry. Manufacturing leaders must prioritize investments to best position their companies in a competitive marketplace and set themselves up for success over the long term,” said 51�Թ��� Chief Economic and Director for the Center of Manufacturing Research Chad Moutray. “Three investment priorities emerged across manufacturer size and industry: increasing throughput and lowering costs where possible, creating new opportunities for growth, and building a stronger, more resilient workforce. Nearly all the companies we interviewed emphasized the importance of investing in their workforce.”

The study consisted of an online survey and in-depth interviews of manufacturing leaders from June to August 2023.

The following are highlights of the report:

• When asked about their top priorities for current dollars, nearly 74% of manufacturers reported building a robust and trained workforce as a key area for investment, which fits in with the larger macroeconomic conditions of the tight labor market and shortage of available workers.
• When business leaders were asked how they would spend a marginal $1��million, 61.5% would invest in new equipment. These findings point toward a desire to make smart investments that will transform operations and the production process, while also ensuring that the workforce can adapt to such changes.
• Additional areas of focus for marginal dollar investment included investing in improved processes and operations (60.2%), optimizing existing equipment (53.4%), investing in new equipment (51.7%), investing in new technologies (46.6%) and research and development (44.9%).
• When considering their future growth strategies, manufacturers identified a stronger domestic economy for growing sales (69.5%), increased efficiencies in the production process (67.8%) and maintaining a robust and trained workforce (67.0%) as the most significant factors in contributing to expansion.

Key Takeaway:

From survey data and interviews, three investment priorities emerged across manufacturer size and industry:

• Increasing throughput and lowering costs where possible
• Creating new opportunities for growth
• Building a stronger, more resilient workforce

-The MI-

The Manufacturing Institute builds a resilient manufacturing workforce prepared for the challenges and opportunities of the future. Through implementing groundbreaking programs, convening industry leaders and conducting innovative research, the MI furthers individual opportunity, community prosperity and a more competitive manufacturing industry. As the 501(c)3 nonprofit workforce development and education affiliate of the 51�Թ���, the MI is a trusted adviser to manufacturers, equipping them with solutions to address the toughest workforce issues.

��733 10th St. NW, Suite 700 • Washington, DC 20001 • (202) 637-3000

As United Auto Workers President Shawn Fain prepares to give an on labor-contract negotiations this afternoon, the UAW’s three-week-old strike at plants across the Midwest is hurting auto suppliers, according to (subscription).

What’s going on: “More than 3,000 supplier employees have been affected so far, a Washington Post tally shows, while an industry association says nearly 30 percent of its supplier members have resorted to layoffs.”

• More than 60% of suppliers said they expected to begin layoffs this month. Others say these cuts could “broaden over time” if the strike continues
• The strike has reverberated beyond the automotive sector, too. U.S. Steel recently announced 300 temporary layoffs after it was forced to idle an Illinois furnace because of the walkouts.

Why it’s important: “The [strike’s] fallout shows the outsize role the auto industry plays in the U.S. economy, to which it contributes about 3 percent of gross domestic product.”

• What’s more, the widespread shuttering of smaller auto suppliers—which number in the thousands and are often the main source of employment in the areas where they operate—would make it harder for General Motors, Ford and Stellantis to resume normal operations after the strike.

Manufacturers say: “The longer the strike, the more likely thousands of citizens across Michigan will face layoffs, and not just UAW members,” John Walsh, president and CEO of the Michigan Manufacturers Association (an 51�Թ��� state partner), wrote in (subscription).

• “Layoffs, in turn, will affect restaurants, stores and local businesses. The economic impact will be felt throughout our families and our communities.”

Permanent restoration of R&D expensing is a top priority for manufacturers in Minnesota and the U.S. in general. That’s why Rep. Pete Stauber (R-MN) plans to sign onto the American Innovation and R&D Competitiveness Act as a cosponsor, he recently told the 51�Թ���.

What’s going on: Rep. Stauber discussed the importance of competitive R&D tax policy, along with the regulatory onslaught targeting manufacturers and the need for permitting reform, during a recent 51�Թ���-organized facility tour of Clow Stamping Co. in Merrifield, Minnesota.

• “Full expensing for R&D costs in the year in which they are incurred is essential for innovation and competition,” Rep. Stauber told the group, which included Pequot Tool & Manufacturing CEO Karlo Goerges in addition to 51�Թ��� representatives and Clow Stamping leadership. “It’s imperative that it be reinstated as soon as possible.”
• The American Innovation and R&D Competitiveness Act would restore immediate R&D expensing permanently for small businesses.
• “Full R&D expensing was instrumental in our growth until the law changed last year,” said Clow Stamping owner Reg Clow. “It’s definitely having an impact on us. Our expenses have gone way up.”

Workforce woes: Clow is nearing the end of a $20 million facility expansion that will add 107,000 square feet of floor space and at least 60 jobs—but finding enough workers to fill those jobs won’t be easy.

• By implementing automation in its shipping and receiving departments, the company will be able to both increase its shipping output without additional workers and channel its current hiring efforts toward filling open positions with the production departments, Clow said.
• This is a short-term solution, however, and manufacturers like Clow Stamping need policymakers’ help to ensure the industry has enough skilled workers for the decades to come.
• During the facility visit, the group discussed the importance of educating younger generations about the many opportunities available in manufacturing, via initiatives like . This award-winning perception campaign undertaken by the 51�Թ��� and its 501(c)3 workforce development and education affiliate, the Manufacturing Institute, aims to recruit 600,000 new manufacturing workers by 2025.

The last word: “Manufacturers account for more than 55% of all private-sector R&D spending in the United States,” said 51�Թ��� Managing Vice President of Policy Chris Netram.

• “Policies that encourage this innovation will allow the industry to continue to drive our economy forward. The 51�Թ��� thanks Rep. Stauber for his support of the American Innovation and R&D Competitiveness Act and calls on Congress to swiftly pass this bill.”

The United Autoworkers union set a new strike deadline late last night, according to .

What’s going on: In a video post on X, “UAW president Shawn Fain said [the union] would unveil more strike targets, with more union members participating, by noon eastern time Friday failing significant progress in talks with Ford, General Motors and Chrysler-owned Stellantis.”

• After negotiations for a new four-year labor contract failed late last Thursday, the UAW—which represents almost 150,000 U.S. autoworkers—ordered a walkout from vehicle plants belonging to the “Big Three” carmakers in Michigan, Missouri and Ohio.
• About 12,700 workers are now picketing assembly lines throughout the Midwest.
• Each of the vehicle manufacturers has put forth offers in recent days, and each has been rejected by the union, the demands of which include a sizable wage raise and a 32-hour workweek at 40-hour-a week pay.

Why it’s important: A 10-day strike of 143,000 UAW members against the three vehicle manufacturers could mean an economic loss of $5.617 billion, according to a recent by Michigan-based consultancy Anderson Economic Group.

• A protracted strike this year would put “the state of Michigan and parts of the Midwest … into a recession,” Anderson Group CEO Patrick Anderson told the news outlet.

Our take:��“ The economic harm produced by a strike goes well beyond GM, Ford and Stellantis,”��said 51�Թ��� Vice President of Domestic Policy Brandon Farris.

• “Numerous small and medium-size manufactures are already feeling the effects. The 51�Թ��� encourages a swift resolution. Let’s get everyone back to work building products that our country relies on.”

The United Auto Workers union went on strike for the first time at all the Detroit “Big Three” carmakers early this morning, according to (subscription).

What’s going on: “UAW officials initiated the walkout after failing to clinch new labor deals with General Motors, Ford Motor and Jeep-maker Stellantis for about 146,000 U.S. factory workers. Bargaining went late into the night, but the two sides remained too far apart to avoid a walkout at the 11:59 p.m. ET deadline.”

• Workers at a Ford Bronco plant in Detroit, a GM pickup-truck factory in Missouri and a Stellantis Jeep plant in Ohio were told to leave their posts.
• The three targeted facilities make some of the firms’ most popular vehicles.��

Why it’s important: Automotive manufacturing in the U.S. is among the most productive industries in the world, underpinning the American economy as a whole.

• In fact, a strike of 143,000 UAW members against GM, Ford and Stellantis could lead to an economic loss of $5.617 billion after just 10 full days, according to a recent by Anderson Economic Group.
• In 2019, a 42-day strike at one of the three vehicle manufacturers put the state of Michigan into a quarter-long recession and resulted in an economic loss of $4.2 billion, according to . ��

Our response: “The impact of this strike will echo far beyond the city of Detroit, as multiple economic analyses have demonstrated,” 51�Թ��� President and CEO Jay Timmons said this morning. “The small and medium-sized manufacturers across the country that make up the automotive sector’s integrated supply chain will feel the brunt of this work stoppage, whether they are a union shop or not.”

• “American families are already feeling economic pressures from near-record-high inflation, and this will only inflict more pain. We urge a swift resolution to end this strike and avoid further undermining the strength of our industry and harming our broader economy.”

51�Թ��� in the news: (���ܲ�����������پ��Dz�),�� , (subscription) and (subscription) all covered the 51�Թ���’s response to the walkout.
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Discipline, reliability, a team-player mindset, leadership—manufacturers are looking for all these qualities in the talent they recruit. What if companies could tap into a population not only equipped with these skills but experienced in using them in high-stakes situations?

Well, the Manufacturing Institute—the workforce development and education affiliate of the 51�Թ���—has good news, if you haven’t heard it already: this population exists, and it’s military talent. Transitioning service members, veterans, National Guard members, reservists and military spouses have a wealth of skills and experience that translate easily into a manufacturing context.

So how can manufacturers reach these workers and make the best use of them? The MI recently convened both military and manufacturing leaders in Fayetteville, North Carolina, for its third Workforce Solution Series event, where they answered this question and offered a range of useful advice. Here are some of the highlights.

Generally speaking: Major General Eugene J. LeBoeuf, Deputy Commanding General, U.S. Army Reserve Command, highlighted the talents and skillsets that Army reservists can offer the manufacturing industry, including agility, a can-do attitude and a thorough grounding in engineering, logistics and mechatronics.

• With nearly 190,000 soldiers, the Army Reserve comprises much of the readiness force of the U.S. Army. Many of these reservists are underemployed or unemployed, which means they represent an opportunity for manufacturers.
• Manufacturers interested in hiring from this labor pool can partner with the , which connects companies with reservists at no cost.

Reaching military talent: Several panelists emphasized the importance of developing recruitment processes that encourage military talent to apply and interview for manufacturing jobs.

• “Make sure that the requirements you’re listing in your position descriptions are actually required. Do you really need someone to have a master’s degree to get the job done?” asked Rob Patton, vice president of Fayetteville Cumberland Economic Development Corporation.
• As a recently transitioned service member, James Goppert, HR business partner at WestRock, explained some of the challenges that military talent may face when entering the workforce. “Having to explain military skills and certifications to a civilian in an interview was strange. It would have been helpful to have someone on the other side who understood my experiences.”

Open to all possibilities: Jennifer Goodman, senior manager of talent initiatives at Coca-Cola Consolidated, drew on her experiences as a military spouse. “Military spouses are 92% women and have a 22% unemployment rate. That’s a huge labor pool that’s going underemployed or unemployed.”

• While relocation is often a concern for companies, Goodman points out that it does not have to be a disadvantage. “Think of manufacturers who have locations across the country. Maybe you can start a military spouse at one location and then move them to another. Or, if they’ve proven themselves after a few years, you could transition them to remote work.”
• “The benefits don’t stop with the one military spouse you hire,” she added. “We’re a very loyal community with great word of mouth and a larger referral network.”

The last word: “Don’t underestimate the value of an event like this Solution Series can have. You can take the information, energy and passion that you get from meeting with people who have the same goal of building a stronger economy and use it to power you forward,” said Nathan Huret, economic development director for Catawba County.��

Learn more: To get started—or continue—with hiring military talent, check out the extensive resources of the MI’s initiative, which prepares prospective military workers for new and rewarding careers in manufacturing.

A persistent shortage of construction workers in the U.S. is slowing the completion of everything from single-family homes to major infrastructure projects, according to .

What’s going on: To meet labor demands this year, “construction firms will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring,” CNBC reports, citing data from Associated Builders and Contractors.

• “The construction industry averaged more than 390,000 job openings per month in 2022, the highest level on record, while unemployment in the sector of 4.6% was the second lowest on record.”

Why it’s important: The industry’s labor shortage is not likely to be resolved any time soon. When combined with rising materials costs, it will only worsen the backlog of projects, which is already at a four-year high.

What’s needed: The bipartisan infrastructure bill of 2021 allocated money for projects, but not for “enticing new workers … or training” them, according to CNBC. Another component of the solution: , a policy the 51�Թ��� has long advocated.

• “More money is going to need to be spent on training additional workers, bringing people into this industry,” a source told CNBC.
• Said another, “We should also be looking at ways to allow more people to lawfully enter the country and work in construction careers, whether that’s a temporary work visa program that’s specific to construction, or broader comprehensive immigration reform.”

Our take: “The record manufacturing construction activity seen in the U.S. is further straining an already tight labor market,” said Chad Moutray, chief economist at the 51�Թ��� and director of the Center for Manufacturing Research at the Manufacturing Institute, the 51�Թ���’s 501(c)3 workforce development and education affiliate.

• “Leaders in the sector are trying to think of ways to differentiate themselves in the competition for talent. Such pressures—along with changing demographics—are likely to keep workforce challenges front and center over the coming years.”

The International Monetary Fund raised its growth forecast for the international economy on Tuesday despite slowing activity in China, according to .

What’s going on: “In the latest update to its World Economic Outlook, the IMF raised its 2023 global growth prediction by 0.2 percentage points to 3%, up from 2.8% at its April assessment. The IMF kept [its] 2024 growth forecast unchanged at 3%.”

• The IMF expects inflation to improve, too, and sees core inflation “declining more slowly to 6% this year, from 6.5% last year.”
• IMF Chief Economist Pierre-Olivier Gourinchas wrote in a blog post Tuesday that “the signs of progress are undeniable.”

However … Global economic challenges remain on the horizon, the IMF cautioned, citing a less-than-robust Chinese economic recovery from the pandemic, weakness in China’s real-estate market and an expected contraction of Germany’s economy.

• In Germany, manufacturing output declined in Q1 2023.
• Across nations that use the euro, “[d]ata released Monday showed business activity shrinking at a faster pace than expected.”

Our take: “While there continue to be significant challenges in the manufacturing sector globally, it is encouraging to see signs of resilience—not just in the U.S. economy, but in other markets as well,” said 51�Թ��� Chief Economist Chad Moutray.

For President and Owner Courtney Silver, retention all starts with culture. “I’m really happy to be here” is a phrase she hears often on her shop floor—and it tells her that the work culture at her company is in good shape.

• “A culture of empowerment that’s built on trust really fuels our team I think,” said Silver, who is the chair of the 51�Թ���’s Small and Medium Manufacturers Group. “They find so much dignity and purpose in fulfilling our mission here at Ketchie.”

Maintaining a high-performing, motivated and engaged workforce is a top priority for the third-generation precision machine shop in Concord, North Carolina, and Silver has implemented a number of strategies to keep it that way.

Team recognition: Every Wednesday, during Ketchie’s shift meeting, employees have the opportunity to recognize their team members for any achievement, big or small.

• “Recognition can be about anything,” says Silver. “It can be ‘Fred over there was able to cut five minutes of cycle time off this particular part because he changed the process’ or ‘Mary saved us money by switching out some tooling.’ We then post the feedback in the break room and email it out to the entire organization.”

• “There are so many things that can go wrong in manufacturing just trying to get a part out the door, and this is an opportunity to think about all the amazing things we’re doing,” she explained.

Silver also posts worker productivity charts every week. If workers meet their productivity goals and their indirect time goals, they get performance points, which are redeemable for gift cards.

• “I think people want to know if they’re on a winning team,” Silver said. “If you’re winning, it feels good. We’re all on the bus going in the same direction.”

Motivator Award: Each year, employees can also nominate a peer for the “Motivator Award,” which goes to the employee who best exemplifies Ketchie’s core values: to do the right thing, be agile and embrace continuous improvement.

• To honor the winner, Silver puts together a tribute video of team members sharing their thoughts about the employee and hosts a company brunch in celebration (to which the employee’s family is invited).

• “The winner also receives their own special parking spot, an extra day of vacation and a $1,000 gift certificate to the Marriott to take vacation with their family,” says Silver.

• “The team member that won the award last year had tears in his eyes, so I know that it’s been really impactful,” she continued.

Community service: Ketchie’s employees are passionate about giving back to the community. Through service projects, Ketchie supports the Boys & Girls Clubs of America as well as Cooperative Christian Ministry, which offers programs that relieve hunger and food insecurity and address homelessness and housing costs.

Opportunity Knocks: Silver isn’t only working to retain and support current employees, but also to train and mold the young people who will be tomorrow’s machinists.

• This year, Silver started an internship program for high school students named Opportunity Knocks. It allows students to shadow experienced machinists in factory environments while earning school credit.

• The interns go through a curriculum created by Edgerton Gear, Inc., called , a 16-week course that helps students explore the role of character in a professional trades environment. Silver said the course, which includes leadership and manufacturing-focused exercises, is taught at Ketchie four days a week in two-hour sessions. Three days of the week are job shadowing machinists on the shop floor, and one day is in a classroom setting at the shop discussing character traits and soft skills. The conversations lean on discovering what’s important in life and what might make them happy.

• “They absolutely love these high schoolers,” said Silver about the two mentors at Ketchie, who each have more than 30 years’ experience. “It gives them an opportunity to share their entire work career: what they’re doing, experiences learned along the way. It’s been neat to see.”

Investing in technology: Silver knows her team wants to work for a company that’s growing and investing in technology. She recently purchased a machine-tending collaborative robot, which takes over machinists’ “least favorite” part of the job—changing parts while the machines run.

• “I interviewed somebody recently who said to me in the interview, ‘It’s really good to see that you want to grow and that you’re making these big investments,’” said Silver. “You’re buying new technology that excites them. They want to be part of that mission and growth.”

The last word: Silver shared some advice for companies that might be struggling with workforce retention.

• “Use employee surveys, focus groups or roundtable discussions to see what you need to do or should do. Everyone wants to be heard. It’s important to listen.”

The 51�Թ���’s workforce development and education affiliate, the Manufacturing Institute, has many initiatives to help employers retain and develop their teams. For a deeper dive, check out by the MI on improving retention and employee engagement. The MI will also explore retention challenges and solutions at its Workforce Summit in Atlanta on Oct. 16–18. Click for more information.