So That Happened: AI Doesn’t Scare Manufacturing Workers, Reality Check for EV Demand, Metallurgist Shortages
Editor’s note: Welcome to So That Happened, our editors’ takes on things going on in the manufacturing world that deserve some extra attention. This will appear regularly in the Member’s Only section of the site.
What the Midwest Needs: Metallurgists
During the recent Ohio Space Forum held in Cleveland, Howmet Aerospace’s Markus Heinimann, vice president, technology and quality, had good things to say about the local supply chain feeding the manufacturer's Cleveland operations. We shared his comments in a previous So That Happened, but, in short, he described the robust supply network as “crucial” to the company’s success. What we didn’t touch on in the last piece is Heinimann's concern on a different topic: metallurgists—or, more specifically, a lack of metallurgists. “That’s becoming a problem for us.”
While the Big 10 geographic area (“I’m a Boilermaker myself,” Heinimann noted) has many technical schools and universities providing “tremendous” materials science and engineering talent, Heinimann says metallurgy has “atrophied.”
“Nobody’s turning out metallurgists anymore. So, trying to find somebody that can actually tell me the difference between FCC and BCC structure and what that means and what the impact is, is becoming a challenge,” he said. “And metals aren’t going away anytime soon. The use of titanium in commercial aerospace and its base applications is actually growing, so getting into universities and finding ways to make sure that we're not losing the metal that's in our DNA here locally, it’s going to be crucial for continued success."
Purdue University Shakes Hands with Taiwan Again
Purdue University on June 22 extended through 2031its partnership with semiconductor giant Taiwan Semiconductor Manufacturing Co.—and by “giant” we mean produces 60% of the world’s semiconductors generally and 90% of the most advanced chips (per The Economist) —to continue their collaboration on workforce development and research programs.
The partnership revolves around graduate fellowships and research assistantships at Purdue’s Center for Secure Microelectronics Ecosystem (CSME), founded “to help ensure a secure supply of semiconductor chips and related products and tools, from the foundry to the packaged system, based on a zero-trust model.”
Purdue on the same day also announced signing on June 15 memorandums of understanding with two research universities in Taiwan, National Yang Ming Chiao Tung University (NYCU) in Hsinchu and National Chengchi University (NCCU), a public research university in Taipei. The collaborations include more workforce development and research programs to “advance freedom by driving the innovation and adoption of trusted technology.”
I am not sure what ‘advancing freedom’ means. Usually in the context of Taiwan I’d consider “Stopping the Chinese from invading the island” as ‘advancing freedom’ but I'm sure that's not what they mean, here.
And all of this follows Purdue’s formation in April of the President's Semiconductor Task Force to help hook the university up with the CHIPS for America and Science Act. So, you know…they’ve been busy.
To harken back to my wise-guy comment above, I do think first and foremost about security when it comes to Taiwan and semiconductor production. The recent fab announcements in the U.S. don’t involve the low-power semiconductors used in consumer goods and automotive (other than for GPS or driver assistance systems) among other industries. I suspect these programs at Purdue don’t address the question owing to the focus on R&D.
It feels like beating a dead horse to say the war in Ukraine may or may not inform China’s long-standing goal of forcibly reuniting Taiwan with the mainland. The world’s democratic nations may or may not unite in defense of the island as they have with Ukraine (something some international security experts refer to as Taiwan’s “Silicon Shield”). The United States and private enterprise really need to start announcing plans to reshore production of cheap, low-power semiconductors before continuing to clap themselves on the back for all the forward thinking with semiconductor manufacturing.
Keeping Debate Respectful and Very Informative
James Wells, a quality expert and occasional contributor to IndustryWeek, didn’t agree with some of the conclusions of a popular recent article, “Widespread Lean Adoption Would Make the US More Competitive.” So, he jumped into the story’s comments section (recently restored after months of technical problems) and shared his rebuttal.
“I think this is an overly simplistic treatment of a complex problem. Manufacturing productivity is not a simple single-variate relationship. Lean, nor any other single solution, will return the US to an upward trend in productivity,” Wells wrote.
Internet debates these days aren’t known for well-reasoned, expert opinions or polite exchanges of ideas. But, that’s what followed Wells’ comments. Lean adherents (and IW editors) brought up success stories and statistics to counter some of Wells’ thoughts, and he explained his thinking more completely in responses.
The net result, more information than the story presented initially and readers walking away with more context on the complex issue of productivity declines. If only all online debates could be so productive.
Ready … or Not?
The Biden administration’s goal of EVs making up 50% of the new car market by 2030 is aspirational at best. Still, consumer acceptance of EVs is steadily building in the U.S. According to EY’s just-released Mobility Consumer Index for 2023, 48% of new-car consumers said they would consider purchasing an electric vehicle (battery-electric vehicle, hybrid or plug-in hybrid). That was an increase from 29% of consumers in 2022.
The top causes of U.S. consumer hesitation? No. 1 was a perceived lack of charging infrastructure (28% of respondents), followed by the high cost of battery replacement (27%) and concerns about the charging range (25%). Recent deals that Ford and GM struck to partner with Tesla’s charging network should alleviate some apprehension about the availability of chargers. But the cost of battery replacement—and how long, exactly, the original battery will last—is more worrisome. Replacing the battery can cost as much as 50% of the sticker price of the vehicle—and insurance costs can be higher too, with battery replacement so expensive.
The EY study also looks at EV readiness globally. This was a bright spot for the U.S., which ranked No. 7 in 2023 for EV readiness, compared to No. 12 in 2022. The top-ranking EV countries? China, Norway and Sweden, respectively.
An Ample Assortment of Additive Action
It’s nice to be wanted.
The directors of additive manufacturing venture Stratasys Ltd. and their financial and legal advisors have a few more cramming sessions ahead after peers 3D Systems Corp. and Nano Dimension Ltd. both increased their bids to buy Stratasys—which has itself agreed to join forces with Desktop Metal Inc.
After a June 27 flurry of company statements and a whopping 18 filings with the Securities and Exchange Commission between the four companies, here’s where things stand:
Nano’s tender offer for Stratasys stock recently in about 8% of the outstanding shares being offered. Nano’s board has now increased the price it is prepared to pay for those shares and others to $20.05 from $18—Stratasys closed June 27 trading at $17.24, up more than 6% from the day before—and lowered the amount of shares it is aiming to buy to between 31.9% and $36.9% from its previous target of about 40%. Combined with its existing 14.1% stake in Stratasys, Nano’s leaders are aiming for control of at least 46% of their target’s stock and need commitments by July 24.
In their quest to break up the Stratasys-Desktop deal, 3D’s directors have lifted their offer for Stratasys to $7.50 in cash and about 1.32 shares of 3D. Combined, those components are now worth $20.76 thanks to a 10% pop in 3D shares on word of the latest offer. In addition, 3D’s leaders said they’re open to the idea of letting Stratasys investors change (within defined limits) that cash-and-stock mix. But even as things stand, President and CEO Jeffrey Graves said, this offer is superior to the Desktop Metal plan and the Stratasys board ought to come to the table for talks.
Next up: In a note to employees, CEO Yaov Zeif said the board expects to make known its opinion on Nano’s new offer within 10 business days. Since Stratasys has been swatting away Nano’s overtures for months, it’s unlikely to suddenly have a change of heart. Investors’ positive reaction to the new 3D offer, however, suggests the possibility for deeper debates in the Stratasys boardroom.
You Should Probably Check the Blinker Fluid Too
On its website on the benefits of driving Chevrolet electric vehicles (EVs), General Motors lists “Less Scheduled Maintenance: No more oil changes” right under a picture of the Chevy Bolt EV. It’s a message that apparently isn’t getting to its dealers.
As noted in this column, I bought a Bolt EV about three months ago and have been enjoying it ever since. It’s a bit smaller than what I had been driving, but the convenience of charging at home, the loads of driver-assist technologies and creature comforts have more than made up for the size.
On the 90-day anniversary of driving off the lot, I received an email from the dealership letting me know that they sincerely hoped I was enjoying my new car, and oh, by the way, I should probably go ahead and schedule my first oil change.
The Bolt doesn’t have an oil filter or engine oil because it doesn’t have an engine. I suspect that if I’d scheduled that service, they might have tried to convince me to change my (non-existent) air filter as well.
To be fair, this was an automated customer relationship management system doing its job of pitching services. The salesman at the dealership was very knowledgeable about the vehicle when he sold it to me, detailing what services I should schedule and when. So now, I just have to schedule an appointment to get that winter air in the tires swapped out for the good summer stuff.
Artificial Intelligence Anxiety? Not For Manufacturers
Just 28% of manufacturing workers fear losing their jobs to automation and new technologies, according to eLearning Industry’s recently released State of the Employee Experience Report. The 2023 report’s researchers surveyed 1,000 corporate workers in several fields, including manufacturing, healthcare and finance/insurance. Other industries reported much higher percentages of the same metric.
Findings about the employee experience reveal areas of improvement in training and communication. Nearly half (48%) of manufacturing workers reported the need to relearn everything as they were overwhelmed and unable to retain information presented during the onboarding process. Also, half of manufacturing employees report starting a job search because of burn out and distress in the workplace.
One key finding of the report outlines the scope of the employee retention issue plaguing many in the industry: “Despite news of large-scale layoffs in some sectors, top talent remains a scarce commodity in many industries. In their search for [something], employers are keenly focused on the recruitment process, sometimes at the expense of the new hires they so eagerly pursued,” according to the report.
