Back in 2000, while working for a Maryland-based company, John Burns sent the fabrication of microwave filters offshore to a newly opened Dominican factory near Santo Domingo. At the start, Burns figured that the Dominican workers wouldn't be skilled enough to handle smaller, technical orders, so he sent them only bulk work. When they had no problem with those orders, he gradually began sending smaller, more high-tech projects — everything except prototypes. No major mistakes. Finally, Burns sent just specs, and the plant engineered the prototypes, documented them in plans and sent them back to Maryland.

Within a year, the Dominican workers proved they could do anything Burns needed, with comparable or better quality than American workers, at a fraction of U.S. labor costs. "We found that the education levels around Santo Domingo were higher than places in the United States," Burns says. "In a year, they proved us totally wrong."

Burns is now a VP at Neilsen Manufacturing in Salem, which makes metal parts for electronic equipment, and he maintains that his new company's highly technical work and associated jobs are here to stay. But that successful offshoring experience still sends a shiver down his spine, especially given the competency levels he's seen in younger workers at 180-employee Neilsen, which was in hiring mode this summer.

Potential hires' resumŽs list skills that, upon testing, they don't really have. "They have welding but when we ask them to meld two pieces of metal together, they can't do it," Burns says. New hires force the company to spend an inordinate amount of time teaching basic competencies such as using measuring devices, "stuff they should have learned in the seventh through 12th grades," he says.

And he's hearing the same complaints from manufacturers on a statewide level, where he chairs a task force studying the manufacturing workforce.

This month, Burns and the task force will report back to Gov. Ted Kulongoski and the state workforce board, which oversees investments in training programs throughout Oregon. The report's foremost recommendation is that the state increase the effectiveness of its education system. And soon. If Oregon could only bolster K-20 achievement, companies say, they could actually compete in the flat-out war of global manufacturing. Without well-equipped people, they're dead in the water.

"If U.S. manufacturers are going to survive we have to do it through automation," says Tom Fahey, a member of the task force who is HR director at silicon wafer manufacturer Siltronic in Portland. "The people who run that more [highly] automated line have to be highly trained and educated."

For the moment, much of the education and training of the workforce for manufacturers and industry as a whole is falling to the state's 17 community colleges, which served 330,000 students in 2003-04. In 2000, nearly half of students under 20 arriving at community colleges — many of them fresh out of high school — needed remedial courses before they could begin college-level work.

Community college officials are making a renewed push to attack the skill deficit and deliver better-equipped workers by teaming up with business. Two-year associate's degrees across the state have been sliced up to teach more limited skill sets that employers are looking for — golf caddies in Coos County, RV assemblers in Lane County. And community colleges are looking to boost the amount of customized training they did for 500 employers statewide in 2003-04. One distinct change is to move some college-level courses — which can be credited toward an associate's degree, and ultimately lead to a B.A. at a four-year university — off campus and into companies' in-house training programs.

"The ultimate goal is an associate's degree, but it has to be built on a model that's relevant to employers," says Cam Preus-Braly, commissioner of Oregon's community college system. "We need to acknowledge that our old model of two years in school to get a degree may not suit our employers — or our students, the customers."

Delivering education in concert with business is also neccessary for community colleges because the funding distributed from Salem is sharply below pre-recession levels. Funding earmarked by the Legislature rebounded slightly for '05-'07 to $428 million, up from $411 million in the previous biennium. But that's still well below the amount colleges say they need to be effective in an era of growing need. So the goal at some colleges is to turn customized training programs into stand-alone profit centers. For instance, Portland Community College (PCC) has a rebranded training program — the Center for Business and Industry — that is expected to earn money for the college starting in 2006.

Community college officials recognize, however, that there's more in the balance than the success of individual companies or colleges. With mass baby boomer retirements expected to begin at the end of the decade, and the high-tech skills of foreign workers rising by the day, the colleges see themselves as key to Oregon's global competitiveness

"The bar is being raised — a high school education is not enough for the jobs of the future," says Nan Poppe, PCC's vice president for academic and student affairs. "We need to get the skill level up so business does not have to go outside to get workers."

COMMUNITY COLLEGES HAVE BEEN ON THE FRONT LINES in recent years, delivering workers to industry in a tight time frame — be it electronics workers during the high-tech boom or, lately, nurses through industry-backed programs in the Portland, Bend and Medford areas that address the statewide nursing shortage.

At Neilsen Manufacturing, contract work to make computer chassis and shells for other electronic devices floods in for several months at a time and then abruptly cuts off, exacerbating workforce issues.

What John Burns says is urgent — and what he has been working on with Chemeketa Community College and other Salem metals companies — is specific skill-training programs that he can rapidly tap into. That way, when Neilsen wins a contract that requires new welders or the company wants to get new hires up to speed reading blueprints, the worker training can happen on the company's schedule.

"I want to be able to say, 'I need a class in this skill and I need it to start on Thursday,'" says Burns, a small, fit man, who walks Neilsen's 160,000-square-foot floor in jeans and sneakers. "I don't have time to wait for the fall term to start."

Chemeketa, Salem-area companies and local business organizations have taken a first crack at filling immediate training needs by forming the Web-based Oregon Gateway network (www.trainingmatrix.com/oregongateway), created with the help of a $2.76 million Department of Labor grant. The site puts at HR managers' fingertips the entire universe of local training opportunities — from computer-aided design to workplace literacy — that are offered at Chemeketa, employment agencies and via training websites. Burns says he's offered instructors from Neilsen to Chemeketa, and he's talking about pooling in-house training sessions with other companies.

At Salem companies' request, Chemeketa has also used the Department of Labor grant to add a new online degree program geared toward the emerging nanotechnology field.

Meanwhile, Ray Hoyt, co-director of Chemeketa's training and economic development center, is working on condensing skills courses into modular units that can be completed in a few intensive sittings, as opposed to an entire academic term. Hoyt began this work at Central Oregon Community College in Bend, where he led the industry training department. He found that intensive units capped by comprehensive assessments delivered better-equipped workers to manufacturers and other employers.

"It's getting at what's more important to industry," which is competency — not hours in a classroom — according to Hoyt.

Oregon manufacturers are also working to stay ahead of overseas competitors by adopting lean production techniques to more efficiently organize their factory floors. To quickly implement the lean concept, which thrives on broad acceptance among employees, manufacturers teamed with Portland Community College to create a pre-lean prep course for non-English speakers. The program has spread throughout the state to other colleges and industry collaboratives such as the Oregon Manufacturing Extension Partnership.

"The awareness of trying to stay competitive has really hit home with local companies," says Julie Hatten, program director for the Northwest High Performance Enterprise Consortium, a manufacturing education group whose membership grew by 200% last year.

MANUFACTURING JOBS CONTINUE TO RUSH OUT OF THE UNITED STATES, though, and that calls into question efforts to keep them here. Is it worthwhile for taxpayers and businesses to spend money to keep jobs that may eventually be sent offshore anyway?

The stakes in the debate seem to rise almost daily, with the skill edge that American workers once held against foreign competition quickly eroding across industries. Hatten says recent discussions in the manufacturing sector are focusing on the adoption of lean techniques in Chinese factories, with insiders telling U.S. companies that, "if China goes lean and you haven't, you're out of business," according to Hatten.

Neilsen has already lost metal work to Asia that it used to do for InFocus and Hewlett-Packard. The company also outsources to China some of its basic metal work for one "major" customer. (Sun Microsystems is among the company's biggest clients.)

Economist Jared Bernstein, who follows labor markets for the Economic Policy Institute in Washington, D.C., says that with the steady outsourcing of manufacturing business, efforts to boost domestic skills may not pay off, for the simple reason that 20-something students and entry-level workers don't believe in the sector anymore. Bernstein suggests that steady and well-publicized closures of U.S. factories are steering students away from hands-on skills and related education, and that may explain skill deficits that Neilsen and other companies are seeing.

"If everywhere you look factories that appear to be successful are moving to China and Mexico, that doesn't signal to the workforce that it should invest in those skills," Bernstein says.

Manufacturing does indeed have a publicity problem, according to John Burns, who notes the decline of shop and technical programs in high schools, along with the fact that teachers and guidance counselors tend to dismiss manufacturing as a viable career goal. The governor's manufacturing task force will recommend more promotional outreach in schools by companies and their community college allies.

But Bernstein of the Economic Policy Institute wonders if catering to manufacturers' demands by tweaking programs in high schools and community colleges is a smart long-term investment. Supporting training programs for jobs such as X-ray technician and home care specialist — health care employment that can't easily be outsourced overseas — may make more sense. "I'm worried about the lack of attention of policy makers to the decline of the manufacturing industry," Bernstein concludes.

Community college officials insist that their mission includes serving the businesses of today, and that for all the talk of manufacturing's demise, it still comprises around 17% of the state's economic output. (Oregon ranks second only to Indiana in the importance of its manufacturing sector.) And Oregon community college leaders say their schools are designed around a volatile economy — they are nimble enough to ramp up for immediate business needs and shut down when industries run out of steam.

"Our relevance has survived by being flexible," says Preston Pulliams, president of PCC. "It's an operational thing that we accept."

TECHNICAL SKILLS ARE ONLY SHORT-TERM TICKETS in today's economy, community colleges now seem to recognize. So college officials are constantly searching for ways to bundle the so-called "soft skills" — critical thinking, team building, dispute resolution — into technical programs. Training specialists anticipate that individual workers, both manufacturing workers and professionals, will have broader job descriptions in the future, and that broader skills will aid people in an evolving, high-turnover economy.

"There's very little now of just teaching a process to someone and asking them not to think about much else," says Paul Wild, director of PCC's training program. "You're looking at transferable skills."

In a taste of what's to come, Wild is consulting with a company (he won't identify it at this point) that wants to offer its employees in-house business administration courses taught by PCC instructors and worth credit toward an associate's degree. Wild says the company wants to develop better managerial skills among its staff, as well as encourage employees to pursue higher education for their own advancement.

Intel already has a fully developed, company-specific degree program in Oregon: an MBA course taught in Hillsboro by professors from highly rated Babson College, located outside Boston.

Kim Clausing, an economics professor at Reed College and expert in globalization, says these sorts of collaborations between businesses and community colleges make sense, provided the course work includes broad-based education that fosters better critical thinking and composition skills, for instance.

"There's a difference between skills training and education," says Clausing. "To the extent you get the company contributing to education, it's good. Colleges have more resources than they would without help from the private sector, and even if that job disappears, the student has the work history and has learned something."

There is a limit to what these partnerships can do for Oregon's workforce, however. Coping with baby boomer retirements will mean bringing thousands of recent immigrants into the workforce, in addition to training Oregon natives. The best way to start assimilating low-skilled adults into the skilled ranks is through basic education and language programs offered at community colleges. From there, they can move into degree programs. But this is a pathway that potential workers need to get moving on before they're even on companies' radar. And for that reason few businesses are likely to pick up the tab for language and basic education courses.

However, in the current budget climate, community colleges can't match the overwhelming demand for these courses. Preus-Braly, the community college commissioner, says colleges have discontinued waiting lists for English-as-a-second-language classes because the lists swelled into the hundreds. "We could easily double ESL courses if we had the resources," she says.

Doing nothing to improve the situation puts the economy at risk. Industry has some heavy lifting to do, with its current workers and the new crop of Oregon-educated students entering the job market without critical skills. But bringing immigrants into the fold is perhaps equally important. It's a challenge industry leaders and policy makers have to overcome if they want to put a skilled workforce in the field for the 21st century.

"The achievement of ethnic minorities is something we have to pay attention to," Preus-Braly says. "We can't ignore a segment of the population and be globally competitive."

[SIDEBAR]
A CRASH COURSE FOR NEW ARRIVALS
Traditional Iranian music kicks up from a boom box in a large Portland Community College classroom deep in Beaverton's Capital Center. Two well-dressed Iranian students begin twirling in the Parisa Hoonan dance. Behind them other students sway and keep time; there's a young Somali man, an aging former accountant from Pakistan and a smiling Indian from Goa whose background includes work with airline and cruise companies. In a row of seats in front of the dancers, several local high-tech executives clap along. This is the graduation ceremony for PCC's entry-level high-tech training course, a six-week program that's on the leading edge of business- community college partnerships.

Two years ago, Merix, along with Vanguard EMS and Benchmark Electronics, initiated the program of basic electronics and language skills to tap into Washington County's Latino community. Now, it's a competitive gateway for all manner of non-native English speakers.

The three employers handpick the students and pay for their course once they are hired (95% are). The companies find that they get worldly, motivated and qualified — sometimes over-qualified — workers in return, often in contrast with Oregon-raised workers.

"These folks have been computer engineers and accountants and they are coming into jobs that are entry-level," says Tesa Patton, Vanguard's HR director. "But they decide, 'I'll apply what I've got and see how far it'll take me.'

"When you see [Oregon] students coming out of schools around here," Patton continues, "they're expecting everything right now. And they're always asking, 'Why do I have to do this or that?'"

At a post-ceremony lunch, Ivo D'Cruz, the 35-year-old former tourism worker from Goa, offers an impassioned explanation for why he left India. He had heard the story of the inventor of Bose radios, a man from Calcutta. In India, as D'Cruz tells it, the man got no traction for his idea. But when he brought it to the United States, he found the right backers and made a fortune.

"I came to America because people will listen to me," he says, adding that he would like to invent something — anything — someday. "If I can't make it here, I won't be able to make it anywhere in the world."

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Copyright 2005 Oregon Business magazine