Greater Martinsville Chamber of Commerce PresentationNovember 18, 2011

www.conexusindiana.com

Why Conexus IndianaIn June of 2007, the Central Indiana Corporate Partnership (CICP) launched

Conexus Indiana after the Battelle Report identified the following as Indiana’ target industry clusters: life sciences, technology, advanced manufacturing and logistics,

energy/clean technologies

Our MissionTo serve as the catalyst to position Indiana as the

recognized global leader in the advanced manufacturing and logistics sectors

Conexus Indiana Executive Committee Robert Bernhard Vice President for Research, University of Notre DameSteven Dwyer President and CEO, Conexus IndianaMark Gerstle Vice President-Chief Administrative Officer, Cummins Inc.Scott Glaze CEO, Fort Wayne MetalsJ. Mark Howell President, Brightpoint AmericasRobert Koch II President and CEO, Koch Enterprises, Inc.Catherine Langham President, Langham Logistics, Inc.Victor Lechtenberg Vice Provost for Engagement, Purdue UniversityJoe Loughrey Retired Vice Chairman, Cummins, IncMark Miles President & CEO, Central Indiana Corporate PartnershipDennis Oklak Chairman and CEO, Duke Realty CorporationRobert Palmer Vice President, FedEx CorporationDavid Parish Vice President of Operations, Allison Transmission, Inc.Thomas Snyder President, Ivy Tech Community College of Indiana

Conexus Strategic Priorities

Workforce development identified as the top priority – employers need a new breed of skilled workers to grow/succeed

Industry also wanted an organization which could focus on broad issues of mutual concern – research, public policy, infrastructure

Attract and train a 21st century AML workforce

Support the sector via research, policy + infrastructure programs

While low-skill (-25%) and mid-skill (-18%) jobs declined over last 20 years: “Employment in high-skill manufacturing occupations has risen 37%, an increase of roughly 1.2 million jobs. High skill jobs were the only source of job growth in the U.S. manufacturing sector during this period.” - Federal Reserve Bank of New York

The Demand for Skilled AML Workers

Workforce development is economic development.

But Indiana Falls Short in Supplying Qualified Workers

The 2011 Manufacturing and Logistics Report Card compares the state of Indiana’s AML industries with those of surrounding states

Indiana ranks 35th in the number of adults holding an associates degree

Indiana ranks 31st in percentage of workforce with a high school diploma and 42nd in college-educated workers overall

Confronting the Human Capital Challenge

Workforce readiness is the major threat to the future of Indiana’s largest economic sector

The scope of this challenge demands a collective, collaborative approach

But today, too many employers still embrace an outdated model of worker training…

Employers agree that a majority of their employees need more training

Results from recent Conexus statewide employer survey:What percentage of your employees would benefit from targeted training for their job?

53% say half or most of their employees need additional training

But most employers are still hiring unskilled workers and shouldering the in-house training burden

What is your minimum educational requirement for entry-level employment?

A Better Approach… The Old Way:

Hire unskilled workers, train them in-house – expensive and inefficient for individual companies

Industry is disengaged from educational institutions As skill demands rise, so do training costs – a competitive disadvantage Prospective AML employees have no consistent path to employment

A New Way: Connect industry and academia – solicit private sector input to create

relevant, industry-endorsed educational programs Market these programs aggressively to prospective employees Build a robust pipeline of qualified applicants – in-house training costs

are lessened, overall workforce quality increased, common standards are set

Keys to Upskilling the Workforce

Voice of Industry – identify workforce needs

High School programs – start the pipeline early

Community College partnerships

DOE/DWD engagement – career pathways and curricula

Marketing – social networks/media – attract young Hoosiers

A National Campaign – portable AML credentials

Attract and train a 21st century AML workforce

Support the sector via research, policy and infrastructure programs

Industry Led Task Force High School Champions (89) High School Superintendents (40) Career and Technical Education (15) Skills Map – Basis for Curricula Dream It. Do It. (480,000 “impressions”) Social Media-Awareness Events Community College Partnerships Pathways – DOE and DWD Manufacturing Institute – Skills

Certification System

Advanced Manufacturing and Logistics Skills Map

What Industry Needs Today . . .

Safety and Environment

Production and Inventory Control Systems

Six Sigma Tools

Lean Manufacturing Principles

Regulatory Compliance

Total Quality Management (TQM)

. . . It’s a New World

Advanced Manufacturing and Logistics Pathways

– AML Pathways were in the first tier of Career Pathways developed by the DOE as part of a 3 year project to transform the $100 million career and technical education program in Indiana

– Conexus was instrumental in designing Pathways using the Skills Template

– AML Pathways will be piloted this year

Champion Schools

Pike High School Plainfield High School Shelbyville High School Southport High School Speedway High School Tri-County High School Triton Central High School Tri-West Senior High School Vigo County Schools Waldron Senior High School Walker Career Center Warren Central High School West Central IN Career & Tech Western Boone High School Westfield High School Whitewater Career Center Wildcat Creek Career Cooperative Zionsville High School

Anderson High School Area 30 Career Center Area 31 Career Center Arlington High School Arsenal Technical High School Ben Davis High School Ben Davis 9th Grade Center Blue River Career Center Brownsburg High School Carmel High School Cascade Senior High School Center Grove High School Central Nine Career Center Century Career Center Danville High School Decatur Central High School Eastern Hancock High School Eminence High School Emmerich Manual High School Excel Center - Logistics

Franklin Community High School George Washington High School Greenfield Central High School Hamilton Southeastern High School Hinds Career Center Hoosier Hills Career Center Indian Creek High School Indianapolis Metropolitan High School IPS Career Technology Magnet IPS New Tech High School Lawrence North High School McKenzie Career Center Mooresville High School Morristown High School Muncie Central High School New Castle Area Career Programs New Palestine High School Noblesville High School Parke-Vermillion Schools Perry Meridian High School

Conexus Indiana - 58 High Schools

Manufacturing Skills Certification System (MSCS) Working with Manufacturing Institute on national AML credentials

Creating a set of relevant, consistent industry certifications that can be applied nationally

Conexus acts as the voice of industry

(Industry)

Attract and train a 21st century AML workforce

Support the sector via research, policy and infrastructure programs

Industry Led Task Force High School Champions (89) High School Superintendents (40) Career and Technical Education (15) Skills Map – Basis for Curricula Dream It. Do It. (480,000 impressions) Social Media-Awareness Events Community College Partnerships Pathways – DOE and DWD Manufacturing Institute – Skills

Certification System

AML Report Card Published First Ever Logistics

Strategic Plan Statewide Logistics Council Intermodal Support Statewide Automotive Council Statewide Aerospace/Defense

Council Statewide Supplier Database

(6,449) Six Current Conexus Partners

The Logistics Council

Logistics Council Members

Chaired by Chip Edgington, Executive Vice President of Redcats Four Task Force Groups

Infrastructure – Chaired by Torrance Richardson, Ex. Director of Fort Wayne-Allen County Airport Authority in Fort Wayne

Public Awareness – Chaired by J. Mark Howell, President of Brightpoint Americas, Inc. in Plainfield

Public Policy – Chaired by Don Miller, Jr., President of Mt. Vernon Barge Service in Mount Vernon

Workforce Development – Chaired by Chip Edgington, Executive Vice President of Redcats in Indianapolis

44 Members from around the State

Logistics Council Executive Committee

Logistics Obstacles Facing Indiana

Impact of InactionImpact of Inaction

• Increased costs

• Potential environmental impacts

• Inefficient freight movement

• Loss of productivity for Indiana’s businesses

• Decreased safety

• Increased costs

• Potential environmental impacts

• Inefficient freight movement

• Loss of productivity for Indiana’s businesses

• Decreased safety

Indiana’s LimitationsIndiana’s Limitations

• Transportation bottlenecks

• Lack of direct rail service

• Underutilized air facilities

• Lack of efficient mode-to-mode connectivity

• Decaying locks infrastructure

• Lack of dredging

• Transportation bottlenecks

• Lack of direct rail service

• Underutilized air facilities

• Lack of efficient mode-to-mode connectivity

• Decaying locks infrastructure

• Lack of dredging

Key Indiana Logistics “Go-Gets”Intermodal facilities in Indiana that bypass Chicago bottleneckIntermodal facilities in Indiana that bypass Chicago bottleneck

Increase in air cargo flights to and from Indiana airportsIncrease in air cargo flights to and from Indiana airports

Construction and redesign of key locksConstruction and redesign of key locks

Completion of key infrastructure projects in bottleneck regionsCompletion of key infrastructure projects in bottleneck regions

Logistics tax credit to attract and retain logistics companiesLogistics tax credit to attract and retain logistics companies

Industry-driven logistics high school and postsecondary curriculumIndustry-driven logistics high school and postsecondary curriculum

1

2

3

4

5

6

Indiana Supplier INsight Helping Hoosiers do business with Hoosiers:

– A procurement portal connecting Indiana companies (from all industries, though emphasizing AML firms) with in-state suppliers

– Nearing 6,449 Hoosier businesses registered

– Access to a Broad Spectrum of Capable Hoosier Businesses

– Comprehensive Supplier Information: capability, diversity, certifications, product/services information, demographics

– Supported & promoted by IEDC, Indiana Secretary of State, Department of Administration, Indiana Chamber of Commerce and Indiana Small Business Development Centers

Conexus , in partnership with the Indiana Economic Development Corporation, established the Indiana Automotive Council to advance automotive design, innovation and manufacturing within the state of Indiana

The Council is industry driven and composed of senior executives from the most influential, most innovative and fastest growing automotive companies in Indiana

The Council is helping develop a strategic plan to facilitate job creation and capital investment in the automotive industry

Conexus , in partnership with the Indiana Economic Development Corporation, established the Indiana Aerospace and Defense Council (“IADC”) to encourage growth in Indiana’s Aerospace and Defense cluster

The IADC will serve as a structured forum to explore industry-specific issues and challenges and identify solutions to position the state to meet its long-term goals of job growth and increasing state and local revenue

The IADC will serve as a “voice” of Indiana’s aerospace and defense cluster

Questions?

Workforce Facts Manufacturing employees more than 500,000 people in

Indiana

Logistics employees more than 300,000 Hoosiers

61% of U. S. companies cite a serious shortage of skilled production workers

At the same time, nearly 1,000,000 Hoosiers lack the basic educational skills needed

Indiana: The Crossroads of America

Indianapolis International Airport: 8th largest cargo airport in North America

Indiana is 9th among states in rail miles (nearly 4,500 miles)

Indiana ranks 14th in the U. S. in waterborne freight traffic

Indiana exported over $28 billion of goods in 2010

The logistics industry contributes nearly $9 billion to Indiana’s Gross State Product (2009)

75% of the nation’s population and businesses are within a day’s truck drive of central Indiana

Did You Know?

Indiana’s motor vehicle industry is the 2nd largest in the United States, producing more than $9.8 billion in goods

Indiana is home to more than 630 automotive companies

More than 120,000 Hoosiers are employed by the Indiana automotive industry

6 different Original Equipment Manufacturers (OEMs) have automobile assembly facilities in Indiana . . . More than any other state

More than 11% of all automobiles produced in the United States are produced in Indiana

Did You Know? In 2010, more than 1,600 Indiana employers entered into

prime contracts with the Department of Defense, worth a total of $4.35B (24th nationally)

- 165 companies surpassed more than $1M in contracts

- Small businesses received a total of $577M, at an average contract value of approximately $95K

Harvard University’s Cluster Mapping Project indentified Indianapolis as the 4th largest aerospace engine cluster in the North America

NSWC Crane is the 3rd largest naval installation in the world

Northeast Indiana Defense Industry Association (NIDA): shining a spotlight on Department of Defense opportunities