Industry Research Project

The Present and Future of Metal FabricationHow do today’s metal fabricators see the industry and how do they think their successors will differ from them?

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2 The FABRICATOR Special Report • JUNE 2014

Contents

3 Executive Summary

4 Today’s Metal Fabricator

6 Metal Fabricating: Any Recommendations?

8 What About Tomorrow’s Worker?

10 What Does the Future Hold?

JUNE 2014 • The FABRICATOR Special Report 3

Executive Summary

Manufacturing’s Offstage Majority

Ask anyone outside this business about what they think drives manufacturing and they’ll probably talk about automation. For sure, advancements in machinery and software have allowed companies to produce more with less in record time. North American manufacturing—indeed, manufacturing anywhere—couldn’t be competi-tive without technology. But this perception misses something: the people. That’s what the following pages are all about.

Talking heads on TV may interview blue chip CEOs, but the people who make their parts work away from the spotlight. Call them manufacturing’s offstage majority. They may work in a multigenerational family business, or they may have founded the business themselves. They may soon be passing the torch to the next generation or per-haps to another entrepreneur from outside the industry.

They also come from varying backgrounds. Several generations ago many people moved from farming to the fab shop (among many other manufacturing disciplines). Today some have metal fabrication in their blood, going back several generations. But in this survey, more said that either they or others of their generation launched the business. Some entered the field after making a career change or joined after high school or technical college. Considering the data, no singular narrative defines the metal fabrication career path.

Many worry that this industry has a quickly aging workforce that will soon retire and take their skills with them. Most of the industry leaders who answered this survey said they’ve spent more than 30 years in this business, and almost a third of respondents said they’re thinking of retiring within the next 10 years. When it comes to leadership, this business is in store for a signifi-cant changing of the guard.

Metal fabrication is aging, for sure, but not everyone is nearing retirement. When you look at employees, age follows a standard distribution. Most workers are be-tween 36 and 45 years old. In fact, the distribution sides slightly toward the youth. The second-largest population reported here is between 26 and 35 years old. Anyone looking at this statistic alone would think that the metal fabrication business has a healthy working population, a

mix of experienced and inexperienced that will help keep the talent pipeline flowing for years to come.

It’s not that simple, of course. Technology remains central to this business, but people drive it, and met-al fabrication depends a lot on mentoring to transfer knowledge from one generation to the next. That’s how the majority of business leaders said they learned, and it’s also how most think the next generation can best learn the trade.

The mentoring goes both ways, especially when it comes to software and machine interfaces. An over-whelming majority—the greatest of any question in this survey—cited comfort with advanced technology and computers as the great strength of tomorrow’s workforce.

But when asked about their shortcomings, respon-dents revealed much-talked-about but still troubling trends: the lack of work ethic and, alongside this, a lack of respect for the manufacturing profession. They also cit-ed lack of training and basic skills, but those are concrete problems. Work ethic and respect are subjective and cultural, and therein perhaps lies this industry’s greatest challenge. At metal fabrication’s core is the communica-tion between the older and younger, between the experi-enced and inexperienced.

Despite these challenges, this is an industry of opti-mists. A majority are optimistic that the industry will receive a higher level of respect from prospective em-ployees in the years to come. Moreover, most leaders are satisfied with their chosen career, mainly because of the variety of work that comes in the door. The job never gets stale. Combine this with the next generation’s comfort with technology, then add a strong dose of mentoring, and you get a recipe for a bright future.

4 The FABRICATOR Special Report • JUNE 2014

Today’s Metal Fabricator

What is Your Job Function?

What is the average age of people in your metal fabricating operation?

0 10 20 30 40 50

0 10 20 30 40 50

18-25

26-35

36-45

46-55

56-65

65 and older

Corporate Management - 32%(President, Owner, CEO, Executive VP, General Manager, etc.)

Manufacturing Production Management - 14%(VP of Production, Facilities Manager, Manufacturing Manager, Plant Manager, Shop Manager, etc.)

Manufacturing Department - 11%(Foreman, Department Supervisor,

Manufacturing Supervisor, Plant Supervisor, etc.)

Other - 30%

Manufacturing/Engineering Management - 13%(VP of Engineering, Director of Product Development, etc.)

Editor’s Note: Of the individuals surveyed for this report, 70 percent work for a contract manufacturer/job shop fabricator, 21 percent work for an end product manufacturer, 5 percent are suppliers of goods or services to the industry, and 4 percent classify themselves as being involved in some other aspect of the metal fabricating industry.

3%

25%

45%

20%

6%

1%

How many years have you worked in the metal fabrication business?

0 5 10 15 20 25 30 35

0 5 10 15 20 25 30 35

0-5

6-10

11-20

21-30

31+

8%

9%

24%

25%

34%

Year

s

How many more years do you think you will work?0 5 10 15 20 25 30 35 40

0 5 10 15 20 25 30 35 40

0-10

11-20

21-30

I don’t think about it much

32%

38%

19%

11%

Year

s

JUNE 2014 • The FABRICATOR Special Report 5

How did you get into the metal fabrication business?

Joined the family business - 14%

Joined the industry after high school - 28%

Joined the industry after obtaining a technical degree from a two- or four-year college - 22%

Entered the business after making a career change - 30%

Purchased or started a metal fabrication company

as a business opportunity - 6%

Deeply Unsatisfied - 0%

Unsatisfied - 1%

Satisfied - 66%

Deeply Satisfied - 33%

How would you describe your career in the metal fabrication industry?

About changing the worldPete AgtucaPresident, Laser Cutting Northwest, Auburn, Wash.

New product ideas penetrate Pete’s soul. They’re what drove him to leave his logistics job at FedEx in the early 1990s, when he discov-ered a new way to con-tainerize air cargo. This led him to his garage, a shear, and a welder—

then to punch presses, press brakes, lasers, more welders, a rented facility with more equipment, and finally to Laser Cutting Northwest’s plant outside Seattle today.

At its core, metal fabrication (and manufactur-ing in general) comes down to an idea, engineer-ing knowhow, and the mechanical ability to make that idea real. How owners use this combination, Pete said, reveals the best and worst of what metal fabrication has to offer.

Customer base diversification is key to a suc-cessful business. A custom fabricator can grow on the backs of a few customers that happen to be in the same or similar sectors. If these sectors go south, so does the business. As Pete put it, “If you’re just a job shop, you’re dependent on the economy and how well your customers are doing.”

Pete didn’t want this, which is why his shop serves a diverse contract fabrication customer base of almost 1,400 companies, about 35 percent of which regularly send the shop orders. He works with local investment groups like Element 8, a clean technology investment organization. There he met the inventors of Flux Drive, a magnetic coupling that could dramatically change the drive industry. He also has launched several of his own product lines, including his latest—Powersails™—which effectively makes wind energy portable.

All these sources of revenue allow him to pursue products and take risks that others just couldn’t. Put another way, this combination—con-tract fabrication and product line development—allows him to grow the value of the business for his family and employees, while also pursuing new products that could change the world.

6 The FABRICATOR Special Report • JUNE 2014

Metal Fabricating: Any Recommendations?

One generation - 59%Three or more generations - 9%

Two generations - 32%

One generation - 73%

Three generations - 3%

Two generations - 24%

Highly recommended

Somewhat recommended

Would encourage a different career

Neutral

How many generations of your family have worked or are working in the metal fabricating industry?

Currently how many generations of your family work at your company?

Would you recommend metal fabricating as a career choice to a friend or a family member?

0 10 20 30 40 50

0 10 20 30 40 50

Lack of available jobs

Lack of defined career paths

Lack of job security

Lack of proper training

Negative connotations about manufacturing in general

Risk of being replaced by automation

Salary/Wages37%

43%

2%

18%

JUNE 2014 • The FABRICATOR Special Report 7

What do you think is the biggest attraction to pursuing a career in metal fabricating?

0 5 10 15 20 25 30 35

0 5 10 15 20 25 30 35

Availability of jobs

Career path to follow and grow

New manufacturing technologies

Problem-solving nature of the job

Salary/Wages

The many different projects that keep the job from

getting stale

10%

17%

14%

21%

4%

34%

What do you think is the biggest detriment to pursuing a career in metal fabricating?

0 5 10 15 20 25 30 35

0 5 10 15 20 25 30 35

Lack of available jobs

Lack of defined career paths

Lack of job security

Lack of proper training

Negative connotations about manufacturing in general

Risk of being replaced by automation

Salary/Wages

6%

12%

10%

18%

30%

7%

17%

Well done, mis hijosEddie and Bryan GarciaVice Presidents, AG Machining Inc., Moorpark, Calif.

Angel Garcia came to this country with next to noth-ing and got his foot in the manufacturing door wield-ing a push-broom. Now he runs a 100-plus employee enterprise.

“He always said, ‘Mi hijo, I’ve been able to reach this level of success, and this isn’t my native country. You guys can do better than I did.’”

So said his son Eddie (pictured at right), who with his twin brother Bryan help run AG Machining, a contract sheet metal fabricator. The fabricator traces its roots back to one day in the 1970s, when Angel, then a machine shop janitor, gazed over at the nearby machine tools. The mill- and lathe-work caught his eye, and a machinist standing by, a Cuban, called over in Spanish, “Hey kid, I’ll teach you.” Whence came a lifelong entrepreneurial passion.

The 28-year-old twins have known the whirr of metalworking machine tools since birth. Their father launched the business the year they were born. Sometimes the boys would wander down to the garage to help Dad. Sure, he would said. Push this button; deburr this part.

The twins didn’t necessarily view their life working in a labor-in-tensive garage shop. But as business grew, so did the technology, the software, the automation—and that’s what drew them to the business. As Eddie put it, “We see the beauty of turning a flat sheet of carbon steel into a product that can be put to good use.”

Angel does right by his name. As his sons describe him, he never stops smiling. “He sees all the positive in every story,” Eddie said. “He doesn’t look at anything as negative. He says, ‘You know, you can make something good out of this.’”

The Garcias make a good business trio, each different but in tune with the others. Angel is the dreamer, the consummate sales-person, the homerun hitter. Bryan lives by the details. “I want to hit consistent singles,” Bryan said. Eddie has a little of both.

The singles matter, though, and the young vice presidents have been hitting plenty, especially when it comes to energy consump-tion and environmental sustainability: LED lights, environmentally friendly chemicals, all-electric fork trucks. And they saved about $10,000 a month by working off-peak hours, when their utility charges more for electricity. As Bryan put it, “For every dollar we’re not wasting, we’re saving, right?”

Eddie chimed in: “I think people have this notion that manu-facturing is just smoke, sludge, waste and dirtiness. Our vision for our company is to have one of the cleanest, [close to] zero-net- carbon-footprint that we can have.”

No wonder Angel, now 51, is smiling. Well done, mi hijo.

8 The FABRICATOR Special Report • JUNE 2014

What About Tomorrow’s Worker?

Trained to a level higher than required - 8%

Lack proper training - 79%

Trained to an appropriate level - 13%

Where should they be getting that training?

Specialized Training Institute - 9%Community College - 6%

Vocational School - 34%(During High School)

Apprenticeships/ On-the-job Training - 51%

What do you think about the training level of young people entering the metal fabrication field, compared

to what is needed for an entry level position?

What do you view as the main shortcomings for tomorrow’s manufacturing workforce?

0 5 10 15 20 25 30 35

0 5 10 15 20 25 30 35

Lack of basic skills (reading, math, communications, etc.)

Lack of industrial technology or engineering training

Lack of respect for manufacturing

Lack of work ethic

Unrealistic views of compensation

Other

16%

22%

18%

33%

5%

6%

What do you view as the strengths of tomorrow’s manufacturing workforce?

0 10 20 30 40 50 60 70 80

0 10 20 30 40 50 60 70 80

Ability to multi-task/ balance several different

projects at once

Ability to work with others

Comfort with advanced technology/computers

Industrial technology/ engineering knowledge

Other

12%

4%

73%

9%

2%

JUNE 2014 • The FABRICATOR Special Report 9

If you could offer advice to the metal fabricators of tomorrow, in what area

do you think your advice would be most valuable?

Sales & Marketing - 8%

Human Resources - 8%

Production - 38%

Technical - 41%

Financial - 5%

Referring to your previous answer, from where did you receive the best preparation

on that topic?

Industry Association - 23%

Apprenticeship/ Mentor - 52%

School (College) - 15%

Supplier - 1%

School (Vocational) - 9%

About the better ideaBill AltmanPress Brake Supervisor, Quality Fabricators Inc., Addison, Ill.

Bill first walked on to the shop floor in the early 1970s—and some-thing connected imme-diately. At first he shad-owed a mentor who showed him not just the math behind forming and flat layout, but how

to make an idea into reality. By shepherding a job though shearing, punching, bending, and spot welding, he saw how he could turn a flat sheet of metal into something useful.

That foundation led to a career that gives him stories to tell, from the early years of manual programming, to the advanced software simulations and controls that permeate the business today. It’s a different world now—but not entirely. Then as now, a curious and engaged worker will go far, and if a young worker is listening, Bill doesn’t hesitate to share what he knows. It supports the very essence of what drew him to the industry in the first place: The act of dreaming up and (perhaps just as important) communicating the better idea. But without a firm grasp of the technical fundamentals, an operator is far more likely to change a preset machine program for the worse. In this business, ignorance is not bliss.

He lives by this at Quality Fabricators Inc., where he’s mentored for the past 13 years. “I take the time with operators to explain everything. I try to mentor when I can. I’m press brake supervisor, but I try to do more than that. I’m willing to share everything, to bring along the next generation.”

The better idea may come from a veteran like himself or from a newbie with fresh per-spective. When this happens, he knows he may be talking to someone who has potential. That new operator has caught what Bill feels is the essence of the business: It’s about the better idea.

10 The FABRICATOR Special Report • JUNE 2014

What does the future hold?

What do you think are the most exciting aspects of the metal fabricating profession in the future?

Material Handling Automation

Bending Technology

Design and Engineering Tools

Laser Technology

3-D Printing / Additive manufacturing

Other

What factor will grow in importance as it relates to running a metal fabricating business?

Cross-training - 42%

Engineering Skills - 13%Fabricating Skills - 26%

Leadership Skills - 13%

Metal Knowledge - 4%Other - 2%

0 5 10 15 20 25 30 35

0 5 10 15 20 25 30 35

8%

7%

30%

16%

33%

6%

JUNE 2014 • The FABRICATOR Special Report 11

Productivity increases have become commonplace in U.S. plants over the past several years.

What will be the greatest source of productivity increases in fabricating in the future?

Are you optimistic that metal fabricating will attain a higher level of respect from the prospective employees?

Somewhat Optimistic - 54%Neutral - 28%

Faster Machines - 7%Cell-based/Lean Manufacturing - 19%

Better-skilled Workers - 44%

Other - 2%

Very Optimistic - 13%

Pessimistic - 5%

Automation of Material Handling/Setup - 28%

This report is the first of a semiannual series on the industry of metal fabrication. If you have comments or would like to see certain topics covered in future reports, contact Group Publisher Dave Brambert at daveb@thefabricator.com.

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