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Minnesota manufacturers face hiring, government woes

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BLOOMINGTON, Minn. -- Minnesota manufacturers say they are doing well, but face twin roadblocks of finding qualified workers and dealing with government-caused uncertainties.

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“As much as we have tremendous pride in Minnesota ... we cannot be complacent,” said Scott Peterson, Schwan Food Co. executive vice president, telling 175 manufacturing officials they can take actions to help solve at least one of the issues: hiring workers.

Many attending Minnesota Manufactures’ Summit said that is one of their biggest concerns.

Peterson, who worked in manufacturing while growing up in Duluth, said that half of Minnesota youths do not realize that better education can improve their employment opportunities. He and others said manufacturers must begin telling high school students that they do not need a four-year degree to land a good career.

“Business have to step up and get involved in the high school level to steer people to get involved in the trades,” said Eric Fisher, operations director for the AGCO farm equipment plant in Jackson.

Tom Wosepka, chief financial officer of Douglas Machine in Alexandria, said he told his children thinking about a liberal arts degree that there is one phrase they must learn: “Do you want to supersize that?”

The message spread at the summit was that Minnesota youths need to understand that some receiving four-year degrees may not finds good jobs, while those trained as welders, machinists and other trade positions probably will land good jobs.

“Attracting some of those skills sets to Alexandria, Minn., has its own challenges,” Wosepka said.

While couples with children may like Alexandria and other greater Minnesota areas, he said, young, single people may opt for places such as the Twin Cities and western North Dakota’s Oil Patch where pay could be much higher.

Wosepka said Alexandria is close enough to the Twin Cities that people easily can go to the bigger cities’ cultural activities such as professional sports and music. But they can live in a smaller community that provides a good place to raise children, he said.

In southwestern Minnesota, where most of AGCO’s 1,300 employees live, the rural area just does not provide enough employees.

Fisher said AGCO, which makes tractors and other farm equipment, is hindered by lack of highly skilled workers such has welders. AGCO has brought in out-of-state businesses to provide workers for such positions, he said, but it would rather have its own employees.

Among AGCO’s solution to the worker shortage is to help develop housing in the area.

Part of the answer to employment problems involves keeping employees instead of hiring replacements.

“We want to promote from within,” Hutchinson Manufacturing President Tom Daggett said.

He, Wosepka and others said they work to retain workers.

“We have a lot of respect and a lot of involvement with our workforce,” Daggett said. “We want to create a career path for individuals; we don’t just want to create jobs.”

Daggett’s firm makes items as varied as 20-foot-wide cell phone models for an amusement park to crane parts used in nuclear power plants.

Many of his workers must have specific, and rare, skills.

“There aren’t any in the state of Minnesota,” he said. “We could advertise until we are blue in the face.”

The key is for businesses may be to do their own training or work closely with colleges.

But one of manufacturers’ biggest problems is out of their control.

“In the short term, there are a lot of uncertainties,” Fisher said, blaming most of it on the federal government.

Several business officials said that firms hesitate increasing hiring because they do not know what will happen on issues such as the federal budget and farm bill.

If government can provide some certainty, Fisher said, businesses will begin to make more plans, which likely will lead to them hiring new workers.

The biggest concern his customers discuss is the uncertainty of health insurance costs, Wosepka. New federal health care laws lead that concern.

Kevin Bengtson of the Center for Energy and the Environment, a former Moorhead city utility official, said that government regulations and other factors make it difficult for businesses to plan for their energy costs.

For instance, government-approved electrical rates are based on a diversified source of energy sources, dominated by coal. However, natural gas prices are falling and utilities’ biggest customers are asking their electricity providers to lower prices by using more gas.

Ten percent of the area’s coal-fired plants are expected to be retired soon, he said.

The question, however, is how much a variety of government regulations will affect natural gas prices.

In Minnesota, a new mandate for some utilities to produce some of their power from solar energy also raises questions about price increases, he added.

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Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.
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