Call to Order and Roll Call
The 1st meeting of the Interim Joint Committee on Labor and Industry was held on Tuesday, June 21, 2011, at 10:30 AM, at the Mazak Corporation in Elsmere, KY. Senator Alice Forgy Kerr, Chair, called the meeting to order, and committee staff called the roll.
Present were:
Members: Senator Alice Forgy Kerr, Co-Chair; Senators Denise Harper Angel, Ernie Harris, Kathy W. Stein, and Jack Westwood; Representatives Will Coursey, C. B. Embry Jr., Bill Farmer, Richard Henderson, Dennis Horlander, Wade Hurt, Joni L. Jenkins, Adam Koenig, Terry Mills, Mike Nemes, Tom Riner, and Brent Yonts.
Guests: Ed Hughes, President, Gateway Community and Technical College; Richard Jordan, Chairman of the Board, Gateway Community and Technical College; Brian Papke, President, Mazak; Blair Schroeder, Northern Ky. Chamber of Commerce; Mike Vogt, Vice President for Human Resources, Mazak; Steve Stevens, President, Northern Ky. Chamber of Commerce; Senator David Williams
LRC Staff: Linda Bussell, Adanna Hydes, and Carla Montgomery.
Senator Kerr welcomed members and guests to the first meeting of the 2011 legislative interim and said Co-Chair Representative Rick Nelson was unable to attend the meeting because of the flooding in Middlesboro. Senator Kerr recognized and thanked Senator David Williams for attending the meeting.
Senator Kerr thanked the Northern Kentucky Chamber of Commerce for inviting the committee to meet in Northern Kentucky as part of its Northern Kentucky United event, and Mazak officials for hosting the meeting. Senator Kerr extended special thanks to Representative Koenig for facilitating the meeting at Mazak.
Northern Kentucky Chamber of Commerce
Steve Stevens, President, Northern Kentucky Chamber of Commerce, was recognized to make brief welcoming remarks to the committee. Mr. Stephens said he appreciated the committee travelling outside of Frankfort to learn more about another part of the state, especially the business community. He commented that Mazak was critical to the manufacturing sector of the economy in Northern Kentucky and was excited that the committee was meeting at the plant to learn more about Mazak and its economic impact in Kentucky.
Mr. Stevens said Northern Kentucky is making an economic recovery and the unemployment rate is not a good indicator of what is actually occurring. He said job postings maintained by the Chamber have increased remarkably over the past five months particularly in areas of distribution, logistics, and manufacturing. He said there has been a big increase in employer requests for bilingual workers which present a challenge because Northern Kentucky is not a very diverse population. He said increased employer participation at job fairs is another sign that the economy is recovering. At recent job fairs, employers representing a broad cross-section of industries all had positions they were trying to fill. This is a significant increase from last year.
Mazak Manufacturing Plant
Brian Papke, President of Mazak, said Mazak is headquartered in Japan. He said Mazak is widely recognized as the premier machine tool industry worldwide. Mazak manufactures precision metal-cutting machines that make other things. Mazak has been in Northern Kentucky since 1974 and has expanded its operations 14 times and employs about 600 people in Kentucky. The company has transformed from a “rust-bucket type of company” to a “high-tech company”, which means that skilled workers are needed to do the jobs at Mazak.
Mr. Papke said Mazak represents agriculture, construction, and mining industries. He said businesses that make machinery in those industries are doing very well in this economy because there is currently a wonderful opportunity to export worldwide. Mazak is also a supplier of machines to medical, aerospace, automotive, oil and gas industries, and other companies that cut precision parts for machines.
Mr. Papke said one of major concerns of manufacturing companies, like Mazak, is the lack of skilled workers. He said individuals have been convinced not to go into manufacturing because of the belief that it was all going off-shore. He said this country, not China, still produces more goods and services than any country in the world. Manufacturing is coming back, but manufacturing today is high-tech and trained skilled workers are needed for those jobs.
Another concern is the airport in Northern Kentucky. Mr. Papke commented that the existing airport is no longer a first-class airport and transporting people from around the world in a timely manner is a concern.
Despite the concerns, Mr. Papke said the future appears bright for Mazak and manufacturing.
In response to a question from Senator Kerr, Mr. Vogt, Vice-President for Human Resources, Mazak, commented that welders, electrical and chemical assemblers, and machinists represent some of the skill-sets needed by Mazak. He said that Mazak has had a strong workforce and low worker turnover through the years, but many workers are retiring and that is adding to the difficulty of attracting and maintaining skilled workers. Mr. Vogt said the state is doing a better job in recognizing the need to invest in the existing manufacturing base in Kentucky. He said while such investment might not create one new job, it will greatly assist in retention and expansion of existing jobs. He commented that high school students are not getting the proper guidance about advanced manufacturing jobs.
Gateway Community and Technical College
Ed Hughes, President, Gateway Community and Technical College, and Richard Jordan, Chairman of the Board, made a presentation on the college as well as the needs of the manufacturing community. Mr. Jordan stated in order for manufacturers to be competitive, the labor needs have changed. Formerly, manufacturers needed 10% to 20% skilled workers; however, currently some manufacturers need 80% to 90% of their work force to be skilled workers. The average annual wages for these skilled workers is $51,000. Projections indicate that by 2018, 62% of all jobs will require some post-secondary education or training.
Some challenges in having a skilled workforce are that the workforce is aging and the image of manufacturing is poor.
Gateway has 45 to 50 apprenticeships with five different companies. Manufacturing jobs are available and Gateway’s mission is to partner with manufacturers to get workers trained in appropriate skills.
In response to a question from Senator Kerr, Mr. Jordan stated that many companies use a temporary service to evaluate an employee’s work ethic before hiring on a permanent basis. In response to a question from Senator Stein, Mr. Jordan said that students are paid while being trained by their employer. There were discussions of learning plans and evaluation of skills at an early age.
Representative Koenig thanked the committee and co-chairs for the meeting at Mazak.
Senator Kerr announced that the next meeting would be held on July 21 in Frankfort.
There being no further business the meeting adjourned.
Tour of Mazak Plant