If you’ve lived in Northeast Indiana for some time, you probably know the region has a strong manufacturing sector. But you might not realize how pervasive it is, or what implications it has for the region’s future.
This was the case for Kristin Marcuccilli, who grew up near the “General Motors town” of Marion, Ind., later moving to another GM city, Fort Wayne, with her family. Today, Marcuccilli is President of STAR Financial Group. It was through an interest in supporting regional entrepreneurship and her “geeky” banker’s risk management mindset that she began paying more attention to the state’s manufacturing sector.
In 2020, Marcuccilli participated in an essay project called
FORTHCOMING: Considering the Future State of Our City. She initially planned to write about the importance of entrepreneurship to the region’s future. In her research, she came across data about the region’s robust manufacturing sector, which put its overarching importance into perspective.
“Seven of our 11 counties are in the top five percent of all 3,200 counties nationally for concentration of manufacturing employment or wages,
[1]”
Marcuccilli writes, citing 2019 data. “The manufacturing sector is so extensive it accounts for roughly 30 percent of jobs in the region. In 10 out of 11 counties, that number is closer to 50 percent.”
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SDI helped strengthen the region’s talent pipeline by bringing a separate post-secondary program, NEINFAME, to the region.
Marcuccilli ended up titling her essay
“Awareness,” drawing attention not only to the value of entrepreneurship and innovation in the region, but also to the role these assets play in relation to Northeast Indiana’s manufacturing-dominant economy.
“From a commercial banking perspective, we pay close attention to our clients and how the economy, or other influencing factors, might negatively impact their industry cluster or concentration,” Marcuccilli says. “We want to know when the ‘oil light is on’ and something needs closer attention.”
It’s this thinking she applies to the region’s robust manufacturing sector, questioning: "What might cause the oil light to go on, and more importantly, will we recognize when it happens?"
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If you ask Rachel Blakeman, Director of the Purdue University Fort Wayne Community Research Institute, the oil light signaling trouble for Indiana’s manufacturing sector has been on—and growing increasingly urgent—for decades.
Across the U.S., manufacturing has broadly seen slower growth since the 1990s, but it still
accounts for about 10.94 percent of the total GDP and employs about 8.58 percent of the workforce. Even so, nationally and internationally, most growth in the sector is concentrated in areas of design, services, and software activities, rather than traditional, physical production.
What’s problematic for Indiana, Blakeman feels, is not only that the state has an outsized manufacturing sector compared to the nation, but that its average annual wages are also lower than the national average of $76,580. According to BLS data in 2021, the average annual manufacturing wage in the Fort Wayne metro is $63,571, and across Indiana, it’s $68,886. This indicates
the state and region’s sector is less concentrated in jobs poised for growth, like engineers and researchers, and more concentrated in jobs, like materials production and moving, which aren’t growing—and are likely facing extinction.
“Indiana’s manufacturing emphasis, in general, and Northeast Indiana’s specifically—save the orthopedic cluster in Warsaw that has the full manufacturing ecosystem of corporate, R&D, and production, and a few outliers like Steel Dynamics—has been production jobs (the making-goods part) without the larger corporate presence,” Blakeman says. “We have been very satisfied to get these relatively low-skill, high-wage jobs as they are above average in pay in relationship to the general worker population.”
As technology, automation, and artificial intelligence (AI) advance, Indiana’s lack of diversified, high-wage, high-skill manufacturing jobs could threaten its economic future. In 2019, the
Metropolitan Policy Program at Brooking published a report on automation and AI in the sector,
How machines are affecting people and places. It found that Indiana is the No. 1 state with the most jobs at risk of automation by percentage, “which would be consistent with its overreliance on production jobs,” Blakeman notes.
In fact, on
a list of 381 national metros, two Northern Indiana cities, Kokomo and Elkhart, are No. 2 and 3, most likely to be affected by automation. Fort Wayne is No. 67.
So how are regional manufacturers coping with these realities?
Sara Yarian, Vice President of Culture, Learning, and Development at Metal Technologies, a metal fabricator in Auburn, says automation and industry evolution are on many workers' minds right now. But while topics like these were once considered taboo, threatening to put employees out of work, she says they’re now seen as necessary and beneficial to many employees and businesses.
As health challenges, labor shortages, and demographic shifts roil companies across the country, automation can reduce the physical burdens on employees in difficult-to-fill roles.
“Automation is key, especially in our work environment, where it can be very physical,” Yarian says. “We’re in the process of figuring out how to automate some of our most physically taxing jobs and make those easier for individuals.”
It’s a trend Patrick Buesching has seen developing across many regional manufacturers he works with as Director of Strategic Initiatives for the
Don Wood Foundation. The foundation, formerly known as the 80/20 Foundation Trust, began in 2017 and serves the broader Indiana, Ohio, and Michigan region. It focuses its funding primarily on Northeast Indiana, supplying capital grants, program grants, and scholarships to a range of charitable organizations helping companies and workers obtain the skills, workforce, and equipment needed to grow and innovate.
In recent years, Buesching believes Northeast Indiana’s manufacturing sector, as a whole, has been “pushing, begging, and pleading to get folks trained” in automation, engineering, and other forms of industry evolution.
“I don’t see any reluctance,” he says.
But while the desire to adapt isn’t necessarily lacking, the realities of evolution and the infrastructure needed to support change can be complicated. Buesching says most of the foundation’s funding is currently concentrated on capital grants to help regional employers and schools lay the underlying infrastructure needed to make growth possible.
“You have to provide basic infrastructure, like labs and equipment, so schools and foundations can come in later and provide more advanced programs, relevant coursework, and scholarship support aligned with employer needs,” Buesching says.
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SDI currently employs about 12,000 people across its 80+ national locations, headquartered in Fort Wayne.
Determining how to adapt efficiently and effectively is key. Yarian says Metal Technologies has its own capital plan in process to invest in automation. The first phase will complete in 2023. It already has various training, apprenticeship, and employee development opportunities to help workers upskill and expand their education through regional schools.
“We have a pay-for-skills program, so as you gain skills, you also increase your pay,” she says. “We also offer education assistance, and we were the first manufacturing business in Indiana to offer a 529 matching plan for college savings.”
The company has found ways to automate and take some of the heavy lifting out of workers’ jobs, too.
“But we are still a work in progress,” Yarian says. “We work with a lot of different parts, all with different sizes and weights, so it’s a matter of figuring out: How can we create a robot to understand every different product we do? It’s not the same product coming out every single time. It changes daily—sometimes by the shift—so having technology that’s adaptable to different specifications will be key.”
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Figuring out how to evolve with very precise and flexible technology is a challenge shared by
Fort Wayne Metals. It produces extremely fine wires—sometimes to a tenth of a human hair—as well as strands and cables that can be used in devices, like pacemakers, and in other industries, like aerospace.
About four years ago, Fort Wayne Metals hired Advanced Manufacturing Manager, Bastien Carel, to help lead the company into its next phase of growth. Carel was born in France and spent about 15 years prior working in the aerospace industry. He now manages a team of three employees doing data collection at Fort Wayne Metals to streamline operations and implement new technology around advanced manufacturing and smart factories.
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Bastien Carel, Advanced Manufacturing Manager, at Fort Wayne Metals.
Carel describes “industry 3.0,” a recent, third phase of the Industrial Revolution, as automation and human intervention, which Fort Wayne Metals has largely already addressed. The company has the capability of making and modifying its own machinery, which produces its products. While it has machines that require manual set-up, the machinery is largely automated and managed by operators who study the product to ensure its quality and collect data accessed by computer screens.
This is where “industry 4.0,” the fourth phase of evolution, comes into play, which Carel and his team are working on. It’s focused not only on automating processes, but also on acquiring data and knowledge from new systems and technologies to further adapt and streamline operations.
“That’s what we’ve really tried to focus on the past couple of years: Capturing data from our processes and equipment and transforming and leveraging that data into knowledge,” Carel says. “It’s a long process, but we’re well on the way. We’ve captured data from nearly 200 pieces of equipment allowing us to collect information and feed it to our engineers and operators.”
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Bastien Carel, Advanced Manufacturing Manager, right, works with Brad Peffley, Wire Drawer, using new technology that provides real-time & historical data via a web interface that collects data from 70-80 machines.
One challenge facing Fort Wayne Metals goes back to its “secret sauce,” says Evan Wood, Ph.D., Vice President of People and Strategy. Because it is a “made-to-order” company, it needs machines to be highly flexible and extremely precise on specs that can vary widely order-to-order, while also trying to make efficiency gains where possible.
“Some of our technology needs to be adaptable to different and constantly changing sizes,” Wood says. “One of Carel’s hardest roles is getting machinery to accommodate hundreds of different sizes of product, for example, a .004-inch wire machine to take on its next job, which might be a .0005-inch wire (five ten-thousandths). Achieving this flexibility and deciding where to focus resources is still an emerging area of this technology, and we’re living in that.”
While advances, like automation and data collection, require a learning curve for companies, they also create the potential for greater adaptation and productivity. This, in turn, can help companies create more jobs and increase wages for employees, Wood points out.
“So I see automation as a driver of job and wage growth, not the opposite,” he says.
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Evan Wood, VP People & Strategy, at Fort Wayne Metals.
Fort Wayne Metals is currently hiring production staff, many of whom will draw wire, and starting them at $24.53 per hour. In addition, hourly employees who elect to work an alternative shift are eligible for a shift differential of $1.50.
“Those are $50,000-plus-a-year jobs, and your training and skills go up from there,” Wood says.
Along with working their way up the ladder internally, employees at Fort Wayne Metals can take advantage of a company program that offers tuition reimbursement for bachelor's degrees. With this, they can advance their education in manufacturing—or “any degree, no questions asked,” Wood says.
Along with the small data collection team, the organization has more than 100 employees in high-wage, knowledge-based positions of R&D, IT Data, Business Excellence, Process Engineering and more. Just last year, Fort Wayne Metals applied for an Indiana Economic Development Corporation's Manufacturing Readiness Grant through Conexus Indiana, supporting Indiana-based businesses in deploying digital, advanced technology in manufacturing, and they were awarded the maximum grant amount.
“Working with Conexus, we realized the feedback they gave us was: You guys are way ahead of companies about your size in Indiana and outside of Indiana,” Wood says. “It’s good to hear—that we are well on our way.”
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Blake Nicol, left, Senior Process Engineer works with Brad Peffley, Wire Drawer, using new technology that provides real time & historical data via a web interface that collects data from 70-80 machines in the one building in the Avionics Building.
The COVID-19 pandemic helped further this trend. While Fort Wayne Metals previously had a tenured workforce, many workers decided to retire during the pandemic, Wood says. This, along with new growth, sent the 1,300-person company into a hiring blitz in 2022 where it was bringing on as many as 15 new employees per week. It will have about 1,400 employees by the end of the year.
Training new workers and upskilling tenured workers is another challenge facing many manufacturers, which has been exacerbated by the pandemic, on top of new technology. Wood says while tenured employees at Fort Wayne Metals once had two years to learn new processes and tech, they’re now needing to upskill in under six months.
“The hardest piece for employees to learn is not the equipment or the technology producing the wire,” Wood says. “It’s the software side of it, the computer skills. We’re learning that’s what takes the longest.”
This speaks to another barrier facing many companies. Even when automation and data collection can be achieved, finding workers to fill more advanced engineering and software roles in a rapidly evolving sector is a challenge in and of itself.
About a year ago, Metal Technologies was looking to fill two Controls Engineer positions, which are high-tech roles, and it was successful—but it took a long time.
“It’s hard because there’s not enough of these employees out there,” Yarian says.
At Fort Wayne Metals, Wood says his two hardest roles to fill are automation engineers and developers, specifically trained in Microsoft Dynamics AX. While the company seeks to promote from within and hire locally, he says these roles are driving an increase in out-of-the-region hiring.
“Having strong engineering schools, like Purdue, Purdue Fort Wayne, and Indiana Tech, in Indiana, gives us an advantage,” Wood says.
But knowledge- and data-based workers are in such high demand everywhere that Fort Wayne manufacturers are competing globally for talent—and across industry sectors.
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As President and CEO of the Don Wood Foundation, Laura Macknick says recruiting, training, and retaining the next generation of manufacturing workers is a challenge many regional employers, schools, and funders are working together to address.
One of the most-influential capital projects the Don Wood Foundation has funded toward this goal is collaborating on the development of the
Whitko Career Academy in Whitley County.
“We recognized that Whitley County, specifically, has a tremendous need for skilled workforce in the space of advanced manufacturing, yet it lacked a career and technical education center within a reasonable drive time for students attending schools there,” Macknick says. “Through several community convenings and conversations, we partnered with the Whitko Community School Corporation, the local government, and public and private donors to provide the seed funding to create this academy. Now, the Whitko Career Academy is the most recently designated CTE District by the State of Indiana with a focus on advanced manufacturing and elements of Industry 4.0 integrated into its lab spaces.”
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SDI helped strengthen the region’s talent pipeline by bringing a separate post-secondary program, NEINFAME, to the region.
Buesching notes that it is not only harder to find and develop tech and engineering employees, but also, harder to lure them back into resource-restrained classrooms where they can share their knowledge with students, professors, and trainees.
“We hear all the time how much of a challenge it is for schools, like Ivy Tech, to get people to train in Industry 4.0,” he says.
Oftentimes, grade-school programs, like Junior Achievement’s JobSpark and
3DE, help bridge the gap between regional students and employers. Chloe Myers, Human Resources Generalist at Steel Dynamics (SDI), says Junior Achievement’s 3DE program for area high schools helps her team connect directly with students at a younger age, answer their questions, and let them know what opportunities exist in manufacturing and the skilled trades.
“3DE is a program where students of a select grade level are given the opportunity upfront to provide a solution for a case challenge set forth by a company,” Myers says. “We recently met with 400 students from North Side High School, and our case challenge was: How do we fill the talent pipeline for Steel Dynamics?”
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Employees at Steel Dynamics in Fort Wayne.
SDI currently employs about 12,000 people across its 80+ national locations, headquartered in Fort Wayne. But Myers explains that, during the next several years, some of these facilities will be facing up to 70 percent retirement rates.
“We’re not concerned about filling these positions because we do have strong brand recognition,” Myers says. “But moving forward, we would like to find a way to continue that momentum.”
About two years ago, SDI helped strengthen the region’s talent pipeline by bringing a separate post-secondary program,
NEINFAME, to the region, in partnership with other companies, including Fort Wayne Metals, Metal Technologies, and other regional companies, like LH Industries and Zimmer Biomet.
The NEINFAME, short for Northeast Indiana Federation for Advanced Manufacturing Education, connects students with employers to sponsor their pursuit of two-year degrees at Ivy Tech locally. In addition to attending class part-time to earn their degree, students get mentorship and paid work experience from employers.
“Upon completion of the program, students have a high probability of no student debt, and the option to continue to earn a bachelor’s degree,” the website says.
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When it comes to the future of Indiana’s manufacturing sector, technology and talent are only part of the risk-management puzzle. It also calls for questioning what types of businesses and growth are being incentivized by Indiana’s systems and reducing jobs most susceptible to replacement, like goods-producing and moving, in favor of jobs poised for growth, like research and development (R&D).
Blakeman points out that, even prior to the pandemic,
Indiana’s rate of college-going high school seniors had been in decline, likely undersupplying tech- and engineering-oriented talent pools in the state and giving companies with tech and R&D jobs less incentive to locate in Indiana.
“You aren’t creating the ‘jobs of tomorrow’ with workers being trained for the jobs of yesteryear,” she says.
State incentives and tax infrastructure in Indiana reward physical buildings and production equipment, too.
“Just look at the property tax abatement structure,” Blakeman says. “If low taxes were the answer to all our problems, we should have higher wages 20 years into the experiment, but we don’t. The market rewards higher skills, and we’ve puttered out at high school diplomas plus certificates. If taxes were the top concern of tech-heavy employers, companies like Google and Apple would have vanished from California and New York. They have not. They aren’t coming here because we don’t have the resources they need right now: Bachelor’s degree holders or other workers with these specific technology-driven skills.”
As cities like Kokomo are susceptive to losing up to 50 percent of their industries, due to automation and industry evolution, these concerns become increasingly important to Indiana’s future.
One benefit of working for a diversified manufacturing company, like SDI or Fort Wayne Metals, is that they employ multiple types of professionals, allowing for upskilling and mitigating risk as some roles are replaced by AI.
As a large, yet lean organization, SDI allows for R&D on the job, too, Myers says. She explains that the company is “extremely bottom up,” founded on the principle that people doing the work firsthand know it best, and therefore, should be the ones making decisions about their jobs.
“There are very few corporate-down directives, which is different than many manufacturing facilities,” she says. “That’s what makes us so successful as a company; We don’t turn down anyone’s ideas. That’s how, after starting in 1993, we are a Fortune 200 company in 2022.”
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Steel Dynamics, Inc., (SDI) is an American steel producer based in Fort Wayne, Indiana.
SDI’s open-door policy and encouragement to innovate can lead to opportunities for budding entrepreneurs, as well.
“For example, we recently opened a state-of-the-art steel mill in Sinton, Texas, and we had a machine that would not run properly,” Myers says. “The part needed to get the machine running had a year-and-a-half backorder. So, in true Steel Dynamics spirit, it was a mechanical engineering employee who manufactured his own replacement part, and it’s still in production today.”
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As the manufacturing sector continues to evolve, regional companies and industry players are making concerted efforts to collaborate and build more culture around growth and innovation here.
Yarian and Buesching point to efforts, like
Noble County Economic Development Corporation’s first-of-its-kind Industry 4.0 Lab in Kendallville, housed within its Community Learning Center. While the lab is still getting off the ground, it offers students and adults alike the opportunity to learn about technologies, including autonomous robots, machine learning, additive manufacturing, and the Industrial Internet of Things. The Don Wood Foundation contributed a more than $470,000 grant toward this project.
Yarian believes that as evolution continues, there’s increased opportunity for sector-wide collaboration, as demonstrated in NEINFAME.
“We’re competing for the same talent, so if we can start growing the talent together, it’s better for everyone,” she says. “We’ve all realized the talent pool is only so big, so we’re going to have to be creative.”
The Don Wood Foundation also considers itself a convener, bringing together multiple companies, nonprofits, educators—even other foundations—to address shared challenges. A collaboration with the Muncie-based George and Frances Ball Foundation has resulted in the expansion of solutions, like the
Work Matters program, which helps justice-involved individuals leaving the prison system find work in manufacturing in Delaware County. As a result, these pilot programs can be leveraged in other areas, like Allen County, and implemented more quickly.
Overall, Macknick remains optimistic about the state of Indiana’s expansive manufacturing sector. She sees one prominent path forward as continuing to bolster engineering and Industry 4.0 education locally, so the region might retain more homegrown talent—and the advancements they can bring to the industry.
“If the Don Wood Foundation can partner with more engineering programs at local colleges and universities, where now you’ve got students learning on Industry 4.0 automation and robotics manufacturing equipment, those students are going to be better positioned to stay and work in the area and carry this knowledge forward,” Macknick says. “If more engineers learn here and stay here to work, that might help drive additional desire to grow R&D in the state.”
This story is part of a series highlighting the faces and stories of economic development in Northeast Indiana, made possible by underwriting from NiSource Charitable Foundation and Junior Achievement of Northern Indiana.