Wisconsin Regional Training Partnership (WRTP)

With a focus on three company/union partnerships:

Milwaukee Brush/ United Steelworkers (USW) Local 9040
Milwaukee Cylinder/ International Association of Machinists (IAM) Local 908
Oilgear Company/ IAM Local 1845.

Program Synopsis

WRTP is a non-profit membership organization that helps small and medium-sized enterprises expand employment and advancement opportunities, upgrade the skills of incumbent workers, and recruit and retain qualified job candidates.  Some 150 Milwaukee-area employers, including 80 manufacturing companies, are currently members of WRTP.

The Wisconsin AFL-CIO and its affiliated unions created the WRTP in the early 1990s, in cooperation with the Greater Milwaukee Committee (representing area employers), in response to waves of layoffs and plant closings in the region’s large manufacturing sector.  WRTP has since expanded its projects into other sectors, including construction, health care and services.
 
WRTP provides its members specialized products and services spanning four general areas:

• Consulting: to facilitate the implementation of new technologies and work processes designed to improve quality, productivity and other bottom-line measures of performance
• Training: to facilitate access to external resources and services that enhance the education, training, advancement, and employment security of incumbent workers
• Staffing: to assess, prepare and place a diverse pool of qualified workers for job openings
• Retention: to improve retention and advancement of incumbent employees.

This case study examines WRTP’s recent work in these four content areas with three, small- to medium-sized, Milwaukee-area, unionized manufacturers:

• Milwaukee Brush’s goal was to maintain domestic production in the face of low-wage overseas competition by cutting costs and boosting quality and delivery times.
• Milwaukee Cylinder’s goal was to compete in an increasingly competitive domestic market for hydraulic equipment by developing new products for specialized applications.
• Oilgear’s goal was to absorb new work from Texas, increase output, slash lead times and maintain (or lower) costs.

This case study examines the ways in which WRTP helped these companies and unions work together to meet these goals and describes the outcomes achieved for each of the companies.

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Workforce Challenge

Responding to small and medium size firms’ and/or facilities’ (those with less than 500 employees) recruitment and training needs:In recent years, large, formerly vertically integrated firms have aggressively embraced the outsourcing and subcontracting of many of their component parts.  In the process, they have made their own operations leaner and meaner, while pushing significant parts of the production process to firms that are typically smaller.  These smaller firms generally have fewer resources to commit to training and education programs and/or new employee recruitment.  Many small and mid-sized firms have no full-time human resources managers, and their education and training programs often consist of tuition reimbursement policies, where individual workers must take the initiative to obtain additional education and training on their own.  To promote cost-effective new worker recruitment and incumbent worker training within these smaller firms, initiatives that facilitate common training, assessment, screening, etc. for jobs at small and medium size manufacturers are especially important.  Cross-employer skills training – while always desirable – can help ensure, in a cost-effective way, that workers in smaller firms get the skills they need to compete in the global economy.  Training and education programs should link to economic development policies that respond to the needs of sectors, industries and local or regional economies.  

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Understanding the Demand and Meeting It

Wisconsin’s manufacturing economy is still reeling from the economic upheavals of the 1980s, which wiped out, in one decade, fully one-third of Milwaukee’s manufacturing jobs. 
The 1990s and early 2000s saw continued erosion in Wisconsin’s industrial base.  Heightened global competition caused many Milwaukee-area plants to close or move production to facilities outside the United States.  According to the Small Business Administration, 40% of manufacturing workers in Wisconsin work in firms of less than 500 employees.  The median salary in manufacturing in Wisconsin is $55,000, topped only by engineering.

The companies examined in this study were under severe economic pressure when they began to partner with WRTP in 2002 and 2003.

• Milwaukee Brush – a manufacturer of wire brushes for various industrial and commercial applications – was losing $1 million a year and facing tremendous cost and quality pressures from overseas producers.
• Oilgear Co. – a manufacturer of hydraulic pumps, motors, valves and servo-electric controls – had laid-off 20% of its workforce and was staging periodic plant shutdowns.
• Milwaukee Cylinder – a producer of specialty-application hydraulic cylinders – saw its revenues decline by 33% and its employment levels drop 30% between 1999 and 2003. 

The overall average wage for the three companies is $17.00/hour.  All three companies provide health care, pension, vacation and sick leave benefits.

All of these partnerships were initiated at the suggestion of union business agents who recognized the need for change in the way they related to the companies.  Because they have such a good relation with WRTP, they recommended that the Partnership facilitate these changes.  WRTP develops and maintains close relationships with the business agents of member companies.  The Partnership’s experience demonstrates that technical training alone has limited value in boosting productivity without a change in relations inside the shop, and that achieving this change sets the stage for the delivery of training by the Wisconsin Manufacturing Extension Program, one of the partners in WRTP’s work in the manufacturing sector. 

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Program Partners

WRTP served as the intermediary, working with three firms and their unions:

• Milwaukee Brush and United Steelworkers (USW) Local 9040
• Milwaukee Cylinder and International Association of Machinists (IAM) Local 908
• Oilgear Company and IAM Local 1845.

Much of the technical training was provided by the Wisconsin Manufacturing Extension Program (WMEP).  WMEP is part of a nationwide network of not-for-profit centers, linked together through the Department of Commerce's National Institute of Standards and Technology.  Using WMEP created considerable capacity sharing, as companies did not need to start from scratch in developing a curriculum for the training.

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Program Activities and Methods

Since the role of WRTP as an intermediary is critical to this case, a focus on how the Partnership operates is important.  It is also important to note how the WRTP approach was adapted to meet the needs of each of the target companies.

WRTP Internal Structure

A “Leadership Team,” overseen by a Board of Directors, manages the day-to-day operations of WRTP.  The Team consists of an Executive Director, Program Manager, Administrative Manager, Union Representative, Director of Special Programs and the Director of BIG STEP, a construction apprenticeship program.

Three teams work under and report to the Leadership Team:

• Industry Coordinators -- direct contact with unions and companies, conduct needs assessments and negotiate creation of programs
• Administrative Team -- manages WRTP finances, grant reporting and grant administration
• Employment and Training -- works with community based organizations, employers and unions on programs including displaced workers, recruitment, pre-employment training and incumbent worker training.

WRTP Mission: Family-Supporting Jobs

Employers must meet certain criteria to become members of WRTP.  They must not depend heavily on temporary employees, and there must be a clear path and demonstrated commitment to transition temporary employees to permanent employee status.

WRTP’s stated mission is to promote “family-supporting jobs.”  Member companies must pay at least a “living wage,” defined as $8 an hour with benefits or $13 an hour without benefits.  Workplace conditions must be safe and healthy, and turnover must be low.  The majority of WRTP members are unionized companies.

Fitting Programs to Company Needs

Every two years, WRTP surveys its membership, conducting a needs assessment, a demographic survey of the work force and a review of work place conditions.

When a member company or union requests WRTP assistance, program staff immediately contact both management and the union to ensure that both parties are ready and willing to work together.  If a potential partnership is deemed viable, WRTP helps the parties identify their needs in terms of future workforce requirements, incumbent worker training, and modernization and process improvement.

The companies are asked a series of questions about their workforce needs, including whether they are looking to hire or to upgrade the skills of their current workforce.  

From the start, however, WRTP aims to create a genuine, functioning labor-management partnership to oversee the programs.  The Partnership’s philosophy is that if the workers are not equal partners in workforce change right from the start, the program will not succeed.

WRTP pursued this standard approach in its work at Milwaukee Brush, Milwaukee Cylinder and the Oilgear Co., creating joint labor-management leadership teams and small, focused discussion groups involving management and labor, from the shop floor, up.  However, the work sites differed in terms of the composition of the work force, the relations within and between labor and management, and the business needs of the enterprise.  While many of the activities WRTP guided and helped implement at the work sites appear similar, they unfolded in different ways and led in different directions.

The three workforces are similar in age and size:

• 65 USW members at Milwaukee Brush
• 65 IAM members at Milwaukee Cylinder
• 99 IAM members at Oilgear
• Average seniority at Milwaukee Brush and Milwaukee Cylinder is between 20 and 25 years; at Oilgear the average is 17.5 years.

They differ sharply by race and gender:

• At Oilgear and Milwaukee Cylinder, 99% of the workforce is white, male and English-speaking, with only a few African-Americans, Hispanic workers and women.
• At Milwaukee Brush, 50% of the work force is Hmong or Laotian and the remainder is mainly African-American, with some Russian, Hispanic and native white Caucasians.  The Milwaukee Brush workforce speaks eight different languages and is evenly divided between men and women.

WRTP involvement began very differently at the three locations.

• At Milwaukee Brush, labor-management relations until quite recently resembled “open combat,” according to a USW representative.  The German-based parent company, Pferd, terminated all but one local manager in the strife-torn shop.  Instead of proposing to shutter the money-losing facility, Pferd proposed to extend its the lease on the shop for five years, and they offered the USW a new five-year contract that included annual raises plus a ‘gain sharing’/pay-for-knowledge plan to reward employees for mastering new skills.  (The company also committed to spending $50,000 of its own money on work-related English language training for its workers.)
  
  While Pferd Milwaukee Brush and the USW had joined WRTP in 1997, they had never initiated any partnership activities.  In agreeing to the new five-year contract in 2002, the USW joined management in inviting WRTP into the shop to help restructure the business.

• At Oilgear, management made a novel proposal to IAM District and Local leaders in 2002.  The company offered to address its overcapacity problems by closing a non-union plant in Texas and consolidating production at its unionized Milwaukee facility.  The offer hinged on the union’s willingness to negotiate work rule changes and adopt other measures to promote “lean production” and improve product delivery times.  (Labor costs were 15% lower in Texas, but Oilgear needed to maintain or lower production costs, even while paying Milwaukee’s higher union pay scales.)  The IAM, which had a decent working relationship with Oilgear, responded by asking management to meet with the WRTP.
• In 2002, at Milwaukee Cylinder, the union and management realized the need to change.  Inefficient scheduling, poor planning, and a decline in customer satisfaction made change an absolute must in order to have a viable long-term business.  IAM leaders invited WRTP to address their local union meeting.  After meeting the WRTP staff, IAM members voted overwhelmingly to agree to a new cooperative work relationship with management.  Milwaukee Cylinder, which historically has had a decent working relationship with the IAM, agreed.

Building consensus/Building trust

The change from top-down management to a collaborative working relationship is stressful and difficult, even at shops like Milwaukee Cylinder and the Oilgear Company, where management and the union agree that “decent labor relations” historically prevail.  As WRTP experience shows, in this process, people on both sides, at all levels, are asked to give up traditional prerogatives and learn new roles, a change that can be very threatening.

It is inside the joint leadership teams and small shop floor focus groups that workers and managers learn to debate and pinpoint problems and possible solutions.  It is here – in the very earliest stages of the process – that people who have never collaborated, who sometimes have fought for years and may be deeply skeptical of the need for (or possibility of) workplace change – are gradually convinced.

The labor-management team must identify participants’ skills, commitment, trust levels and needs. The team can then build trust and buy-in by involving people in the discussions and actual implementation.  Participants with experience on these teams caution, however, that when team leaders ask for help in changing a practice, they must be prepared to accept advice.

Accountability and producing visible results are also vital to building trust and buy-in.  In WRTP projects, participants learn to set deadlines, define processes and create plans and schedules.  The union credits WRTP for teaching how to run meetings, elicit commitments and produce results. 

Transparency in the process is also important.  Charts are often posted in prominent places in the shop, so everyone can see the decisions that were made, the target dates for each step of the projects and the actual progress of the work. 
 

Similar programs/Different directions

WRTP-guided training and education programs at each location are tailored to meet the needs and objectives of the particular worksite.

Training at all sites was on-site and company-paid and included certificates for technical training, including set-up, electrical work, hydraulics and machine operations.  Most of the technical training was provided by WMEP, which makes available the technical assistance of specialists who have had experience on manufacturing floors and in plant operations in the development and delivery of training and process improvement for manufacturers.

Workers receive certificates from plant managers showing that they completed training in such skills as set-up reduction, blueprint reading, and set-up and operation of various machines.  While none of the training was for academic credit, or performed outside of the shops, certificates documenting proficiency in various manufacturing skills and equipment clearly have value in applying for jobs in other manufacturing settings.

Training and education activities, which differed based on the needs of the companies, included:¹:
 

• Contextual reading skills, using shop forms, safety labels, etc.
• Shop Math skills
• Set-up Reduction
• 5-S Quality Improvement
• Value Stream Mapping, leading to reorganization of shop into work cells
• Total Production Maintenance
• Blueprint reading
• Production and Quality Metrics
• Problem Solving
• Leadership skills

All the workers benefited from these improvements through their Profit Sharing Plans and the Pay-for-knowledge programs.  Their bonuses were increased as a result of improved productivity.  An example is Milwaukee Brush, where 23 job classifications were reduced to six.  To perform the new job descriptions, workers had to be trained.  While there was no certificate for the training, it did qualify workers for the Pay-for-knowledge program.  The wage increases across the companies ranged from a low of $.10 to a high of $.70 per hour.

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Connections to Public Workforce and Economic Development Systems

While WRTP participates on state and local workforce and economic advisory boards, the primary public involvement in the three featured companies was provided by WMEP. Manufacturing Extension Partnerships (MEPs) are a nationwide network of not-for-profit centers linked together through the Department of Commerce's National Institute of Standards and Technology Centers and are funded by federal, state, local and private resources to serve manufacturers.  Using the services of the MEP program makes it possible for even the smallest firms to tap into the expertise of knowledgeable manufacturing and business specialists all over the United States.

Public funds from the Wisconsin Governor’s Council on Workforce Investment are often tapped by WRTP, and in the three projects in this case study, those funds were made available for training (see Program Funding below).  In the case of Milwaukee Cylinder, a $44,000Federal Mediation and Conciliation Service (FMCS) grant was also used to fund a move into a High Performance Work Organization.

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Program Funding Sources

WRTP funding

A combination of public funds and grants supports WRTP.  In addition to the public workforce development funding mentioned above (Manufacturing Extension Program; Federal Mediation and Conciliation Service; and Wisconsin Governor’s Council on Workforce Investment), WRTP receives funding from the City of Milwaukee (Community Block Development Grant), Milwaukee Public Schools, Milwaukee Sewerage District and the Wisconsin Department of Transportation.  Grantors include the Anne E. Casey Foundation, Charles Stewart Mott Foundation, Forest County Potawatomi Community Foundation, Greater Milwaukee Foundation, Harley-Davidson Foundation and the Helen Bader Foundation.

Program funding

In the case of the three companies in this case study, state training grants of $17,000 to Milwaukee Brush, $21,000 to Milwaukee Cylinder and $30,000 to Oilgear Co., as well as the assistance of the WMEP in delivering the training were the primary sources of support.  As indicated above, in the case of Milwaukee Cylinder, a $44,000FMCS grant was also used to fund a move into a High Performance Work Organization. 
 
In-kind contributions for these particular programs were also substantial.  In each of the three companies, the employer paid employees’ wages during their participation in training and labor-management relations committees.  The three companies also paid a fee to WRTP related to the administration of the state incumbent worker grants  

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Barriers Overcome 

The small and medium sized employers all stressed how difficult it is for small shops to take people off the job and devote time and money to meetings during working hours, or to worksite visits to other firms to inspect and learn from different practices.  The low cost of WRTP (and WMEP) training, and the emphasis on well-run, results-oriented meetings, mitigated this problem.  The key, managers said, is learning that the time and money taken from production today produces permanent changes that yield higher productivity and earnings, improved labor relations and enhanced worker motivation. 

Union leaders emphasized how difficult it can be to adjust to new roles in the workplace.  Members may be uncertain about how far their new jurisdictions extend and what kind of new authority they have.  Adjustments may be difficult and confidence may have to be built.  For example, requests to engage in cross-training can trigger fears of job elimination and layoff.  Requests to partner with management can cause fear that managers will attempt to co-opt or to trick the union.  The fact that WRTP staff members (and WMEP instructors) are former union workers with shop floor experience was key to overcoming many of these fears.  Benchmarking trips to other union work sites helped show union members that collaborative efforts could work without eroding union protections.  Union concerns were also calmed by company moves to bring new work to the shop (at Oilgear and Cylinder) or to install new managers and sign new contracts providing pay raises (at Milwaukee Brush).

Adjusting the expectations of managers and labor leaders.  Both managers and union leaders must alter their traditional roles and collaborate more effectively to reach common goals.  Managers must abandon their customary role of giving orders, and union leaders their more reactive roles.  Both sides must also guard against transforming their “team “into yet another layer of management, hobbled by a rigid structure and disconnected from shop floor workers and managers.  Leadership team members must be accountable to shop floor personnel, with whom they should meet regularly.  Those on the shop floor, in turn, can generate ideas and plan and carry out tasks, but they need to hold themselves accountable for results.  Similarly, WRTP staff has had to learn to be flexible enough to allow workers and managers to take ownership of the process, yet also able to provide guidance when necessary.

Getting “buy-ins” from shop-floor workers and line supervisors.  Paradoxically, those who have traditionally had the least power in the work place often feel they have the most to lose when confronted with change.  Because many shop floor workers and managers have witnessed top-down, short-term efforts to “transform the workplace” that created as many problems as they solved, these participants may have to be convinced of the program’s seriousness.  Steady, one-on-one-work, emphasizing visible results and genuine participation of workers and line supervisors, is the best way to secure the commitment of those affected and involved.

Overcommitment.  WRTP strives to assess available resources, and to search for viable alternatives, before committing to members’ requests for assistance.  For example, several member companies wanted WRTP to organize a pre-employment training program for welders.  On closer examination, WRTP discovered there were not enough training sites available with the proper equipment, nor was there an adequate pool of potential trainees with the required skills and background.  Committing under these circumstances would have frustrated the students and short-changed the employers.  In this case, WRTP is exploring an on-the-job training program, developed with the union and management, with partial funding through Commerce or WIA grants.

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Program Results and Returns to the Stakeholders

All three locations have created empowered, self-directed work teams in which shop-floor workers and managers collaboratively plan and schedule work, training, and the ordering of machinery, tooling and supplies.  For the 2003-2004 time frame:

Milwaukee Brush reports:

• 30% reduction in scrap
• 95 -100% on-time delivery rates (up from 70% in 2004)
• Lead times on some jobs cut to 40 minutes (down from 11 – 12 days)
• 70% basic math comprehension levels (up from 49%)
• Doubling in shop-related reading comprehension among Hmong, Laotian and other non-English speaking employees
• $50,000 profit in 2005 (up from $250,000 deficit in 2004)
• Improved labor relations (no grievances filed in past 8 months)
• The addition of a third shift, with six new hires.

Milwaukee Cylinder reports:

• 20–30% higher productivity
• Lead times reduced by 60-72%
• 88% on-time deliveries (up from 27% in 2000)
• New hiring
• Domestic production for a sister company abroad, now accounts for 8% of shop’s business and created five new hires
• A move into High Performance Work Organization, with a $44,000 FMCS grant administered by WRTP.

Oilgear Company reports:

• 25–30% reduction in set-up times (saving the company some $100,000 annually)
• New work and product lines coming into shop
• New capital investments in shop
• Stabilized employment.

Benefits to the Employer:

• Increased productivity due to higher worker motivation and enhanced skills, particularly in cross-training and teamwork.
• Lower supervisory costs due to fewer grievances and a flattened internal structure.  At Milwaukee Brush, for example, there is now one supervisor on first and second shift, and no supervisor on third shift because the work team leader manages at night.
• Lower training costs: Rather than relying on outside consultants or off-site instruction, WRTP stresses on-site, low-cost training and teaches the labor- management teams to formulate and implement their own solutions.  As one plant manager said, “We’re developing our own in-house capabilities, not becoming dependent on consultants.”
• Improved quality, customer satisfaction and higher sales: All three companies report higher levels of production, with faster turn-around times and new orders and business.

Benefits to Employees:

• Job security: Prior to the WRTP-guided partnerships, all three companies were laying off workers and in danger of closing.  Employment is now either stable or growing at all three locations.
• Higher wages: Labor agreements at all locations include pay-for-knowledge plans that compensate employees who master new skills.  At Milwaukee Brush the plan was developed subsequent to the labor/management partnership.  The company had 23 job classifications that they reduced to 6.  With that new flexibility they were able to institute pay-for-knowledge.  Pay for knowledge was already in place at Milwaukee Cylinder and Oil Gear, and both companies were able to enhance the provision through productivity increases.  At Milwaukee Cylinder, “Process Cell Lead” positions were created and pay was linked to performance reviews.
• Portable certificates/Enhanced career opportunities: Employees at all three locations receive company-paid training, on company time and receive certificates for mastering various technical skills.
• Greater job satisfaction: Rather than taking orders and pushing buttons, employees at all locations are involved, on an equal basis with managers and engineers, in creative thinking, problem solving, planning and decision-making.  Workers feel a genuine sense of ownership, participation, responsibility, empowerment and respect.

Benefits to the Unions:

• Enhanced capabilities: Beyond negotiating contracts and processing grievances, union leaders at the three locations are now responsible for a broader range of challenging activities.  Union leaders at all levels must now understand and effectively participate in the day-to-day operations of the shop and in helping plan the future of the enterprise.  Union leaders have had to master new areas of knowledge and develop new capabilities.  As one union leader pointed out, “We keep our contractual work separate from our partnership activities, but the professionalism and skills you develop in one area definitely carry over to your work in the other.”
• Stronger standing with union members: As a result of the English language training at Milwaukee Brush, Hmong and Laotian members (who comprise 50% of the bargaining unit) are now attending union meetings and becoming active in the life of the union.  Every day, union members of all nationalities, at every shop, can see how the union’s work with WRTP and plant management is improving job security, job quality and the overall health of the business.
• Greater stature in the community: The program has allowed the companies to maintain their operations and the communities in which they are located.  While layoffs and plant closings are happening elsewhere, the communities benefit from sustainable employment at relatively high wages in a union environment.
• Increased likelihood of membership retention:  Keeping jobs in the state means less likelihood that the unions will lose members in layoffs. 

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Next Steps for the Stakeholders and/or for the Participants

• Aims to create a permanent third shift, with six new permanent, full-time employees.  (It recently added a third shift with six temporary workers).
• Is considering buying a new building with an additional 25,000 square-feet of floor space.  (It leases its current building).
• Plans to invest some $3.7 million on new machinery.

• Is pressing forward with intensive HPWO training, including weeklong off-site sessions at the IAM’s national education center.
• Is considering beginning computer training at a regional technical college.

Oilgear Company:

• Is “closely considering” adopting the HPWO model of operations.

For more information, contact Tom Burress at tburess@workingforamerica.org or info@workingforamerica.org.