Choosing whether to issue temporary layoffs is one of many decisions Pat Greene has had to contend with as the head of Cascade Die Casting Group Inc.
Greene serves as president of the Cutlerville-based Tier 2 auto supplier, which provides a range of die casting services to Tier 1 clients like Magna International Inc. and Robert Bosch GmbH.
Primarily because of the microchip shortage and subsequent production slowdowns and volatility in orders, Cascade Die Casting Group has realized that bringing on a full staff everyday doesn’t always make sense.
“The Tier 1s are saying, ‘Just be ready, (orders are) going to come again soon,’” Greene said. “We use this time to make sure we have adequate inventory, but just being ready is kind of an expensive position to be in.
“You’re standing by with everyone, fully staffed, with no orders coming in. If you already have the inventory, what do you do at that point?”
Still, Greene has opted to protect what is arguably his most important asset: his workforce. And he’s not alone. Similar to segments across manufacturing, auto suppliers are working through a debilitating labor shortage that has put talent at a premium.
Issuing temporary layoffs, as many manufacturers have done throughout the COVID-19 pandemic, can sometimes pose challenges for employers when it comes time to reel workers back to the job when orders rebound.
“We have not resorted to layoffs like some of the big Tier 1s have, and we really feel — in today’s labor environment — that it’s prudent to manage around that,” Greene said. “Reducing overtime is a big step we can take and also making sure that we have our staffing needs met.”
While the pandemic didn’t create the labor shortage, it has forced many manufacturers, including auto suppliers, to look at their workforce through a new lens.
“This isn’t new — the labor shortage existed before COVID,” Greene said. “It will continue as we go forward, and I think it’s just really important that we pay attention to taking care of our employees and creating a culture where they feel appreciated.”
A ‘different conversation’
As vice president of technical services for West Michigan economic development organization The Right Place Inc., Justine Burdette and her team work with a wide range of manufacturers — including many of the local Tier 2 and 3 auto suppliers — to solve a variety of problems.
Lately, workforce issues have topped that list. Burdette is finding a shifting workplace philosophy as she speaks with C-Suite executives at these companies.
“It’s a very different conversation today than it was maybe 18 or 20 months ago,” Burdette said. “I do think the favor right now is with the employees and the talent. People have finally recognized — we say it all the time, but there is truly an emphasis and understanding behind it — that your most valuable asset is your talent and your labor pool. I absolutely have been seeing our employers responding differently than they have in the past.”
In some cases for talent-strapped auto suppliers, a slowdown in orders has been somewhat of a blessing in disguise. Trying to produce at pre-pandemic levels could potentially spread understaffed manufacturers too thin.
“The fact that they had a slowdown or not as many orders as they anticipated is actually OK because they were thinking, ‘If I do get those things, where is the labor going to come from?’” Burdette said. “I have heard that from a couple of our auto suppliers, but I wouldn’t say that’s a trend by any means. Just anecdotal evidence.”
Tier 1 automotive supplier Denso Corp. has followed suit in its approach to prioritizing workforce. At the company’s thermal manufacturing facility in Battle Creek, where it has been located for 35 years, Denso has never involuntarily laid off employees, including during the pandemic last spring.
In fact, Denso paid employees to stay home for a period.
“They’re our most valuable resource, so it was crucial that we put their fiscal and physical safety first, while ensuring their job security,” said Kevin Carson, president of Denso’s thermal manufacturing facility, where it produces automotive air conditioning and engine cooling components and systems. “This has helped us quickly ramp up production in support of the automotive industry’s recovery and in responding to customer demand.”
Similar to other manufacturers, auto suppliers must compete for talent, putting the onus on each employer to make their company as attractive as possible. This doesn’t necessarily start and end with higher pay.
“Employers, including Denso, need to do everything they can to demonstrate how they support their employees and give them chances to succeed,” Carson said. “It’s why we’ve offered onsite vaccination clinics, continue to provide world-class manufacturing training, and give people opportunities to not only get a job, but grow their professional skills and careers.”