Toyota Kentucky Tackles a Tool-and-Die Worker Shortage

Wally Palen saw a spate of retirements coming, and knew he had to plan ahead or end up in hot water.

In 2013, Wally Palen realized he had a “people problem.” Tool and die makers at Toyota’s Georgetown, Kentucky, plant, where he is assistant general manager, were disproportionately reaching retirement age, and replacements were hard to come by.

Looking ahead, the workload was only getting heavier. With a cascade of new vehicle models at Toyota—from the recently introduced to the forthcoming—the need for new dies is currently the highest in 25 years, and projected to grow even more. Yet 36% percent of Toyota Kentucky’s 200 tool and die makers are already at or near retirement age. The percentage goes up to 43% by 2021.

So the affable Ohio State University graduate—who oversees Toyota’s die manufacturing operation and 19 stamping lines—set about coming up with a contingency plan. He estimates he’ll need 52 more toolmakers by 2021, but will only be able to find 15 through traditional HR.

The rest? He’s angling for 32 of them to come through a new apprentice program he got going with “brute force” (his words), and five from retraining promising production team members.

Palen shared his approach in April with a group of manufacturing leaders—some from mom-and-pop tool shops, some from OEMs—concerned about shortage of tool and die makers in the U.S. They assembled in Grand Rapids, Michigan, for a summit on the issue, sponsored by the Center for Automotive Research.

Starting with HR

To bring in his new crop of skilled workers, Palen started with the obvious: “What do you do? You call HR and say, ‘Hey, I need some toolmakers. And they say, ‘OK, let’s go get some.’ … They try really hard.”

Toyota’s HR people interviewed 393 applicants and delivered 63 new hires from 2013 to 2016. Some applicants gave up after they took the online test, and didn’t show up for the in-person assessments. Some failed the electrical component of the assessment, or the manufacturing skills assessment.

Still coming up short, Palen began looking for other ways to find good people. He and his team started by tweaking the technical prerequisites, eliminating the electrical skills requirement and changing up the manufacturing skills assessment to take into account people with strong aptitude that could train on welding and hand skills.

“We took some people we normally wouldn’t have taken before,” he said.

He also approached the local trade school, Bluegrass Community and Technical College (BCTC), about coming up with a certified tool and die apprenticeship program for the state of Kentucky. It wasn’t cost-effective for the school to run the program on its own, so Palen’s team developed their own curriculum and secured millions of dollars of government and corporate funding for a dedicated tool and die training center a mile from the plant. (It’s a satellite campus of BCTC, so it trains tool and die makers for other companies as well.) They also worked with vendors so BCTC could buy used, discounted equipment for training.

In addition to investing several million dollars in the training center, Toyota invested $500,000 for BCTC to hire trainers.

Apprentices don’t get an entirely free ride: They’re initially on the hook for $11,147 in tuition but receive some of that back if they earn good grades. They spend the first 18 months of the program attending school two days a week at the training center, then work three days a week for Toyota tool and die, where they’re paid $15 to $19 an hour.

Then they’re assessed again. Once they clear that hurdle, they work 12 more months in the Toyota plant, earning $19 to $22 an hour to meet the apprenticeship requirements for certification.

If they’re hired full time after the 30-month apprenticeship, they earn a starting salary of 50K to 70K.

High School Strategy

To get the word out about the apprenticeships, the Toyota crew also set out developing a high school pipeline. Palen’s right-hand recruiter, Jack Lewis, travels to local high schools to educate students on tool and die skilled trades as well as careers in general maintenance. Thus far, Lewis has talked up the programs to 1,000 students, and 111 have applied for apprenticeships.

Adults are part of the educational mix, too. High school counselors who work within 60 miles of the plant get invited to a luncheon and plant tour. And Palen enlists high school superintendents as advisors to the apprenticeship program, to help make sure it meets state requirements and recruits from a diverse pool of students.

Students need ACT scores of 19 in math, 18 in English and 20 in reading to qualify for the apprenticeship programs, “so we try and set that expectation up front,” says Palen.

Sometimes, however, the best talent is right in front of you. Palen keeps an eye out for production team members that have the aptitude and interest to move into tool and die. In the fall, he plants to bring back an old program, the Skilled Team Member Development System.

“Our original team members [at Toyota Kentucky] were all trained and skilled by master craftsmen,” he says. “They went to Japan for 12 to 18 months to learn their skill and craft.” Rather than sending trainees to Japan, however, he’d bring in experienced trainers from the technical college and elsewhere.

“I’ve had several team members come in—young guys that really want to move into the skilled trades—and I don’t have a path for them right now.” There are no female tool and die apprentices at Toyota Kentucky yet, though Palen says he’s doggedly trying to recruit them.

“I’m not confident yet, but I think the direction’s good where we’re going,” he muses. “My story’s not difficult to repeat: The hard part is having the tenacity to get it rolling, and to partner with the right people.”