Apprenticeships That Make Money? Not As Impossible as it Seems-Part 1 of 2

Part 1 of 2: The European Difference

Dean Prigelmeier, President of Proactive Technologies, Inc.
I had dinner with a friend of many years, Günther Hauser, in his hometown of Neckarsulm Germany. I met Günther several years ago when Proactive Technologies, Inc. (“PTI”) was working on a project in South Carolina that required PTI staff to travel to the LÄPPLE manufacturing plant in Heilbronn, Germany where Günther was the manager of the apprenticeship program. During that dinner, our conversation naturally drifted to an area of shared interest; worker training and apprenticeships and the differences in the United States and European systems of workforce development.

LÄPPLE is a worldwide supplier of press parts, autobody shell components, standard parts and rotary tables as well as automation solutions. They employ over 2000 people and provide exclusive, sophisticated solutions in forming and car body technology as well as the engineering and design of automation systems, machines and tools. Some of their customers include many of the automobile manufacturing companies such as Audi, BMW and Volkswagen.

While working on the Heilbronn project, PTI staff performed job/task analysis on several job classifications that were being duplicated at a new joint venture in Union, South Carolina including Press Operator, Press Technician, Maintenance, Quality Control, Assembly Operator and Assembly Technician. Günther was kind enough to take me on a tour of the apprenticeship center at the plant. The center had around 100 apprentices at any one time at various stages of progression. Modeled after the manufacturing plant where it was established, the group of young workers were processing in each of their disciplines of choice; CAD-CAM Engineering, Tool & Die, Quality Control, Machining. It was like a mini-manufacturing facility with the LÄPPLE factory.

Those apprentices in their final 2 years of study, I was told, were treated like a part of a Tool & Die Manufacturing center. When an order came in for a die, either from LÄPPLE or one of its customers or suppliers, the process started with designing the die, machining the die components, assembling the die, inspecting the assembly and shipping the die to the customer. Instead of making “key chains and donkey carts” like apprentices are often asked to make in the US as their “hands on” training, these apprentices were producing an actual product that was sometimes priced as high as USD1 million!

Of course, these apprentices were paid while in their program. Much of the wage came from the government, while the company paid for the facility, equipment, instructors. But LÄPPLE, like many European apprenticeship hosts, learned how to leverage the work produced by apprentices in honing their skills for paying for the costs to host the program. And when an apprentice completes the program,  LÄPPLE gets first pick of the class. The other apprentices have proved their skills enough to be immediately hired by one of many manufacturing facilities in the area aware of the program and its high standards of apprenticeship.

For European-style apprenticeships, each apprentice continues through their “K-10” education before focusing on an apprenticeship area, after having narrowed the field with relevant courses 4 years prior. The apprentice focuses on rigidly supervised training to finish the apprenticeship in 2-3 years. Some may take an out-of-country assignment in their trade for another two years as offered by their apprenticeship host. Once completed, they would be eligible for continued training in management with some additional “college-level” courses.

The advantage of this rigid, yet flexible, system is in the continuity of learning. Europeans, I am told, tend to live and work in their hometown. If they are laid-off, which happens less often than in the United States, or the plant closes they might simply decide to retire earlier than expected rather than uproot their families and start all over with a new job, new employer. This stability builds a strong loyalty toward employers because of the longevity of employment and potential for advancement – something that used to exist in the United States decades ago.

However, due to the success of their structured career training, Europeans have not seen the need, and consequently have very little experience with adult learners as in the United States, where it is a major source of specialty training as careers currently average 3-5 years at best for a large number of employees. The Europeans are finding that their system doesn’t have an easy access for individuals returning for retraining or career shifts later in life. Perhaps globalization will encourage the Europeans to think those scenarios through as the same pressures on worker wages, pensions, changes in demographics, influx of immigrant labor and changes in employment longevity become reality.

When I was told the story of how the LÄPPLE apprenticeship program worked in 2007, typical in many ways to European apprenticeships, I was amazed and overwhelmed by the contrast with those in the United States. Familiar to the state of apprenticeships at that time, I saw no similarities. The US version was a dreadfully ambiguous 7-8 year program modeled after obsolete templates. I remembered I knew a very few people who were in a US apprenticeship program, and even fewer people that ever finished them. I also knew many employers had no interest in hosting one.

When the U.S. Department of Labor – Bureau of Apprenticeships changed its guidelines in 2008 to allow “Competency” and “Hybrid” models as well as the old time-based model, an opportunity surfaced in the United States for more willing employers to host apprenticeships that are focused on actual work to be performed and training that can be completed in 4-5 years. For visionary companies, perhaps some of the subassembly work could be done by apprentices on company equipment rather than outsourced as in the LÄPPLE model.

One challenge might be that the quality of the apprenticeship program is sacrificed for the urgency in increasing the number of apprenticeships. Another might be that until the U.S. apprenticeship programs are functioning efficiently and clearly display that the benefit far exceeds the cost, they may remain vulnerable to economic shifts. For example when employers are paying the wages of apprentices, this might be a problem during industry slowdowns like we often see in cycles. Accountants might be swayed to treat the hosting of an apprenticeship as a “cost” not a “long-term investment.”

I learned from my dinner with my friend Günther and his wife, Irene, that towards the end of his 49 year career with LÄPPLE and right before his retirement, the company had a lot of pressure on the apprenticeship program to perform like the other profit centers of the company. With a 4 million Euro budget and revenue goals to match, it seemed the priority drifted from training skilled workers and more towards meeting budget goals.

Maybe a balance can be reached by innovative United States business leaders, and the temptation to sway from the primary purpose of an apprenticeship resisted. New metrics detailing the value-added and the opportunity costs eliminated would be a better measurement of a successful apprenticeship.

Come to think of it, maybe it is too early to worry about that in the United States. We have a long way to go to catch up to European-style apprenticeships. There is no time like the present. For more information on how to set up a cost-effective, high return on investment apprenticeship, click here.

Coming in the next issue: Part 2 of 2 – Setting Up an Apprenticeship Center