Manufacturing CEOs in NoCo urging B2B collaboration

FORT COLLINS — Manufacturers in Northern Colorado would like to see some business-to-business collaboration to address a labor shortage of engineers, skilled technicians and industrial maintenance employees.

Recruiting and then keeping employees in an industry that has evolved into a bastion of high-tech is a full-time job for most companies because the region has one of the lowest unemployment rates, hovering around 2 percent. And the region’s cost of living — rising due to escalating housing prices — is making recruiting more difficult.

Participants at BizWest’s CEO Roundtable on manufacturing held Thursday in Fort Collins shared ideas on the critical task of recruiting top talent and training employees.

Paul Harter, chief executive of Aqua-Hot Heating Systems Inc. in Frederick,  whose company manufactures heating systems for RVs, school buses, fleet trucks and utility vehicles, offers a training course on skills needed to work for his company and service its products, but he said more can be done for the industry as a whole by forming partnerships.

While some companies rely on search firms to find employees, Harter subscribes to “growing your own” through internships, apprentice programs and advanced education.

“We are partnering with a few companies in the area to cross-train each others’ employees in particular skill sets,” he said.

Terry Precht, CEO of Vergent Products, a contract manufacturer in Loveland, pointed out that the NoCo Manufacturing Partnership — a state-run organization — helps companies share strategies through its networking efforts. He said companies could take a look at creating programs such as sharing employees with each other when work loads vary.

Richard Bisson, CEO of WaterPik Inc. in Fort Collins, said it is becoming more difficult to recruit top talent. He said the churn rate of employees there has increased since he took over 11 years ago.

“Money is the fundamental issue,” Bisson said. “You have to pay up to get talent, and you need to go anywhere and everywhere to find them.”

Bisson said WaterPik needs its engineers and marketing people to be in Fort Collins because both are integrated in product development.

“Engineering and marketing in Fort Collins are critical, but we are forced to find them elsewhere,” he said.

Bisson said he outsources the actual manufacturing of products in order to reduce costs.

“All in China. It’s a massive cost-savings. If we did it here, consumers would have to pay more for our products.”

Bisson said Water Pik’s location in Fort Collins presents a challenge in recruiting and keeping young talent.

“Boulder and Denver are more attractive to millennials, and they need more attention,” he said. “You need to keep having conversations telling them they are doing a great job.”

Dean Herl, CEO of Noffsinger Manufacturing Inc. in Greeley, said his company, which specializes in making chains, belts and sprockets for agricultural equipment, uses a search firm to find its engineers.

“The problem is the cost of living in Colorado. Salaries haven’t caught up with the cost of living.” Herl said Noffsinger has invested in automation for many of its items to reduce payroll costs.

George Newman, director of the precision machining technology program at Front Range Community College, said his group is working on a vision for a regional training center that would produce skilled workers for the manufacturing industry. The center, most likely to be located near Loveland along Interstate 25, would work with manufacturing companies to create programs to produce workers with skills specific to their needs.

“The state doesn’t provide much funding for this type of education because of TABOR, so we will need financial support from the manufacturers,” Newman said. TABOR is the Taxpayer’s Bill of Rights, which limits taxation and spending in Colorado without a vote of the people.

He envisions the center as a hub for manufacturing with a business accelerator, maker spaces and a showcase for advanced manufacturing, including robotics and 3-D printing.

Harter said there is a lot of potential traction for teaching trades.

“We need to be collaborating with high schools and community colleges to create a pipeline of workers,” Harter said.

The health-care debate

Tim Reeser, CEO of Lightning Systems in Loveland, said the cost of health care is harming businesses and their employees, but says the debates among politicians are not addressing the root cause of higher prices.

“Washington is talking about who will pay, but they should be talking about why the cost is so much.

“$30 for an aspirin at a hospital, $41,000 a night in a hospital. … We should be asking hospitals why that is. … Health insurance is a company’s No. 2 expense, right behind payroll.”

Harter said, and others agreed, that the solution won’t come from D.C. “Hospitals hide behind that nonprofit thing — oh, they still make money.”

With consolidation among health-care providers, Bisson surmised that “there’s not enough competition.” He said companies need to educate their employees about cost awareness because “hospitals don’t provide menus with pricing.”

Participants

Richard Bisson, CEO, Water Pik Inc.; Paul Harter, CEO, Aqua Hot; Dean Herl, CEO, Noffsinger Manufacturing; George Newman, director of Advanced Technology Center, Front Range Community College; Terry Precht, CEO, Vergent Products; Tim Reeser, CEO,  Lightning Systems; Moderator: Christopher Wood, BizWest Media. Sponsors: Chris Otto and Mike Grell, EKS&H; Russ Henninger, HUB International; Brian Watkins, Elevations Credit Union.

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