[Senate Hearing 115-152]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 115-152

                        CLOSING THE SKILLS GAP 
                   AND BOOSTING U.S. COMPETITIVENESS

=======================================================================

                                HEARING

                               BEFORE THE
                               
                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 29, 2017

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation
                             
                             
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
TED CRUZ, Texas                      AMY KLOBUCHAR, Minnesota
DEB FISCHER, Nebraska                RICHARD BLUMENTHAL, Connecticut
JERRY MORAN, Kansas                  BRIAN SCHATZ, Hawaii
DAN SULLIVAN, Alaska                 EDWARD MARKEY, Massachusetts
DEAN HELLER, Nevada                  CORY BOOKER, New Jersey
JAMES INHOFE, Oklahoma               TOM UDALL, New Mexico
MIKE LEE, Utah                       GARY PETERS, Michigan
RON JOHNSON, Wisconsin               TAMMY BALDWIN, Wisconsin
SHELLEY MOORE CAPITO, West Virginia  TAMMY DUCKWORTH, Illinois
CORY GARDNER, Colorado               MAGGIE HASSAN, New Hampshire
TODD YOUNG, Indiana                  CATHERINE CORTEZ MASTO, Nevada
                       Nick Rossi, Staff Director
                 Adrian Arnakis, Deputy Staff Director
                    Jason Van Beek, General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
                      Renae Black, Senior Counsel
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 29, 2017...................................     1
Statement of Senator Thune.......................................     1
Statement of Senator Nelson......................................     2
Statement of Senator Baldwin.....................................    43
Statement of Senator Capito......................................    45
Statement of Senator Klobuchar...................................    47
Statement of Senator Cortez Masto................................    49
Statement of Senator Markey......................................    50
Statement of Senator Inhofe......................................    52
Statement of Senator Duckworth...................................    54
Statement of Senator Cantwell....................................    56
Statement of Senator Blumenthal..................................    57
Statement of Senator Johnson.....................................    59

                               Witnesses

John Ratzenberger, Actor, Director, and Founder, American Museum 
  of Manufacturing...............................................     4
    Prepared statement...........................................     6
Rory DeJohn, Senior Vice President, Turner Construction Company..     7
    Prepared statement...........................................     9
Colonel Michael Cartney, (USAF, Retired); President, Lake Area 
  Technical Institute............................................    11
    Prepared statement...........................................    13
John J. Neely III, Vice President, Law and Public Affairs, 
  Gulfstream Aerospace (A General Dynamics Company)..............    28
    Prepared statement...........................................    29
Judith Marks, Chief Executive Officer, Siemens USA...............    34
    Prepared statement...........................................    36

                                Appendix

Response to written questions submitted to Rory DeJohn by:
    Hon. Dean Heller.............................................    65
    Hon. Maggie Hassan...........................................    65
    Hon. Catherine Cortez Masto..................................    66
Response to written questions submitted to Colonel Michael 
  Cartney by:
    Hon. Dean Heller.............................................    66
    Hon. Todd Young..............................................    67
    Hon. Tammy Baldwin...........................................    69
    Hon. Maggie Hassan...........................................    72
    Hon. Catherine Cortez Masto..................................    74
Response to written questions submitted to John J. Neely III by:
    Hon. Tammy Baldwin...........................................    76
    Hon. Maggie Hassan...........................................    76
    Hon. Catherine Cortez Masto..................................    77
Response to written questions submitted to Judith Marks by:
    Hon. Tammy Baldwin...........................................    77
    Hon. Maggie Hassan...........................................    77
    Hon. Catherine Cortez Masto..................................    80

 
                        CLOSING THE SKILLS GAP 
                   AND BOOSTING U.S. COMPETITIVENESS

                              ----------                              


                       WEDNESDAY, MARCH 29, 2017

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:05 a.m. in 
room SD-G50, Dirksen Senate Office Building, Hon. John Thune, 
Chairman of the Committee, presiding.
    Present: Senators Thune [presiding], Fischer, Moran, 
Heller, Inhofe, Johnson, Capito, Gardner, Young, Nelson, 
Cantwell, Klobuchar, Blumenthal, Markey, Booker, Peters, 
Baldwin, Duckworth, Hassan, and Cortez Masto.

             OPENING STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    The Chairman. Well, good morning. We are here today to 
discuss a very important issue for the U.S. economy, and that's 
the technical skills gap among our workforce.
    According to multiple surveys, employers are actively 
looking for skilled workers to fill available, well-paying jobs 
and they simply can't find them. As we will hear in detail from 
our witnesses today, there are numerous reasons for this, 
including a decline of technical education programs in public 
high schools; an increase in the number of baby boomers 
approaching retirement; a negative perception of the 
manufacturing sector among some potential employees, especially 
among those in younger generations; and an increased emphasis 
on 4-year college enrollment to the possible detriment of more 
technical training.
    These factors and others are creating a skills gap that is 
most pronounced in industries requiring a labor force with 
technical skills, like manufacturing, construction, and the 
energy sector. In South Dakota, having a skill and being able 
to work with your hands is common for most folks. But that 
mentality was formed from necessity. In rural America, 
oftentimes, you need to be able to fix things for yourself when 
they break.
    Over time, this need has led to a natural respect for the 
men and women who focus their lives on those trades. In order 
for our country to remain competitive, we need to promote this 
perspective and work together to highlight the importance of 
the skilled trades to the very foundation and strength of our 
economy.
    This hearing is intended to explore the causes of the 
skills gap but, just as importantly, highlight efforts by 
advocates and industry to address it. John Ratzenberger has put 
smiles on the faces of children and adults alike from his work 
on Cheers and numerous animated Disney Pixar movies. But today, 
he is here because of his passionate belief that America's 
greatness is connected to our ability to manufacture and his 
recognition that we need skilled workers.
    Getting young people interested in working with their hands 
and familiar with tools from a young age is an important first 
step. A focus on technical education is part of the solution. 
It is no surprise to me that a South Dakota institute, the Lake 
Area Technical Institute, is leading the pack in training 
students to fill these skilled jobs.
    Lake Area Tech is the winner of the 2017 Aspen Prize for 
Community College Excellence, the Nation's foremost recognition 
of high achievement and improvement in America's community 
colleges. An overwhelming 99 percent of Lake Area Tech's 
graduates are employed after graduation. And once they enter 
the workforce, these graduates earn an average of 27 percent 
more than other new hires in the region.
    It is wonderful to see the work that Lake Area Tech and 
other community colleges and career and technical education 
programs are doing to train students for jobs that are 
available and lucrative. I look forward to hearing more about 
Lake Area Tech's programs in Colonel Cartney's testimony.
    In addition to education pathways, U.S. employers are 
leading the charge in addressing this issue. Many companies 
have started training programs or fostered partnerships with 
local community colleges to try to improve their workforce 
pipeline and mitigate the impact of the skills gap.
    This engagement is not limited to college partnerships. 
Many companies looking for future employees are finding 
innovative ways to engage K-12 students in STEM education. I 
look forward to hearing from the panel on what is being done on 
this front, what types of programs or models are working well, 
and what challenges remain.
    Finally, it should be noted that the Federal Government 
partners with state and local communities and organizations to 
fund education, apprenticeship, workforce, and manufacturing-
related programs, including at the Department of Commerce and 
the Federal Aviation Administration. The issues we will explore 
today affect industries and agencies that span the Committee's 
broad jurisdiction.
    Getting Americans back to work and in good-paying jobs is a 
key priority of the Committee and will remain an area of focus 
as we approach the legislative agenda ahead. I want to thank 
our panel of witnesses for being with us today and for taking 
part in that effort, and I look forward to hearing your 
testimony.
    Senator Nelson?

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Thank you, Mr. Chairman.
    During the height of the recession, when unemployment was 
hovering around 10 percent, we noticed something surprising, 
that the unemployment rate for recently separated veterans was 
consistently higher than the national average. This was 
unexpected, because folks coming out of the military are highly 
trained for technical jobs--air traffic controllers, combat 
medics, airplane mechanics--and technically trained 
professionals at the time were in high demand.
    What was happening was that these veterans were receiving 
world-class training, but not the right civilian certification 
or credentials to be eligible for the same job that they once 
had in the military. There was a small gap in their education. 
So we fixed it. We introduced legislation, the Veterans Skills 
to Jobs Act, and the Department of Defense now helps service 
members get these credentials and certifications so that they 
are qualified to get a job as soon as they leave the military.
    An abundance of technical jobs presents a big opportunity 
for civilians as well, but the skills gap for them is even 
wider. Companies today are having a hard time finding qualified 
job applicants for technical positions. As many as 13 million 
U.S. jobs require technical or STEM skills, but not a 4-year 
college degree.
    On one hand, more Americans than ever are attending 
college, and many are graduating with crippling student loans. 
On the other hand, companies are desperate to fill well-paying 
technical jobs that require some training, but less than a 
bachelor's degree. It is clear there is a mismatch between our 
education system and industry's workforce needs.
    This skills gap in the workforce affects the bottom line of 
big and small companies. On the Space Coast of Florida, small 
and large companies alike are working with community colleges 
to build a pipeline of technically trained employees so workers 
can hit the ground running on the very first day. These 
positions aren't what we normally think of as blue-collar. 
These folks are helping to build and launch NASA's new Space 
Launch System, the largest rocket ever built. Siemens, whose 
CEO is here, has similarly implemented apprenticeship programs 
across the country for machinists, welders, and other skilled 
positions.
    Aggravating this problem is the stigma about blue-collar 
jobs. High school students choosing between university or 
technical training need to know that many manufacturing workers 
are well paid and highly sought after. We have to do a better 
job of changing attitudes when it comes to the perception of 
technical education and manufacturing jobs.
    The bottom line here is that we--educators, industry, and 
all levels of government--must do everything we can to better 
prepare our workers for the job market of today and tomorrow. 
Failure, we cannot contemplate. We have to expand job 
opportunities for American workers and make sure that we have 
the skilled labor that we need.
    Our witnesses, as you have already indicated, Mr. Chairman, 
are leaders in industry and workforce training, and I look 
forward to hearing them.
    Thank you.
    The Chairman. Thank you, Senator Nelson.
    We'll turn to our panel now. We'll start on my left and 
your right. As I mentioned, John Ratzenberger is a carpenter, 
actor, director, and the founder of the American Museum of 
Manufacturing; Mr. Rory DeJohn is a Senior Vice President at 
the Turner Construction Company; Colonel Michael Cartney, who 
is retired from the U.S. Air Force, is the President of the 
Lake Area Technical Institute in Watertown, South Dakota; Mr. 
Jay Neely is the Vice President of Law and Public Affairs at 
Gulfstream Aerospace; and Ms. Judith Marks is the Chief 
Executive Officer at Siemens USA.
    So a great panel. We're delighted to have you here. We look 
forward to hearing from you. If you could confine your oral 
remarks to as close to 5 minutes as possible, we will keep the 
record open to include anything else that you want to have 
entered into the record, as that will maximize the opportunity 
for members of the Committee to ask questions.
    So we'll start with Mr. Ratzenberger and proceed across the 
panel from there.

 STATEMENT OF JOHN RATZENBERGER, ACTOR, DIRECTOR, AND FOUNDER, 
                AMERICAN MUSEUM OF MANUFACTURING

    Mr. Ratzenberger. Thank you, Senator, and thank you for 
your interest in the problem that we're facing. I was a 
journeyman carpenter. I actually helped build the stage at 
Woodstock, so you can blame all the mess on me.
    [Laughter.]
    Mr. Ratzenberger. This great country of ours, this land we 
call the United States of America, was founded and nurtured on 
two basic guiding principles: freedom and the ability to use 
that freedom to build the finest civilization yet seen on 
Earth. We built this nation guided by our imaginations and the 
skills we learned from our elders.
    We cut our own timber from saws we made ourselves from the 
ore we mined using tools that we machined and honed on machines 
that we built from scratch with our own hands. We drew, 
measured, and shaped the tools we needed to build our homes, 
the villages, towns, and cities in which we lived.
    We traveled from place to place in vehicles we built and 
maintained ourselves to harness the pulling power of the 
livestock given to our use and care. We used our hands to build 
the barns, fences, and corrals that kept our animals protected 
so that we could feed our families with food we grew ourselves 
in fields plowed with more tools that we designed and proudly 
crafted.
    We were always a nation of builders, tinkerers, and 
craftsmen that met each and every task and challenge with 
hands-on skills that were passed from generation to generation. 
We built our own ships that gave birth to the United States 
Navy, the same ships that fought the Barbary pirates off the 
coast of North Africa when Thomas Jefferson was president.
    We used the same time honored skills to construct the 
battleships and landing craft that were necessary for our 
victories on D-Day as we pushed the Nazi nightmare back and 
extinguished the flame of evil so that our children could live 
in peace. We made every one of the weapons carried by our brave 
men and women throughout our history to protect the place that 
we call home.
    With our own hands, we designed and constructed a rocket 
ship that landed us on the Moon and launched the satellites 
that transmit our cell phone signals from one place to the 
next. We used our hands to construct medical equipment that has 
saved millions of lives worldwide. Make no mistake. We are the 
peacekeepers of the world because of our manufacturing might. 
Manufacturing is to America what spinach is to Popeye.
    While future generations might have to explain that 
analogy, we in the year 2017 understand that without tinkerers, 
builders, and manufacturing throughout the land, we are 
rendered spineless and helpless. Manufacturing is the backbone 
of Western Civilization. Everything we do every single day is 
reliant first on someone's ability to not only put a nut and a 
bolt together, but to make that nut and bolt in the first 
place.
    I have always known these truths to be self-evident because 
I grew up in the once mighty industrial town of Bridgeport, 
Connecticut, surrounded by people who knew how to design, 
build, fashion, make, repair, and maintain anything you wanted. 
My uncles proudly boasted of their ability to hone a piece of 
metal down to one-five thousandths of an inch as though the 
fate of Western Civilization depended on it. As a 10-year-old, 
I thought it was funny.
    But as I got older and a tad more sophisticated, I realized 
that my uncles were absolutely right. The fate of Western 
civilization rests entirely on our ability to make things. The 
world would get along just fine without actors, reality stars, 
musicians, and sports celebrities. Our loved ones would be sad, 
but the world would continue to hum along seamlessly.
    Think, however, what would happen if all the skilled trade 
people from carpenters to plumbers to farmers and truck drivers 
decided not to show up for work tomorrow. We, the entire 
nation, would instantly grind to a halt, causing problems that 
would take generations to overcome. So why, then, have we 
stopped teaching our children the joys of crafting something 
out of nothing?
    About 15 years ago, while visiting a number of factories 
and filming the different ways companies make things for my TV 
show, ``John Ratzenberger's Made in America,'' I realized that 
there are hardly any workers under the age of 40 in any of the 
facilities. After talking with dozens of CEOs and plant foremen 
in every state, I was made aware of the fact that, nationwide, 
the manual arts, that is, wood shop, metal shop, auto repair 
shop, even home economics, were taken out of the middle and 
high school curriculums about 35 years ago. Not only did that 
result in a dropout rate back then of 30 percent instantly, but 
left us with a skilled essential workforce whose average age 
today is 58 years old.
    There are close to a million jobs available right now in 
small businesses around the country that rely on people with 
mechanical common-sense skills that we stopped offering in our 
public schools two generations ago. The most repeated complaint 
today from potential employers is that it's impossible to train 
someone for any of the jobs available when they graduate from 
high school everywhere without the ability to even read inches 
and fractions from a simple ruler.
    The big worrisome question then is this: How do we 
reinstate the necessary programs in our schools to give our 
children a familiarity of the tools that built and maintained 
our civilization and way of life? If the average age of the 
people that keep our Nation and the nation's infrastructure 
working is 58 years old, then how long do we have before it all 
stops?
    I also submit that we do away with the term, blue-collar 
worker, and replace it with essential worker, because that's 
exactly what they are. Once they're all retired, then no more 
ships, no more buildings, trains, planes, or automobiles, no 
more tractors, no more farms, no more food, unless we grow it 
ourselves in fields we plow with tools we've made with our own 
hands.
    That's the way it has always been, and if we someday want 
to explore the universe, cure disease, and marvel at what 
awaits us at the ocean's depths, then we'd better get busy 
introducing our youngsters to the vital art of using tools and 
the joy of self-reliance.
    Thank you.
    [The prepared statement of Mr. Ratzenberger follows:]

Prepared Statement of John Ratzenberger, Actor, Director, and Founder, 
                    American Museum of Manufacturing
    This great country of ours, this land we call the United States of 
America was founded and nurtured on 2 basic guiding principles: Freedom 
and the Ability to use that freedom to build the finest civilization 
yet seen on earth.
    We built this Nation guided by our imaginations and the skills we 
learned from our elders. We cut our own timber with saws we made 
ourselves from the ore we mined using tools that we machined and honed 
on machines that we built from scratch with our own hands. We drew, 
measured and shaped the tools we needed to build our homes and the 
villages towns and cities in which we lived. We travelled from place to 
place in vehicles we built and maintained ourselves to harness the 
pulling power of the livestock given to our use and care. We used our 
own hands to build the barns, fences, and corrals that kept our animals 
protected so that we could feed our families with food we grew 
ourselves in fields plowed with more tools that we designed and proudly 
crafted.
    We were always a nation of builders, tinkerers and craftsman that 
met each and every task and challenge with hands-on skills that were 
passed from generation to generation. We built our own ships that gave 
birth to the United States Navy. The same ships that fought the Barbary 
pirates off the coast of North Africa when Thomas Jefferson was 
President. We used the same time honored skills to construct the 
battleships and landing craft that were necessary for our victories on 
D-Day as we pushed the Nazi nightmare back and extinguished the flame 
of evil so that our children could live in peace. We made every one of 
the weapons carried by our brave men and women throughout our history 
to protect the place we call home.
    With our own hands, we designed and constructed a rocket ship that 
landed us on the moon and launched the satellites that transmit our 
cell phone signals from one place to the next. We used our hands to 
construct medical equipment that have saved millions of lives 
worldwide. Make no mistake, we are the peacekeepers of the world 
because of our manufacturing might. Manufacturing is to America what 
spinach is to Popeye.
    While future generations may have to explain that analogy, we in 
the year 2016 understand that without tinkerers, builders, and 
manufacturing throughout the land, we are rendered spineless and 
helpless. Manufacturing is the backbone of Western Civilization. 
Everything we do every single day is reliant first on someone's ability 
to not only put a nut and a bolt together but to make that nut and that 
bolt in the first place. I have always known these truths to be self 
evident because I grew up in the once mighty industrial town of 
Bridgeport, Connecticut, surrounded by people who knew how to design, 
make, build, fashion, repair and maintain anything you wanted. My 
uncles proudly boasted about their ability to hone a piece of metal 
down to 1/5000th of an inch tolerance as though the fate of western 
civilization rested on it. As a ten year old, I thought it was funny 
but as I got older and a tad more sophisticated, I realized that my 
uncles were right. The fate of Western 2 Civilization rests entirely on 
our ability to make things. The world would get along just fine without 
actors, reality stars, musicians and sports celebrities. Our loved ones 
would be sad but the world would continue to hum along seamlessly. 
Think, however, what would happen if all the skilled trades people from 
carpenters and plumbers to farmers and truck drivers decided not to 
show up for work tomorrow. We, the entire nation, would instantly grind 
to a halt causing problems that would take generations to overcome.
    So why then have we stopped teaching our children the joys of 
crafting something out of nothing? About fifteen years ago while 
visiting a number of factories and filming the different ways companies 
make things for my TV show ``John Ratzenberger's Made in America'', I 
realized that there were hardly any workers under the age of forty in 
any of the facilities. After talking with dozens of CEOs and plant 
foremen in every state, I was made aware of the fact that nationwide, 
the manual arts, that is: wood shop, metal shop, auto repair shop and 
even home economics were taken out of the middle and high school 
curriculums about 35 years ago. Not only did that result in a dropout 
rate back then of 30 percent instantly but it left us with a skilled 
essential workforce whose average age today is 58 years old.
    There are close to a million jobs available right now in small 
businesses around the country that rely on people with mechanical 
common sense skills that we've stopped offering in our public schools 2 
generations ago. The most repeated complaint today from potential 
employers is that it's impossible to train someone for any of the jobs 
available when they graduate from high schools everywhere without the 
ability to even read inches and fractions from a simple ruler.
    The big worrisome question then is this . . . How do we reinstate 
the necessary programs in our schools to give our children a 
familiarity of the tools that built and maintain our civilization and 
way of life? If the average age of the people that keep our Nation and 
the Nation's infrastructure working is 58 years old then how long do we 
have before it all stops?
    I also submit that we do away with the term ``blue collar worker'' 
and replace it with ``essential worker'' because that's exactly what 
they are. Once they are all retired then no more ships, buildings, 
trains, planes, or automobiles. No more tractors, no more farms, no 
more food unless we grow it ourselves in fields we plow with tools 
we've made with our own hands. That's the way it's always been and if 
we someday want to explore the universe, cure disease and marvel at 
what awaits us in the oceans depths then we'd better get busy 
introducing our youngsters to the vital art of using tools and the joy 
of self reliance.
            Thank you,

    The Chairman. Thank you, Mr. Ratzenberger.
    Mr. DeJohn?

    STATEMENT OF RORY DeJOHN, SENIOR VICE PRESIDENT, TURNER 
                      CONSTRUCTION COMPANY

    Mr. DeJohn. Thank you for the opportunity to testify this 
morning about closing the skills gap in the construction 
industry to boost U.S. competitiveness. I'm Rory DeJohn, and I 
represent Turner Construction Company.
    Turner will celebrate its 115th anniversary this year and 
is recognized as the largest building contractor in the United 
States. This year alone, we'll complete approximately $11 
billion of construction on 1,500 projects in 35 states and 400 
cities across the country. As the construction industry is 
called upon to deliver civil and urban infrastructure needs of 
our communities and our country, I would like to give you some 
insight on how the skills gap is being addressed and how we 
need to think differently and more strategically about 
developing a workforce prepared to take on these needs.
    First, let me provide some perspective. Construction 
employment is now at the highest level since 2008. Today, 6.8 
million people will show up to work on a construction project 
in every state and every city across the country. Together, 
they'll complete in excess of $1 trillion of construction this 
year. While impressive, there are approximately 100,000 fewer 
working in our industry than in 2007, the same year that we 
completed approximately the same amount of work.
    Certainly, we're employing technology and improved 
processes to help drive efficiency. Yet across the country, 
we're seeing a real need for more skilled labor in the 
industry. With these needs as a backdrop, we're also seeing a 
shortage of education and training opportunities for the people 
our industry needs most. The stress caused by a shortage of 
workers will continue to increase as demands for construction 
of both private and public sector clients continues to climb.
    I'd like to just start with the professional side of the 
industry. In 2011, there were 58,000 students pursuing civil 
engineering degrees. That number remains unchanged today, even 
as construction activity has grown 50 percent since 2011. As 
the United States is a world leader in economic power, it's 
imperative that we work to improve upon our education in STEM.
    As we look to strengthen the talent pipeline and produce 
more engineers, we also look to build a more diverse and 
inclusive pipeline, one that better reflects the world we live 
in and the people we serve. Although the number of women and 
minorities involved in STEM has increased over the years, they 
are still well behind the averages of other industries--the 
fact is that 80 percent of the students pursuing engineering 
degrees today are male and 60 percent are white.
    There are people, organizations, and companies making great 
efforts to increase the diversity of the talent pipeline. Their 
mission is the same: engage and enlighten a diverse population 
of middle and high school students to inspire them to pursue 
education, and then careers in architecture, engineering, and 
construction through mentoring and hands-on experience.
    Now let me turn to the skilled labor side. The median 
annual wage for all construction occupations is higher than any 
median annual wage for all occupations. Plumbers, iron workers, 
and electricians had a median income of $50,000 in 2015. Over 
the past few years, we've seen wages in the construction 
industry increase at a higher rate than the overall economy.
    Yet the facts are clear. Fewer young people are entering 
the building trades as more people in the building trades are 
approaching retirement age. We've seen the average age of a 
construction worker soar from 36 years old in 1985 to 43 years 
old today.
    One thing we can do to address this is to provide increased 
support to industry trade groups and encourage them to develop 
teaching practices and a curriculum better suited to the 
millennial generation. High school educators and counselors 
should introduce more students to a wide range of occupations 
available to them in our industry, and then offer them pathways 
to receive the training they need. As technical high school 
expands, our country will enjoy the benefit and a more engaged 
high school population that will graduate with the skills they 
need to be successful.
    In addition, we should also continue to support and 
encourage the transition of our military veterans from the 
armed services to rewarding careers in the construction 
industry. Our industry has a range of employment opportunities 
for veterans, and companies place high value on military 
experience.
    The industry has the need and the capacity to absorb more 
people into our workforce and engage them into meaningful work 
with a good wage. What we need is the collective commitment of 
the educators, trade organizations, and industry to work 
together to further strengthen the measures we have been 
taking. We must also work together to act strategically to 
prepare more people to enter the construction industry and to 
extend the careers of people working in our industry.
    Thank you again for the opportunity to be here today.
    [The prepared statement of Mr. DeJohn follows:]

       Prepared Statement of Rory DeJohn, Senior Vice President, 
                      Turner Construction Company
Introduction
    Thank you for the opportunity to testify this morning about closing 
the skills gap in the construction industry to boost U.S. 
competitiveness.
    I am Rory DeJohn and I represent Turner Construction Company. 
Turner will celebrate its 115th anniversary this year and is recognized 
as the largest building contractor in the United States. This year 
alone, we will complete approximately $11 billion of construction on 
1,500 projects located in 35 states and 400 cities across the country.
    Today, I would like to provide some insight into the very real 
issue the construction industry is experiencing surrounding the 
availability of skilled labor to complete the work we have.
    As the construction industry is called upon to deliver the civil 
and urban infrastructure needs of our communities and our country, I 
would also like to give you some insight into how the skill gap is 
being addressed and how we need to think differently, and more 
strategically, about developing a workforce prepared to take on these 
needs.
Construction Industry Impact on Employment and the Economy
    First let me provide some perspective. Construction employment is 
now at its highest level since 2008. Today, 6.8 million people show up 
to work on a construction project--in every state and every city across 
the country. Together, they will complete in excess of $1 trillion of 
construction this year. While impressive, there are approximately 
100,000 fewer people working in our industry today than in 2007 when we 
completed approximately the same amount of work.
    Certainly we are employing technology and improved processes to 
help drive efficiency. Yet, across the country we are already seeing a 
real need for more skilled labor in the industry. The population trends 
in our country, a growing economy, and the changing needs within a wide 
range of industries and communities will result in continued demand for 
construction and construction jobs. With these needs as a backdrop, we 
are also seeing a shortage of education and training opportunities for 
the people our industry needs most. The stress caused by a shortage of 
workers will continue to increase as demand for construction by both 
private and public sector clients continues to climb.
Professional Skill Gap
    I will start with the professional side of our industry. In 2011, 
there were 58,000 students pursuing civil engineering degrees. That 
number remains unchanged today even as construction activity has grown 
by nearly 50 percent since 2011. And, as technology occupies a growing 
role in our lives, nearly every business in every industry benefits 
from the skills taught in fields of science, technology, engineering 
and math (STEM).
    Science, technology, engineering and mathematics professionals help 
create better things and better places to work and live. Therefore, it 
is important that we encourage students to pursue careers in STEM as 
they are the future leaders in important industries and disciplines.
    In construction, we see firsthand the role that new technology and 
process innovations play in the planning, development, and construction 
of a building. And because construction is an industry that touches so 
many other industries, we also have a unique vantage point from which 
to understand how these technological advancements and process 
innovations are also driving positive changes for our clients as they 
plan, build, teach, heal, research and manufacture.
    As the United States is a world leader and economic power, it's 
imperative that we work to improve upon our education in STEM. I 
believe the future of our students, as well as our collective future, 
is extremely bright, but only with our continued and increased support 
of their education beginning in elementary school and continuing 
through high school and into college.
    We need to advance a strong message regarding the opportunities 
available to develop innovative solutions to significant global issues 
through education and careers in STEM. Many are drawn to the 
construction industry because of its enormous impact on so many 
different aspects of modern life. They read about the need to improve 
the infrastructure of a city, hear of the need for a healthcare 
facility in a rural area, or see an empty space a community center 
might fill. These are the kinds of challenges that can serve to inspire 
the next generation of engineers.
    As we look to strengthen the talent pipeline and produce more 
engineers, we also look to build a more diverse and inclusive 
pipeline--one that better reflects the world we live in and the people 
we serve. Although the number of women and minorities involved in STEM 
has increased over the years, they are still well behind the averages 
of other industries. The fact is that 80 percent of the students 
pursuing engineering degrees today are male and 60 percent are white.
    There are people, organizations, and companies making great efforts 
to increase the diversity of the talent pipeline. They serve as 
mentors, providing internships and scholarships and partnering with 
other institutions to support a larger and more diverse pool of people 
prepared to enter our industry. The Future City Competition, the ACE 
Mentor Program and Turner's own YouthForce 2020 program are just three 
programs that are addressing this. Their mission is the same: engage, 
excite and enlighten a diverse population of middle and high school 
students, to inspire them to pursue education and then careers in 
architecture, engineering, and construction through mentoring and 
hands-on experiences.
    There are also organizations like the Society of American Military 
Engineers, which provides opportunities for training, education and 
professional development to veterans and helps them transition from the 
military to careers as project managers and leaders in the construction 
industry.
Labor Skill Gap
    Now let me turn to the skilled labor side of our industry. The 
Bureau of Labor and Statistics reports that the median annual wage for 
all construction and extraction occupations was $42,280 in 2015, which 
was higher than the median annual wage of $36,200 for all occupations. 
Plumbers, ironworkers and electricians had a median wage of $50,000 in 
2015. Over the past few years, we have seen wages in the construction 
industry increase at a higher rate than the overall economy.
    Yet, the facts are clear: our labor force is aging. Fewer young 
people are entering the building trades as more people in the building 
trades are approaching retirement age. We have seen the average age of 
construction workers soar from 36 to 41.5 years old between 1985 and 
2010. The average age is continuing to increase and now stands at 43.
    The construction industry is being pinched on both sides of the 
labor pool, resulting in a depleting workforce in the industry. This 
means it may become increasingly more difficult to find the skilled 
labor our industry and our country needs.
    One thing we can do to address this is to make the work environment 
more attractive to current and prospective tradespeople. With 
technology tools to facilitate prefabrication and modularization, we 
are continuously improving the safety and work environment for our 
labor force. Technology and a focus on improved methods enables us and 
our industry partners to work in a more favorable and comfortable way. 
This can both help extend careers of people in the industry and make it 
a more interesting industry for young people to join.
    Another thing we can do is provide increased support to industry 
trade groups, and encourage them to develop teaching practices and a 
curriculum better suited to the millennial generation. High school 
educators and counselors should introduce more students to the wide 
range of occupations available to them in our industry, and then offer 
them pathways to receive the training they need. As technical high 
schools expand, our country will enjoy the benefit of a more engaged 
high school population that will graduate with skills to be successful.
    In addition, we should also continue to support and encourage the 
transition of military veterans from the armed forces to the 
construction trades. Our industry has a range of employment 
opportunities for veterans, and companies place high value on military 
experience.
Conclusion
    We know that the construction industry provides multiple pathways 
for people to find fulfillment, make a difference, and achieve success. 
We also know that the ability of the construction industry to serve the 
needs of private and public sector clients directly affects the 
strength and competitiveness of our country.
    The industry has the need and the capacity to absorb more people 
into our workforce and engage them in meaningful work with a good wage. 
What we need is the collective commitment of educators, trade 
organizations and industry to work together to further strengthen the 
measures the industry and our partners have been taking. We must also 
work together and act strategically to prepare more people to enter the 
construction industry, and to extend the careers of the people working 
in our industry.
    Thank you again for the opportunity to be with you today.
    I would be happy to answer any questions you may have.

    The Chairman. Thank you, Mr. DeJohn.
    Colonel Cartney?

    STATEMENT OF COLONEL MICHAEL CARTNEY, (USAF, RETIRED); 
            PRESIDENT, LAKE AREA TECHNICAL INSTITUTE

    Colonel Cartney. Chairman Thune, Ranking Member Nelson, and 
members of this Committee, thank you for your time today. I'm 
Mike Cartney, President of Lake Area Technical Institute in 
Watertown, South Dakota, this year's recipient of the Aspen 
Prize for Community College Excellence. I commend this 
Committee for taking on the topic of this national skills work 
gap and the potential solutions.
    Community colleges and, specifically, technical colleges 
are often amongst the community's first responders for 
workforce and economic demands. Let me briefly introduce you to 
Lake Area Technical Institute.
    We are a public 2-year college with a student population of 
nearly 2,500 students, offering 29 career-focused programs of 
study. Our graduation rate is nearly twice the national 
average, we place 99 percent of our graduates, and those 
graduates earn 27 percent more than other new starts in our 
region. Our student loan default is half that of the national 
average. We are extremely proud of every one of our student 
successes, and we cherish our industry and community ties.
    The technical evolution of the workplace requires even 
entry-level employees to possess more education and training 
than ever before. But the U.S. approach and focus on 
postsecondary education does not align with the country's 
workforce needs. Eighty percent of the jobs in 2025 will 
require postsecondary education, and 80 percent of those jobs 
will require postsecondary credential short of a 4-year degree. 
Yet we continue to strongly value and push our students toward 
4-year degrees, resulting in a mismatch between the education 
people are receiving and the workforce needs.
    Simultaneously, there are great jobs available for those 
with the right skills. Trail King Industries, a South Dakota 
based manufacturer, had to turn down $20 million in contracts 
because they could not find welders. South Dakota businesses, 
such as Muth Electric, Sheehan-Mack, 3M, Avera HealthCare, 
Prairie Lakes Healthcare, Worthington Industries, and Big Stone 
Power, have been forced to turn away contracts, delay or forego 
expansion, or leave positions unfilled simply because they 
could not find properly skilled workers available.
    Today, South Dakota could quadruple our welding, 
electrician, and licensed practical nursing capacities and 
still not meet the openings available just in our state. And 
this scenario repeats across every state in the nation, 
predominately in the manufacturing, energy, healthcare, 
aerospace, and transportation industries.
    Recently, South Dakota amended our constitution to 
recognize technical education. In addition to the traditional 
K12 and higher education system, we now have what I like to 
refer to as HIRE education--that's H-I-R-E--in our technical 
education system. South Dakota's technical institutes have 
partnered with industries and communities and the state 
government to take on the skills gap.
    Over 300 businesses work with our program staff and 
students to provide a relevant educational experience that 
supports our state's workforce demands. These businesses 
consult on and oversee curriculum, provide internships, provide 
training aids and equipment, mentor our students, and, most 
importantly, they hire our students. They are heavily invested 
in their workforce pipeline.
    Through the vision and generosity of T Denny Sanford and 
Governor Daugaard, many students receive full ride scholarships 
to South Dakota's technical institutes in return for working in 
South Dakota. Lake Area Technical Institute's Stretch-the-
Million program further leverages those funds and adds another 
30 percent of scholarship winners for those that are willing to 
work for a specific company.
    Tightly knit student cohorts and a clearly defined 
graduation path with close connections to industry-trained 
instructors has been a formula for success in South Dakota's 
technical institutes for over 50 years. Our students' education 
also includes the soft skills needed to be successful in 
today's market. We view college as a pathway, not a 
destination, so we redefine success as placement, not 
graduation. And we know that for 40 percent of our students, 
college is a pathway out of poverty, so we focus on keeping 
college affordable so that a road that was previously less 
traveled now seems achievable and a journey worth taking.
    In closing, the technical skills gap is not solely an 
industry problem. It is not solely a government problem. And it 
is not solely an education problem. It's a multifaceted problem 
that requires a multifaceted response.
    First, we need to tighten our bonds between education and 
industry. We must re-image high demand occupations so they are 
highly valued by society. There are great jobs with great pay, 
great work environments with great people, and we need them. 
Early engagement with our middle schools and high schools must 
inform young minds and their parents of the great opportunities 
available.
    Second, we must align postsecondary education with the 
emerging workforce demands and provide the infrastructure and 
tools to ensure our educational system is responsive to 
industry as well as individual needs. We need to merge and 
align our educational careers with our occupational careers by 
providing a just-in-time education system, and education must 
better value work experience.
    Third, Federal, state, and local governments must look for 
innovative ways to be catalysts for workforce development. 
Possible solutions include development grants for critical 
needs, establishing programs like South Dakota's Build Dakota 
programs to make college achievable in exchange for work 
commitments, support for low-income students, and assistance in 
building infrastructure and expanding workforce-targeted 
educational opportunities are also needed.
    Finally, establishing Centers of Excellence for Career and 
Technical Education focused on generating and sustaining the 
technically skilled workforce in a scalable, proven, and cost-
effective manner has to be on the table.
    I again commend this Committee and thank you for going the 
extra mile to make our Nation the greatest place to live, work, 
and learn.
    Thank you.
    [The prepared statement of Colonel Cartney follows:]

    Prepared Statement of Colonel Michael Cartney, (USAF, Retired); 
                President, Lake Area Technical Institute
    Chairman Thune, Ranking Member Nelson, and Members of the 
Committee:

    Thank you for your time today. I am Mike Cartney, President of Lake 
Area Technical Institute in Watertown, SD, this year's recipient of the 
Aspen Prize for Community College Excellence. I commend this committee 
for examining the Nation's workforce skills gap and potential 
solutions. Some have observed that community colleges, and specifically 
technical colleges, are often among a community's first responders for 
workforce and economic development.
    Let me briefly introduce you to Lake Area Tech (see attachment 2 
for additional information):

   We are a public, two-year degree-granting technical college 
        with a student population of nearly 2,500, offering 29 programs 
        of study.

   Our student success rates are perpetually at the top or near 
        the top of all community colleges across the nation:

     Graduation rate--67 percent (national average--39 
            percent)

     Placement rate--99 percent

     Lake Area Tech graduates earn 27 percent more than 
            other new starts in the region.

     Student loan default rate--6.1 percent (national 
            average is 11.3 percent)

     The South Dakota system of Technical Institutes, 
            consisting of Lake Area Technical Institute, South East 
            Technical Institute, Western Dakota Technical Institute, 
            and Mitchell Technical Institute, was ranked number 1 in 
            the country this year by Wallet Hub for best value..

   Lake Area Technical Institute was only the 93rd college in 
        U.S. history (and we believe, the only technical college) to 
        have a sitting President as our commencement speaker.

   LATI students and staff accomplished almost 80,000 hours of 
        community service and community learning last year.
Goal and major points.
    I am here to provide foundational information on the important role 
that community colleges and, more specifically technical colleges, play 
in enabling the vibrant and targeted growth of our workforce and 
economy. I'll be highlighting and providing specific best practices 
that we believe can enable the United States' educational and 
industrial entities to better fill the technical workforce gap. Today, 
I hope to raise awareness of these profound issues related to the 
local, state, and national Technical Skills Gap from a technical 
college standpoint. Other distinguished guests will address the topic 
from an industry perspective.
The problems.
    The technological evolution of the workplace requires even entry 
level employees to possess more education and training than ever 
before. But the U.S. approach and focus on post-secondary education 
does not align with country's workforce needs. A commonly cited 
projection is that 80 percent of jobs in 2025 will require post-
secondary education and 80 percent of those jobs will require a post-
secondary credential short of a four-year degree. Yet, we as a society 
continue to strongly value and push our students toward four-year 
degrees, resulting in a mismatch between the education people are 
receiving and workforce needs. It is also leaving a significant number 
of our youth with large student debt and no means of repaying it. To be 
clear, the need, value, and benefits of a four-year degree has not 
waned, but there is a realization that in many career paths, getting a 
four-year degree as a continuum of work/education, rather than prior to 
entering the workforce, better benefits both the employer and 
employees.
    Simultaneously, the great jobs are available for those with the 
right skills. Trail King Industries, a South Dakota based manufacturer, 
had to turn down $20M in contracts because they could not find welders. 
South Dakota businesses such as Muth Electric, Sheehan-Mack, 3M, Avera 
HealthCare, Prairie Lakes Healthcare, and Big Stone power plants were 
being forced to turn away contracts, delay or forego expansion, or 
leave positions unfilled, not because there were not workers available, 
but because there are not properly skilled workers available. South 
Dakota could quadruple our welding, electrician and licensed practical 
nursing program capacities and still not fill the openings just in our 
state. These scenarios are repeated across the Nation in every state, 
predominately in the manufacturing, energy, healthcare, aerospace, and 
transportation industries.
    Community colleges must also improve. Community colleges are unable 
to attract sufficient numbers and only graduate 39 percent of those 
attending. Further, only a small percentage of those colleges track 
students' employment statistics following graduation. Lake Area 
Technical Institute's graduation rate is 69 percent, we track all our 
students post-graduation, and our placement rate this year is 99 
percent. It is our desire to share our best practices with other 
community colleges in order to bolster their graduation rates and 
contributions to the technical workforce through efforts like the Aspen 
Prize for Community College Excellence.
Across the nation, there are not enough skilled workers to fulfill 
        critical workforce needs.
    In South Dakota and across the nation, key industries do not have 
enough technically skilled employees to fill the workforce needs. The 
demand for jobs which require education beyond high school but not a 
four-year degree remains strong. Between 2014-2024, 49 percent of job 
openings in South Dakota will require less than a four-year degree. 
These jobs account for 55 percent of South Dakota's labor market, but 
only 49 percent of the state's workers are trained to this level. 
(http://www.nationalskillscoalition.org/resources/publications/2017-
middle-skills-fact-sheets/file/South-Dakota-MiddleSkills.pdf).
    One contributing factor to this problem is the aging workforce. 
Young people are not attaining the technical education needed to 
replace the retiring workforce. We need to get people into technical 
degree and credential programs and dispel the myth that we can do more 
with less. Today's technology is a force multiplier that enables people 
to do more. It often doesn't reduce the number of people to do it, as 
we need people to build, operate, and maintain the technology. And, we 
don't need workers to do what they did before; they need to perform 
different tasks. For example in today's manufacturing industry, jobs 
are more technical. We need workers who can maintain and operate the 
robots that raise the quality and throughput of the production line. 
Because technical workers in the U.S. perform job duties differently, 
there is often a wage disparity with foreign countries. Often, foreign 
countries employ workers at lower wages to perform tasks manually.
Career and Technical Education--A different approach to education:
    Just this last year, South Dakotans amended our state constitution 
to recognize Technical Education as the third form of education--giving 
us the traditional K12 system, the traditional higher education, and 
what I like to refer to as ``HIRE''--(that's H I R E) technical 
education system. The Technical Education system is focused on enabling 
South Dakota's economic development by growing our technical skilled 
workforce.
    South Dakota's Technical Institutes have partnered with Industry, 
communities, and State Government to take on our skills gap head on. 
Over 300 businesses work with Lake Area Tech's program staff and 
students to provide a coherent and relevant educational experience that 
support our state's workforce demands. These businesses consult and 
oversee curriculum, provide internships and on-the-job experience for 
students, provide industry standard training aides and equipment for 
the students to learn with, mentor our students, and most importantly 
they hire our students--in short, they are heavily invested in their 
pipeline.
    Through the vision and generosity of T Denny Sanford and Governor 
Dennis Daugaard, students receive full ride scholarships to South 
Dakota's technical institutes in return for working in South Dakota. 
Lake Area Tech's ``Stretch-the-Million'' program leveraged these funds 
with industry providing 33 percent more scholarships to students 
willing to work for a specific employer at graduation. But the impact 
of the Build Dakota Scholarship reaches beyond just those students 
receiving scholarships. I believe the exposure and informational 
aspects of Build Dakota enabled the state's public two-year technical 
institutes to grow when nationally 2-year enrollment declined by 10 
percent.
    The core approach of tightly knit student cohorts with close 
connections to their industry trained instructors has been a formula 
for success in SD's technical institutes for over 50 years. Our 
students' education also includes the soft skills needed to succeed in 
today's modern workforce. We view college as pathway, not a 
destination. And we know for more than 40 percent of our students, 
college is the road out of poverty. As we aligned our programs with 
industry needs, we redefined success as placement not graduation 
because it makes college more relevant, we avoided labelling students 
because fitting in at college is already hard enough, we ensured 
students knew the paths to success with clear expectations, and we 
emphasized every employee had a role in student success. Then we 
wrapped those efforts in our Culture of Caring: It was these guidelines 
that makes a road that was previously perceived as less travelled, now 
seem achievable and a journey worth taking.
    Even after 14 consecutive years of growth, Lake Area Tech needs to 
expand our capacity. Today, South Dakota could quadruple our welding, 
electrician and licensed practical nursing program capacities and still 
not fill the openings just in our state. So we have turned to even more 
innovative approaches. Online and dual credit programs are paying 
significant benefits. Our Learn Where You Earn concept encourages local 
companies to allow employees to up-skill in their home communities. We 
also encourage communities to Grow Your Own and we encourage businesses 
to promote employment opportunities in their communities by developing 
relationships with high school students, parents, and educators.
But there is much yet to do
    Today, there is a disparity between the workers and the job 
openings. This gap will continue to grow. In South Dakota, our 
industries are pleading for more technically trained workers. Here are 
just a few examples of the critical need for employees that, in most 
cases, are causing financial and human resource hardships for the 
companies.
    Deb Fischer-Clemens, RN, the Senior Vice President of Public Policy 
for Avera and a member of the Skilled Workforce Advocacy Council: 
Currently, there are 148 openings for licensed practical nurses (LPNs) 
across the system; some long-term care beds have been closed because of 
staffing shortages. In other facilities, traveling staff are used to 
cover the shortages. This causes other issues, as the average hourly 
pay rate for an LPN is $20.12, while a facility will pay, on average, 
$49 per hour for a traveling LPN; this salary is an unsustainable 
amount for facilities to pay based on current reimbursement rates.
    Terry Sabers, Co-President, Muth Electric, Inc.: We believe 
strongly in the value of hiring educated apprentices from a technical 
institute in our area. During the recession there were about four 
companies attending the job fair recruiting the 30 or so graduating 
students. At the event in the last month there were 36 companies 
recruiting the 32 graduates. All construction and service based 
companies in the upper Midwest are at an extreme shortage of workers.
    Trail King Industries, Mitchell, SD: In a period of approximately 
16 months in 2013 and 2014, Trail King had to turn down $20 million of 
business because we did not have the skilled workers, specifically 
welders, to complete the business in the timeframe needed by the 
customer. Even though Trail King used a number of innovative and very 
generous recruiting methods and employed robotic welders where 
possible, there simply were not enough skilled welders available to 
fill the needs of the company.
    Gage Brothers, Sioux Falls, SD: This lack of skilled workers has 
cost the company approximately $5 million in sales each of the past 
three years. Additionally, we have sold between $2-6 million in work to 
a competitor in Minnesota in order to keep our production schedule on 
track.
    Hancock Concrete, Sioux Falls, SD: The labor shortage affects our 
current employees as well. They are required to work longer hours to 
fulfill orders which in turn is an increased safety risk and also 
increases turnover. One other adverse effect of the items that I have 
described is increased product cost for the infrastructure projects 
which affects all tax payers.
    Worthington Industries Engineered Cabs, Watertown, SD: At 
Worthington Industries Engineered Cabs, our business levels are at 
historic lows due to equipment markets in Agriculture, Mining, and 
Construction. Even with an extremely slow market we struggle to fill 
open positions for skilled labor especially welders and painters. Some 
of these positions have remained unfilled for 3-4 months before finding 
a qualified candidate. We have a sister plant in Greeneville, TN that 
builds very similar products. One of the considerations on whether to 
build products in SD or TN is labor availability.
    (see Attch 1 at the end of this document for complete South Dakota 
Industry Stories.)


    South Dakota's Technical Education system could quadruple our 
program capacities in welding, licensed practical nursing, and 
manufacturing and still not fill the open positions just in our state.
Technical Skills Gap is exacerbated by multiple issues.
    There are various issues contributing to the Technical Skills Gap 
problem. One of the major issues is at the ground level: finding ways 
to attract students (future employees) to enroll in technical education 
programs. In South Dakota, we know that some high school graduates have 
never been exposed to Career and Technical education in their K-12 
experience. This is due to a number of factors including cuts in 
funding, graduation requirements, and a greater emphasis on four-year 
college attendance.
    Overcoming negative perceptions about technical education is also a 
continuous struggle. Often people associate manufacturing/technical 
jobs with dirty, dark work environments. Nothing can be further from 
the truth! Today's state-of-the-art shops offer employees a bright 
working environment that is well-ventilated and clean. At Lake Area 
Technical Institute, we teach our students that taking pride in their 
work space is just as important as the work they perform on machines, 
engines, and robots.
    Overcoming the emphasis on ``having to attend'' a four-year college 
by parents, students, and high school counsellors is also an issue. 
(Incidentally, high school counsellors and teachers are almost 
exclusively four-year degree holders who are helping our youth plan 
their futures.) The opinion of many is that students need to continue 
their post-high school education at a four-year college to make 
something of themselves. Often, the many benefits of technical 
education are not considered, partly because they're unknown to the 
person. On the other hand, there is the faction that believes technical 
education is `for those who cannot go to college.' Again, the benefits 
of an education that enables a career AND allows for continued 
education are being overlooked by those subscribing to this attitude.
    Finally, an issue of great significance regarding the Technical 
Skills Gap is the lack of capacity for CTE education and training. With 
our newly amended constitution in South Dakota, it will help shine the 
spotlight on the need for more available dollars for technical 
education and, ultimately, filling the workforce gap.
Lake Area Tech is making concerted efforts to decrease the Technical 
        Skills Gap.
    Three years ago, Lake Area Tech zeroed in on redefining student 
success. Redefining success as placement (employed or continuing their 
education), and making graduation (completion) a step along a student's 
journey affects not only the faculty and staff of the institution, but 
also students, parents, and industry that need a different perspective 
on their education. At the institutional level, the first step was 
formally changing our mission statement to ``Lake Area Technical 
Institute: superior, comprehensive technical education that changes 
lives and launches careers'' to focus this initiative. This subtle 
adjustment changed the whole conversation and focus with potential and 
current students. Rather than discussing degrees, which is an abstract 
concept to many new students, we discuss what they want to be, what 
they want their future to be, and then laying out a path for them to 
get there. Instead of discussing ``where can you go with a particular 
degree,'' we are discussing which degrees can get them where they want 
to go. Things become immediately more relevant. Going to class, doing 
homework, and passing tests--it's not just about completing a course, 
but rather, it's about learning what students need to know to be what 
they want to be!
    The conversations with students and parents have changed to 
emphasize and explain that college is a pathway, not a destination. At 
Lake Area Tech, we provide students a pathway to graduation that allows 
them to begin not only their careers, but their experience as life-long 
learners who take advantage of all educational offerings that will 
allow them to advance throughout their time in their chosen field.
    From recruiting to advising to completion, the conversation at Lake 
Area Tech is career-focused. Admissions reps guide students to examine 
their aptitude and career goals. A detailed program graduation plan 
defines expectations; placement data and salary information provide 
motivation; and experienced staff helps candidates make an informed 
career decision. Students are not accepted into LATI and then accepted 
into a major. Rather, career selection is required during the 
application process. Students whose chosen career program is at 
capacity, or they are otherwise unable to enter, often chose an 
alternate path or pursue their career choice elsewhere. And these 
conversations cannot be fruitful unless local and regional employers 
are involved in the system to provide real-world expectations, 
insights, support and guidance to the institution and its future 
employees.
    Universities must also prepare to provide the same perspectives and 
guidance to those transferring to their programs. Transfer student 
success is defined, at a minimum, not as a successful transfer to a 
four-year school, but completion of that next degree. Extending the 
logic further, ultimately, baccalaureate completers should measure 
success by being employed in a job with family-sustaining wages. This 
process is affirming our belief that our consumer is not just the 
student, but their future employers as well. And it is enlightening us 
and industry to the importance of their role in our success.
    At Lake Area Technical Institute, we are doing everything we can to 
make college affordable. If we are doing it right, technical education 
is more expensive due to the resources needed to train the graduates: 
advanced equipment, modern facilities/labs, and instructors who should 
be earning wages equal to those working in the field.
    Recognizing cost as one of the biggest factors to attracting as 
well as retaining students, Lake Area Tech strives to make college 
affordable and minimize the financial barriers. LATI offers low-cost 
on-campus child care and works with students to qualify for state 
childcare assistance. By providing cafeteria services in-house and at-
cost, we offer nutritious, affordable meals. Our bookstore also 
operates at a target margin of less than 10 percent. Bolstered by 
campus initiatives, instructors work diligently to keep costs of text 
books, tools, and technology in check while ensuring students have 
access to high-quality equipment needed to succeed. Over 65 percent of 
courses use the learning management system to provide resources to 
students compared to a 60 percent national average; therefore, reducing 
the overall cost of materials.
    LATI developed a Prior Learning and Work Experience Model to assess 
the training experiences of veterans and students previously employed 
in the field to identify accelerated graduation paths. This enables 
students to accelerate degree completion time and save on the overall 
cost of their degree. Remarkably, even though technical education is 
more expensive than traditional forms of education, the last calculated 
default rate at Lake Area Tech, 6.1 percent, is nearly one-half the 
national average, 11.3 percent, on student loans.
    Getting a good paying job after graduation is paramount in making 
college affordable. Six months after graduation, 81 percent of our 
graduates are employed, and another 17 percent are continuing their 
education, meaning 99 percent of our graduates are placed, a key factor 
in why LATI's student loan default rate is less than half the national 
average. Our latest placement report findings include:

   An increase from 7 programs earning $20 per hour or more 
        (2015) to 8 programs (2016) with Agriculture joining the list 
        of highest earners. The highest average salary is from our 
        Energy Technology program, which is $25.93/hr. ($53,934.40).

   Increased placement percentage ``in training field in South 
        Dakota'' from 80 percent (2015) to 84 percent (2016)

   82.63 percent of graduates in this cohort were from South 
        Dakota. 86 percent were employed in South Dakota six months 
        after graduation for a net gain of 3.37 percent (18 graduates) 
        to the South Dakota workforce pipeline

    Culture of Caring. Student success at Lake Area Tech begins with 
our culture. We care about our students, and they know we care. We 
believe in our students, and they know we believe in them. And, we 
listen to our students, and they know we are listening. If we aren't 
talking about students' challenges, their goals and their vision for 
success, it can be translated into a belief that we as faculty and 
staff do not care about their individual success. Everyone, from 
administration to faculty, to staff takes personal responsibility for 
student success. The culture is something we've been working on for a 
number of years. We have older faculty who know who we are and how we 
have done these things over the course of years to benefit our 
population. We added a retention coordinator who did preemptive 
engagement and learning engagement and also hired some personnel to 
focus on diversity issues. So a part of our approach has been to make 
new investments, but largely, our biggest investment was time in 
changing our institutional philosophy.
    Within our region, Lake Area Tech works closely with business and 
industry members. Workforce development through partners is at the 
heart of LATI's success and includes a wide spectrum of individuals, 
organizations, and businesses. With over 300 industry and community 
partners, our commitment to expand industry's role in student success 
may seem out of reach. But we enhanced our efforts with two business 
partner specialists, and the results have been astounding. For example, 
The State of South Dakota and T. Denny Sanford expanded access to 
college through the Build Dakota Scholarship Program, a $50 million 
investment to provide full-ride scholarships to students in high demand 
occupations. LATI partnered with businesses to expand the impact of 
Build Dakota through the Stretch the Million campaign, in which 
businesses pay 50 percent of the full-ride scholarship. The local and 
regional community encourages and appreciates the achievements of 
students by recognizing their economic impact and community service 
efforts.
    Lake Area Technical Institute also promotes career opportunities 
within our community and surrounding communities. Our Learn Where You 
Earn concept encourages local companies to allow employees to up-skill 
through Lake Area Tech's online hybrid options or LATI Corporate 
Education to gain the skill sets employees in those communities need. 
We also encourage communities to Grow Your Own. We know that today's 
young people prefer to live and work close to home. To accommodate 
those that can, we encourage businesses to promote employment 
opportunities in their communities by developing relationships with 
high school students, parents, and educators.
    At the state level, the South Dakota Office of Economic Development 
funded over $1 million in equipment to LATI annually to expand access 
to the latest technology without increasing the cost to students. The 
state also matched the $25 million private donation from T. Denny 
Sanford to create the Build Dakota Scholarship fund. LATI expanded the 
reach of the full-ride scholarships through the Stretch the Million 
program with over 20 partners initially pledging $175,000-$200,000. 
Beyond the Build Dakota Scholarship program, the LATI foundation is 
instrumental in expanding access to college through scholarships. Last 
year, the foundation awarded over 400 scholarships exceeding $300,000. 
Additional efforts to keep college affordable include participation in 
the national Free Application Week, Financial Aid Workshops, Financial 
Aid Literacy Program, and credit for corporate education and prior 
learning.
Lake Area Tech's recommendations.
    In closing, I'll emphasize The Technical Skills Gap is not solely 
an industry problem. It is not solely a government problem. And, it is 
not solely an education problem. It is a mutli-faceted problem than 
requires a multi-faceted response.
    First, we need to tighten the bonds between education and industry. 
Together we need to re-image high demand occupations to more highly 
valued to society. People understand these are great jobs with good 
pay, great work environments with great people, and that we need them! 
We need to be reaching into our middle schools and high schools to 
inform young minds, and their parents, about the great opportunities 
available in these industries. Additionally, technical education is 
more expensive than traditional academic environments, so we must find 
ways to share resources and control costs while keeping our schools 
updated and aligned with industry standards.
    Second, we need to facilitate the alignment of post-secondary 
education with our emerging workforce skills demands, and find ways to 
ensure our educational system is responsive to industry as well as 
individual needs. We need to merge and align our educational careers 
with our occupational careers by providing `just in time education' 
versus the current segregated models. In the same vain, education must 
better value work experience.
    Third, Federal, state, and local governments must look for 
innovative ways to be the catalyst for workforce development. Workforce 
development grants where there were critical needs; establishing 
programs modelled after SD's Build Dakota scholarships to make college 
affordable in exchange for work commitments; financial support for 
students coming from the lower part of the economic spectrum; and 
assistance in building infrastructure and expanding workforce targeted 
educational opportunities. Finally, taking a look at some of the 
exceptional technical colleges across the country and establishing 
Centers of Excellence for Career and Technical Education focused 
today's and tomorrow's technical skilled workforce in a scalable, 
proven, and cost-effective manner.
    In closing I what to again commend the Committee and thank you for 
going the extra mile to make our Nation the greatest place to Live, 
Work, and Learn.
Acknowledgements.
    I acknowledge the outstanding support in developing this document 
on such short notice. Playing particularly key roles were: Karen 
Henricks, Lake Area Technical Institute; Tiffany Sanderson, SD Dept of 
Education; Dawn Dovre and Aaron Schiebe, SD Dept of Labor and 
Regulation; and Greg VonWald, SD Skilled Workforce Advocacy Council. 
Our industry partners were also invaluable in putting this document 
together.
    Attachments:

  1)  South Dakota: Stories from Industry

  2)  Lake Area Technical Institute
                                 ______
                                 
                  Attachment 1: Stories from Industry
South Dakota: Stories from Industry
    Avera, the health ministry of the Benedictine and Presentation 
Sisters, is a regional partnership of health care professionals who 
share support services to provide excellent care at more than 300 
locations in eastern South Dakota and surrounding states.
    Deb Fischer--Clemens, RN, the Senior Vice President of Public 
Policy for Avera and a member of the Skilled Workforce Advocacy 
Council, shares several examples of health care workforce issues that 
Avera faces. Currently, there are 148 openings for licensed practical 
nurses (LPNs) across the system; some long-term care beds have been 
closed because of staffing shortages. In other facilities, traveling 
staff are used to cover the shortages. This causes other issues, as the 
average hourly pay rate for an LPN is $20.12, while a facility will 
pay, on average, $49 per hour for a traveling LPN; this salary is an 
unsustainable amount for facilities to pay based on current 
reimbursement rates.
    In addition, Avera currently has 12 openings for surgical 
technicians across the system. Bonuses of between $1,000 and $4,000 
being offered for these positions, but there are no surgical 
technicians applying. Medical laboratory technicians (MLTs) are also in 
short supply, resulting in travelers from others states being 
contracted at a rate of $38.64 per hour, while employed MLTs are 
earning $21 per hour on average.
    Again, neither closing beds, nor paying wages to contracted 
traveling staff, is sustainable.
    America has an increasing issue with a mismatch between the 
qualifications of its labor force and the skills required for open 
positions. Jobs go unfilled because unemployed citizens do not have the 
skills demanded. Two-year colleges can provide the focused education 
needed to fill these openings quickly. Enrollment in one and two year 
career programs must expand to meet projected workforce need. Since 
over 70 percent of the jobs require technical skills, society needs to 
acknowledge the value of this type of education. Lake Area Tech works 
extremely hard to communicate that these degrees are as vital to our 
country as any type of degree.
    LATI has strong vital partnerships with businesses. Every program 
has an active Advisory Board which meets each semester to provide input 
on curriculum and relay industry trends which impact our instruction. 
Partners are asked to contribute time, talent, and financial resources.
Muth Electric, Inc.
    The shortage of a skilled workforce has become steadily worse in 
the last few years. It was at a critical stage in 2007 but the 
recession slowed it somewhat. Now the problem is back and even worse.
    We believe strongly in the value of hiring educated apprentices 
from a technical institute in our area. During the recession there were 
about 4 companies attending the job fair recruiting the 30 or so 
graduating students. At the event in the last month there were 36 
companies recruiting the 32 graduates. All construction and service 
based companies in the upper Midwest are at an extreme shortage of 
workers.
    What this means is that in the next 10 years there will be a 
critical situation in the battle for a sufficient skilled workforce. 
This workforce (in our case electricians) is the same team that will 
make sure that the hospitals' ever-growing electronic workplace gets 
the proper maintenance to protect its patients. This team of workers 
also makes sure our food processing plants get upgraded and maintained 
to produce the needed food for the population of the U.S. The list goes 
on and on of critical situations.
    Even with the growing labor saving technology features available, 
there are still many needs for a trained workforce. We have instituted 
many efficiency aids in the construction field but there are still 
critical positions that need to be filled with humans. We need help in 
ensuring that there are people to fill those critical positions to 
serve the needs of the U.S.--Terry Sabers, Co-President, Muth Electric, 
Inc.
Trail King Industries, Mitchell, SD
    Trail King Industries is a privately owned manufacturer of large 
scale specialty trailers employs approximately 700 employees and has 
manufacturing sites in Mitchell and Yankton, SD and Fargo, ND.
    In a period of approximately 16 months in 2013 and 2014, Trail King 
had to turn down $20 million of business because we did not have the 
skilled workers, specifically welders, to complete the business in the 
time-frame needed by the customer. Even though Trail King used a number 
of innovative and very generous recruiting methods and employed robotic 
welders where possible, there simply were not enough skilled welders 
available to fill the needs of the company.
    Trail King has invested heavily in the welding programs of the 
technical colleges in South and North Dakota in hopes of nurturing a 
consistent pipeline of qualified welders. It has also been instrumental 
in establishing the South Dakota Skilled Workforce Advocacy Council as 
proactive measures to grow the workforce. We believe, however, that a 
much broader national effort will be required to address the skills gap 
that has developed across the United States if this Nation is to be 
competitive in manufacturing.
Glacial Lakes Energy, LLC, Watertown, SD
    We consistently incur higher costs (such as overtime) when we 
cannot easily and readily find qualified labor. In our production 
operation, the plant has to run and we are forced to pull in operations 
staff from other shifts to cover the vacancies that sometimes sit for 
months. This results in higher overtime costs and potential ``burn-
out'' of our existing team members.
    Another frustrating aspect is the quality and quantity of 
applications we receive. Many times, we receive only a 1-3 applicants 
with less than desirable backgrounds for a position which gives us 
limited options in the selection process.--Jim Seurer, Chief Executive 
Officer, Glacial Lakes Energy, LLC
Gage Brothers, Sioux Falls, SD
    Gage Brothers was founded by members of the Gage family in 1915 and 
has been employee-owned since 2008. Our company has struggled to 
maintain a full workforce for several years and regularly have anywhere 
between 10-40 job openings. These positions include but are not limited 
to: production workers, carpenters, welders and equipment operators.
    This lack of skilled workers has cost the company approximately $5 
million in sales each of the past three years. Additionally, we have 
sold between $2-6 million in work to a competitor in Minnesota in order 
to keep our production schedule on track.
    Part of the solution lies in automation, which has transformed U.S. 
manufacturing. This will require us to ramp up job-training efforts 
because we will need workers who can operate, program and maintain the 
new computerized equipment. No matter how you slice it, we need the 
manufacturing industry and our education system to join forces to 
create a system to recruit, train and retain skilled workers. It is 
paramount to the future economic growth and prosperity of South Dakota. 
Every dollar of manufacturing produces $1.41 for our state.--Terry 
Kelly, President, Gage Brothers, Sioux Falls, SD
Hancock Concrete, Sioux Falls, SD
    At Hancock Concrete we are producers of precast concrete products 
for infrastructure projects across 4 states in the upper Midwest. Our 
Sioux Falls production facility supplies product for projects in 
eastern South Dakota and northwest Iowa. The months of March through 
November are the heaviest months of production and when we are most in 
need of workers.
    In the past few years it has become increasingly difficult to find 
laborers to fill out all of the crews that we have in our Sioux Falls 
plant. We have found that the labor pool in the local area is just not 
consistent enough for the type of work we do. During the past few years 
we have had to go to extreme measures to ensure we had enough laborers 
to fulfill all of our orders. These extreme measures included bringing 
laborers in from outside the state from as far as Texas, just to make 
sure we could fill our crews with consistent workers. This was an 
increased financial burden for Hancock as we would house those out of 
state workers and need to perform additional training each year when we 
brought them in. Also, during that time of worker shortage, we had to 
look to our other plants in neighboring states for help to make product 
to fulfill our orders. At times we would back away from bidding on 
projects because we did not know if we would have enough workers to 
meet the delivery needs of the customers.
    The labor shortage affects our current employees as well. They are 
required to work longer hours to fulfill orders which in turn is an 
increased safety risk and also increases turnover. One other adverse 
effect of the items that I have described is increased product cost for 
the infrastructure projects which affects all tax payers.
    This area of the Midwest has a shortage of workers for performing 
specific technical trades as well as a lack of general laborers that 
have the desire to put in the work necessary to perform less skilled 
jobs that at times may be more physically demanding than working a 
department store or restaurant. We have hired many employees and looked 
at many different backgrounds and ethnicities but the consistency is 
just not there. We will continue to explore other options for our labor 
needs and help to grow our local workforce in any way we can.--Ray 
Pierson, Sales Territory Manager, Hancock Concrete, Sioux Falls, SD
Worthington Industries Engineered Cabs, Watertown, SD
    At Worthington Industries Engineered Cabs, our business levels are 
at historic lows due to equipment markets in Agriculture, Mining, and 
Construction. Even with an extremely slow market we struggle to fill 
open positions for skilled labor especially welders and painters. Some 
of these positions have remained unfilled for 3-4 months before finding 
a qualified candidate. We have a sister plant in Greeneville, TN that 
builds very similar products. One of the considerations on whether to 
build products in SD or TN is labor availability. I want to keep all 
possible jobs in SD, but we also have to make the best business 
decisions for our business and our customers. Skilled workforce 
development and availability is a key factor in our ability to grow our 
business in SD.--Bruce Lear, Watertown Operations Manager, Worthington 
Industries, Watertown, SD
BX Civil & Construction, Inc.
    The ability to grow a construction company is currently constrained 
by the available workforce and our ability to attract, train & retain 
that workforce. At the same time infrastructure is in major disrepair 
and needs a long-term investment to preserve and increase the value of 
our communities, states and nation.
    As a highway construction company, we have shifted our mindset to 
managing our work load based upon available workforce hours. Our growth 
as a company is now based up how much we think we can reasonably grow 
our workforce. Companies in our industry grow incrementally by in-house 
recruitment and training people on the job. We knowingly or unknowingly 
``trade'' or ``steal'' employees from each other on a seasonal basis. 
Some like us have embraced the immigrant workforce and have grown with 
that population. The reality is that none of that is sustainable as a 
stand-alone tactic. We work hard to attract and retain our scarce 
resource. We realize that all employees need an investment in skills, 
communication & leadership training. Gone are the days of the ``farm 
boy'' who grew up working along the side of his father. That boy not 
only learned work ethic by working from a very young age but also 
learned that he had the ability to learn and do new things every day 
with his hands. Those days brought people like my father to the 
construction industry in the 1960s. He learned by doing and out of 
necessity to support himself and his family. His learning was by 
watching, listening and doing. He learned not only to do, but also to 
think about how to do it better.
    The initial building of the interstate system in the 60s, 70s and 
80s was supported on the hard-working backs of people like my father 
and many other fathers. Growing up in the 70s and 80s and like most, if 
not all, of my peers, we were told to get a ``college'' education by 
our parents & teachers so that we didn't have to dig ditches or build 
bridges. Many of us did. Now, we face a dilemma as we push our children 
out of the nest. How do we change the image and mindset of the 
influencers? The educators and parents are the influencers. They don't 
realize how ``good'' our jobs are.
    We need to invest in changing their perspective. At construction 
industry gatherings in the 90s, we started hearing that we had a 
looming demographic problem. People were leaving the industry at a much 
faster pace than they were entering the industry. This proved to be 
fact. Add on top of that the great recession of 2008-2009 when 
unemployment increased and at alarming pace in our overall economy. It 
was significantly worse in the construction industry. That event made 
what was already and downward employment trend in our industry worse. 
Generally, the people that were unemployed by our industry never 
returned to the industry when the industry entered recovery. They had 
either moved on to other industries or retired out.
    Fast forward . . . it is now 2017. We have a collision occurring. 
Infrastructure investment is recognized to be Critical Need both 
locally and nationally and our citizens are willing to reinvest. At the 
same time, the skilled Construction worker force is in scarce supply 
and largely untrained.
    How do we do the first without addressing the second? The reality 
is that the industry will rise with innovation and efficiency, but the 
need for a trained & skilled workforce will not go away. The technology 
and efficiency improvements will require people with specific skills. 
People like:

   Diesel Mechanics

   Service Technicians

   Electronics Technicians

   GPS Specialists

   3 and 4D modeling specialists

   Scheduling Experts

   Project Managers

   Engineers

    There will continue to be the need for skilled laborers, skilled 
trades people & skilled equipment operators. What are those skill 
needs?

   Concrete Finishers

   Carpenters

   Electricians

   Plumbers

   Welders

   HVAC Specialists

   Equipment operators who have basic operational skills & 
        understand technology

   Truck Drivers

    As opposed to the 1960s and 1970s, close to 100 percent of our 
American workforce comes to us having never: changed the oil in their 
own car; driven anything but an automatic transmission vehicle; scooped 
their own snow let alone dirt or gravel; fixed anything that was 
broken; built even a bookshelf; wired their own light switch; etc. All 
those things and many more, my dad and yours probably came to the 
workforce having done. Not only do we as infrastructure contractors 
build projects, we train every single worker to do even the simplest 
tasks. We aren't backing down. We are up for the TASK! If you visit any 
contractor who is in this ``gig'' for the long haul, you will see they 
are:

   Training hands-on trade skills

   Training to keep their workers safe

   Training soft skills including work ethic, interpersonal 
        skills and leadership skills

   Investing in Technology to make them more efficient

    Not only are they training, they are providing good solid jobs that 
pay well and provide a multitude of perks and benefits. We need HELP! 
This training and investment takes time and money. Please support 
investing in programs that enhance and support the great jobs that our 
industry offers.--Kari Karst, President, BX Civil & Construction, Inc. 
Dell Rapids, SD
Glacial Lakes Energy, LLC
    I can say that we consistently incur higher costs (such as 
overtime) when we cannot easily and readily find qualified labor. In 
our production operation, the plant has to run and we are forced to 
pull in operations staff from other shifts to cover the vacancies that 
sometimes sit for months. This results in higher overtime costs and 
potential ``burn-out'' of our existing team members.
    Another frustrating aspect is the quality and quantity of 
applications we receive. Many times, we receive only a 1-3 applicants 
with less than desirable backgrounds for a position which gives us 
limited options in the selection process.--James A. Seurer, Chief 
Executive Officer, Glacial Lakes Energy, LLC, Watertown, SD 57201
Sheehan Mack Sales and Equipment
    In the past 20 years or ever since the DOT COM boom is seems that 
nationwide we have had a decline in the amount of qualified individuals 
entering the workforce with a skilled trade (technicians). In the same 
time machines, trucks and equipment have all become more complex and 
more difficult to repair. The demands on our Technicians are greater 
now than they have ever been in the past while the supply of qualified 
individuals has only shrunken. With the combination of these two 
factors companies like ours have felt the pain of the shrinking 
workforce in the form of increased cost, lost revenue and customer 
satisfaction.
    Limited skilled labor in the workforce has

   Increase wages at alarming rates

   Increased the burden of training on us

   Hurt our ability to respond to customers quickly and 
        efficiently

   Created a labor market where there is more demand for 
        skilled labor than supply (this has helped to lower loyalty and 
        increased the likelihood of techs job hopping)

    Let's look at what the shortage of trained individuals costs us

   Hiring, sign on bonus' are common place now (Between $2,000 
        and $5,000)

   Wages have increased to more than 17 percent over median 
        income for State of SD

   Training costs have skyrocketed to about $100,000 per 
        technician to reach required levels of training once they are 
        hired

    Now, let's look at the indirect costs of not having trained skilled 
labor

   Loss income from supporting products we sell--less work 
        completed

   Increase in customer downtime--less production

   Loss in New Machine and Truck Sales--customer are more 
        concerned now than ever with support after the sale

   Increased lead time to begin repairs, longer repair times

    I have calculated that that these direct and indirect costs to my 
business are in the hundreds of thousands if not more than a million 
dollars per year. Moving into our busy construction season I am afraid 
that the lack of trained individuals may be at CRISIS Levels.
    Building our labor force with skilled labor is more important now 
than ever before! We need high school programs, post-secondary programs 
and technical institutes geared up and adding top talent into our 
workforce. We need High School Counselors to see and understand the 
need for Skilled Labor in our workforce. We need Parents and Students 
to know and understand the great earning potential that is available to 
them after attending a trade school and incurring very little school 
debt. We need technicians that are great in math, science and have 
people skills. We need to change the mindset or perception on skilled 
labor. Skilled labor jobs pay well and these jobs are out there right 
now needing top candidates. These skilled worker once in the field are 
our next Service Managers, General Managers, Fleet Managers and leaders 
of our industry.--Mike Sheehan, President, Sheehan Mack Sales and 
Equipment, Sioux Falls, Aberdeen, Rapid City, SD
                                 ______
                                 
       Attacment 2: An Overview of Lake Area Technical Institute
                     LAKE AREA TECHNICAL INSTITUTE
   2017 Recipient of the Aspen Prize for Community College Excellence
        This point paper is a brief overview of the high points for 
        Lake Area Technical Institute since our 2015. Much of the press 
        and national level engagement stems from our Aspen Prize 
        recognition.
    New Mission Statement reflects new definition of success: Lake Area 
Technical Institute: superior, comprehensive technical education that 
changes lives and launches careers.
    Philosophy: What is different about Lake Area Tech? Some things we 
believe:

   Success is defined as placement rather than graduation.

     College is a pathway, not a destination.

     It about what a student wants to be. Changes the 
            conversation, the motivation, and the connection.

     We do not place students, we give them the skills 
            (soft and hard) and opportunities to be placed.

   Connections are key to student success

     Every job is important to student success. Faculty are 
            student advisors, guiding them through college and into 
            their career. Staff in all positions mentors students.

     Lake Area Tech fosters a culture of caring. 
            Statistically it is more important for students to make a 
            meaningful connection on campus than any other student 
            success factor.

     We tell every student ``Be around people who care 
            about you and care about those around you, and you will 
            both succeed''.

     The community and industry play key roles in student 
            desire and confidence.

     LATI new Scholar Stone connections current students 
            with Alumni and heritage.

   Lake Area Tech is committed to a participatory management 
        approach and a continuous planning process.

   Community/Industry connections, support, and oversight are 
        crucial to LATI's culture and success.

     Efforts to engage industry in student success.

     Added two Business Partnership Specialist position to 
            further enhance industry's understanding of their role in 
            student success.

     LATI Community and Business ``Learn where you Earn'' 
            pilot projects underway.

    Success Indicators:

   Enrollment: 13 consecutive years of enrollment growth; the 
        student population is at the level projected for 2033.

   Retention: 83 percent, highest in the Nation. WalletHub 
        cites LATI #1 graduation rates as 20 times that of some 
        community colleges.

   Placement: Increased from 98 percent to 99.12 percent 
        employed or continuing education. Two programs had average 
        graduate salaries over $50,000 per year six months after 
        graduation.

   Native American: Graduation rate increased to 68.75 percent. 
        Placement of 100 percent. Average salary after graduation 
        higher than their peers.

   Low-income students: Retention is up. 8 percent gap in 
        graduation from their peers has been removed, in fact last year 
        low-income students outperformed their peers in graduation rate 
        (84 percent to 79 percent).

   Dual Credit: Our high school dual credit program has 
        doubled. This semester we are providing over 1,000 credit hours 
        of dual credit to area HS students.

   Build Dakota Scholarship program: Key success factor to 
        keeping college affordable. Couple with Governor's buy down of 
        $10/credit on student tuition.

   Overwhelming Community Support:

   K-14 System: Lake Area Tech and the Watertown School 
        District are uniquely a true K-14 system. In Fall 2014, high 
        school students across the state are enrolled in over 1,000 
        dual credits.

   Community Embrace: The Watertown community embraces our 
        students and our mission.

   Industry Advisory Boards: Each program engages industry 
        advisory boards to ensure our graduates meet the need of 
        industry. Over 500 business and industry partners participate 
        in educating and employing our students.

   Addressing our growth needs: Seeing LATI need for future 
        growth and the potential lack of state funding, the community 
        has stepped forward and formed the ``Creative Finance Advisory 
        Committee'' focused on providing funding options for LATI 
        (recent endeavor).

   Build Dakota Scholarships (BDS). T. Denny Sanford and 
        Governor Daugaard contributed $50 million to fund full-ride 
        scholarships in high-demand workforce programs starting in Fall 
        2015. Industry partners added $185,000 through the Stretch the 
        Million program that matches the industry contribution of 50 
        percent of the full-ride scholarship with Build Dakota funding.

   Amendment R. The voters of the state passed an amendment to 
        South Dakota's constitution recognizing the technical 
        institutes and solidifying our workforce development mission.

   House Bill 1182: The legislature passed a sales tax to, in 
        part, help SD technical institutes offer industry competitive 
        salary adjustments to recruit/retain instructors.
President Barack Obama, 2015 Lake Area Tech Commencement Address (93rd 
        such address in U.S. history by a sitting President)
(EXCERPT from White House release)
    ``Well, the reason is because I believe that in a fast-paced, 
hyper-connected, constantly changing world, there are few institutions 
that are more important to America's economic future than community 
colleges. And there are few community colleges that are as important as 
Lake Area Tech. This school is leading the way.
    Compared with other community colleges, the graduation rate at Lake 
Area is more than three times the national average. Three times. 
(Applause.) Within six months, 98 percent of those graduates--you--are 
either employed or continuing your education. The average Lake Area 
graduate who enters the workforce earns nearly 50 percent more than 
other new hires in this region. And as has already been noted, since 
2011, there has been an award for excellence called the ``Aspen 
Prize.'' It's basically the Oscars for great community colleges. Only 
two community colleges in the country made the top 10 every year the 
prize has been awarded--and one of them is Lake Area Tech. (Applause.)
    This is not an accident. It's the result of a relentless focus on 
teaching real-world skills that lead directly to a job. In your time 
here, you've done hands-on work with companies across the upper 
Midwest. Employers even help design the curriculum. You work direct 
with the tools and the technology that you'll encounter in the 
workforce--from car engines to welding equipment to your new 
MakerSpace, with 3D printers that were actually built by Lake Area 
students. And your instructors haven't just taught you new skills--
they've helped place you in new careers.
    And you might think all this attention on job training comes at the 
expense of great teaching--but if anything, the opposite is true. This 
is the kind of place where students are on a first-name basis with 
their instructors. If you call at 10 p.m., they'll answer your call--
although I hope you don't do that, because folks need their sleep. If 
you don't make it to morning classes, they'll check up on you and make 
sure you're okay. I heard one student who skipped school to go hunting 
found that out the hard way that somebody was going to check up on you. 
(Laughter.) One of today's graduates, Colin Blume--where's Colin? Raise 
your hand. (Applause.) Stand up, Colin, just so you--hey, that's Colin. 
Colin is a big guy, by the way. So Colin--I'm going to quote Colin on 
this. He said, ``You're family, and they'll do anything to help you 
along the way.'' ''
                                 ______
                                 
    International press story on LATI: Prompted by Aspen notoriety, 
LATI was featured in ``The TakeAway'', which is daily news show out of 
New York City, but broadcast nationally, the title of article is: 
What's the secret to a nation full of successful community colleges? 
South Dakota may have the answer. They highlight LATI's ThinkBIG 
program. The Takeaway is an award-winning daily news show produced by 
WNYC in partnership with The New York Times and Public Radio 
International. The show airs across the country on more than 200 
stations, reaching upwards of 2 million listeners nationwide. Their 
goals include deepening public understanding of the role of community 
colleges in driving economic growth and expanding social mobility in 
America. ``The TakeAway'' featured LATI in two stories:

        Story 1: http://www.wnyc.org/story/introducing-lake-area-
        technical-institute/

        Story 2: http://www.pri.org/stories/2015-11-18/whats-secret-
        nation-full-successful-community-colleges-south-dakota-may-have 
        (The audio interview is what is actually airing.)
                                 ______
                                 
    PBS Documentary features LATI. The series ``Dropping back in'' is a 
documentary produced by Kentucky Education TV, and was about 14 months 
in the making. LATI is featured in the fourth episode, highlighting our 
commitment to student success of underprivileged students. The LATI 
segment in the bottom left-hand side segment (titled Lake Area 
Technical Institute) on the linked page: http://www.droppingbackin.org/
the-stories/
    Other Stories of our Success:

   Only college in the Nation to finish the Aspen Prize 
        competition as a Finalist with Distinction all three times.

   Participated in the Championing Completion of Low Income 
        Students strategy session with Dr. King, the U.S. Secretary of 
        the Department of Education, as one of only two community 
        colleges represented.

   Selected to author a case study for the Aspen Institute's 
        leadership curriculum. This curriculum for Aspen's Presidential 
        Fellowship program demonstrates LATI's unique approach to 
        problem solving and student success.

   Invited by the White House to participate in the College 
        Promise/Heads Up, It's on Us, & College Affordability 
        campaigns.

   Low Income Student Success: LATI was featured in an Aspen 
        Institute publication ``Structural Equity: Big-Picture Thinking 
        & Partnerships That Improve Community College Student 
        Outcomes'' for improving the graduation rate of Pell Grant 
        recipients from 8 percentage points behind non-Pell students to 
        surpassing the average graduation rate for all students.

   Hosted the White House Administration for a session on the 
        College Promise Campaign at the annual Western Interstate 
        Commission for Higher Education annual conference.

    Highlighted National Accolades:

   Aspen Finalist with Distinction (2011, 2013, 2015)

   Presidents Community Service Honor Roll--seven times named 
        Honor Roll designations, over 80,000 hours of community service 
        and community learning annually

   Military Friendly Designation--seven years

   Marcom National Marketing Awards--Platinum Award winner for 
        marketing (twice) and Gold awardees multiple times

   Digital Community Colleges--Top 10 in the Nation two years 
        in a row

   Great Colleges to Work For--7 years with Honor Roll 
        distinction

   Numerous online awards: WalletHub, Niche, etc.



    The Chairman. Thank you, Colonel Cartney.
    Mr. Neely?

        STATEMENT OF JOHN J. NEELY III, VICE PRESIDENT,

          LAW AND PUBLIC AFFAIRS, GULFSTREAM AEROSPACE

                  (A GENERAL DYNAMICS COMPANY)

    Mr. Neely. Mr. Chairman, Ranking Member Nelson, members of 
the Committee, on behalf of Gulfstream's 15,000 employees, I'm 
honored to be here to talk to you about this very timely and 
important subject. It's important to industry, absolutely, but, 
quite frankly, it is much, much more important for the 
individuals in this country whose talents are going untapped. 
That's just a shame.
    As context for my remarks, Gulfstream's business--we 
design, manufacture, and provide maintenance services on 
business aircraft. Our headquarters and largest manufacturing 
facilities as well as our largest maintenance base is in 
Savannah, Georgia, where we have approximately 10,000 of our 
total 15,000 employees. We also do business in six other 
states.
    Very significantly, I think, for this Committee and the 
competitiveness issue that we're facing--not just competitive 
within the U.S. but certainly competitive internationally--all 
of Gulfstream's key competitors are international. We have 
Bombardier in Canada, Dassault in France, and Embraer in 
Brazil. Also significant in terms of balance of trade, 50 
percent of Gulfstream's sales are international. In previous 
years, that has been an even higher percentage.
    Very significantly, if you go back and look at 
approximately the last 20 years, that international component 
has grown to what, previously, I like to say from the Wright 
brothers through the early 2000s, was pretty consistently about 
20 percent international. Since the mid-2000s, we've seen that 
anywhere from 50 percent to as high as 70 percent in one given 
year. So this is very important to competitiveness and balance 
of trade.
    I think it's fair and clear to say that in any company, the 
most valuable asset that company has is its people, and that is 
particularly true at Gulfstream, given the nature of our 
advanced manufacturing and very high-tech maintenance work that 
we do. With that in mind, over the last several years--and, 
frankly, the last 10 years, in particular, as we've experienced 
significant growth--we've evolved a multifaceted strategy for 
dealing with the issues that we're here addressing today.
    That strategy has four focal points, and they are: first, 
elementary, middle, and high school; second, technical school 
engagement and recruiting; third, military engagement and 
recruiting; and fourth, of course, universities for our 
engineering and other related skills that require, indeed, 4-
year degrees.
    I'll make an important aside here to pick up on a comment 
that Senator Nelson made in terms of the quality of skills and 
leadership coming out of the U.S. military. He is absolutely 
right, and I'm very proud to say that as a direct result of 
that, nearly 30 percent of Gulfstream's U.S. employees are U.S. 
veterans, and that's not a coincidence. That's the case because 
we find that the U.S. military does an excellent job training 
in technical skills, avionics, mechanics, any number of other 
hands-on skill sets, and they also come out of the military, of 
course, with a strong work ethic and an understanding of what 
leadership means and how to operate in a complex environment.
    So, Senator, you could not be more accurate in that regard.
    Back to our strategy, a cornerstone to this all-of-the-
above, this multifaceted approach that I just described--a 
cornerstone of that is something that's been front and center 
in the comments that everybody in this room has made so far 
today, and that's awareness. By far, the biggest problem that 
we face in this area is awareness that these opportunities 
exist, awareness that these jobs are excellent jobs, awareness 
that in addition to being excellent jobs they can be personally 
rewarding and they can be very financially rewarding.
    An airplane mechanic coming in making six figures is 
absolutely reality, and that career path can take you off the 
shop floor into other areas, and that's something that we 
really have to struggle to get across. And getting it across 
is, of course, important to the students, but, frankly, 
probably more importantly is getting it across to the parents 
and the teachers, not to have a kid come home and say, ``I was 
at Gulfstream and I saw this great job being an airplane 
mechanic, and Mom and Dad, that's what I want to do,'' and have 
the parent look at the child and say, ``My God, the kid's a 
failure--doesn't want to go to 4-year college.'' That's a 
tragedy.
    There is good news, and this is an important point. Without 
exception, in every state in the union where we do business, 
awareness amongst local, state, and Federal leaders is high and 
getting higher. Now, we do have a lot of work to be done to 
close this gap, but I'm thrilled to be able to report, 
certainly from our perspective, that we're on the right track. 
Momentum is building, but let's please keep that momentum 
going.
    Thank you for your time.
    [The prepared statement of Mr. Neely follows:]

Prepared Statement of John J. Neely III, Vice President, Law and Public 
       Affairs, Gulfstream Aerospace (a General Dynamics Company)
    Mr. Chairman, Ranking Member Nelson, and members of the Committee, 
thank you for the opportunity to appear before you today.
    I am honored to be here representing the 15,000 women and men of 
Gulfstream Aerospace. The issues being addressed here are critically 
important, and timely. They are important to advanced manufacturing 
companies like Gulfstream, and even more important to the individuals 
in this country who are missing great opportunities because their 
talent is left untapped.
    The most valuable asset of any company is its employees, and that 
is particularly true at Gulfstream. With that in mind, we have evolved 
a workforce development strategy for the many technical skills required 
in our business. Although this effort is very much a work in progress, 
Gulfstream is honored to share our experience with this Committee.
1. Gulfstream Operations Overview
    As context for my remarks, it is important to understand 
Gulfstream's operations. We have two distinct but very interrelated 
lines of business. First, we design, manufacture and sell business 
aircraft. The second distinct area is our Gulfstream aircraft 
maintenance, repair and overhaul (``MRO'') business, which we refer to 
as Product Support.
    Our current production models include the G280, G550 and G650/
G650ER, all of which are currently in-service with customers, plus the 
G500 and G600 that both are in flight test working towards Federal 
Aviation Administration (``FAA'') Certification.
    Although the majority of our aircraft are used in traditional 
business aircraft roles, we have a strong and growing business with 
Special Mission configurations. This business is well illustrated by 
our highly successful SIGINT programs with Israel--the SEMA and CAEW 
Programs--and a similar configuration currently competing for the USAF 
JSTARS and Compass Call programs.
    Our business is very international from both competition and sales 
standpoints. All of our key competitors are located outside of the 
United States: Bombardier in Canada, Dassault in France and Embraer in 
Brazil. With sales, approximately fifty percent (50 percent) of our new 
aircraft sales are in the United States and approximately fifty percent 
(50 percent) are international. From a balance of trade perspective, it 
is instructive to note that the percentage of our international sales 
has grown over the last fifteen (15) to twenty (20) years from roughly 
twenty percent (20 percent) to fifty percent (50 percent).
    Gulfstream's corporate headquarters, largest manufacturing site and 
largest MRO base are in Savannah, Georgia, where approximately ten 
thousand (10,000) of our fifteen thousand (15,000) person workforce is 
based. Our operations also include the following facilities:

   Locations with both Manufacturing and MRO Operations

     Long Beach, California

     Dallas, Texas

     Appleton, Wisconsin

   Locations with MRO Operations

     West Palm Beach, Florida

     Brunswick, Georgia

     Westfield, Massachusetts

     Las Vegas, Nevada
2. Gulfstream's Workforce Development Strategy
    Over the past ten (10) years, Gulfstream has become increasingly 
proactive in nurturing and recruiting new talent for our technical 
jobs. We have done so by focusing on four areas:

   Elementary, Middle School and High School Student Engagement

   Technical School Engagement and Recruiting

   Military Engagement and Recruiting

   University Engagement and Recruiting

    This work also is supplemented by our post-hire internal training 
programs, which include initial training and advanced training using 
our own employees and, for advanced maintenance and pilot training, 
FlightSafety International.
    A foundational point underpinning this strategy is that our younger 
generations need help understanding what great opportunities are 
available in technical fields, and how to take advantage of those 
opportunities. This awareness work must include students and, likely 
more importantly, their parents and teachers. So, our approach is to 
start with young students to build awareness, build desire and, through 
mentoring and other resources, guide them down the path towards those 
goals.
    We continue this same basic approach for Technical Colleges, 
Military and Universities, but with a more direct connection between 
the individual and a specific job at Gulfstream for which that person 
is suited.
3. External Workforce Development Resources
    Although we indeed do have a technical skills gap in this country, 
there is a good news side to this story. As evidenced by this hearing 
itself, there is a growing understanding of the problem and a 
corresponding application of resources to address it. Gulfstream's 
experience, in every state in which we do business, is that local, 
state and Federal organizations are investing in new ideas and 
approaches for changing the paradigm.
    Gulfstream's workforce development strategy relies very heavily on 
these external resources. Indeed, you will hear several examples as I 
review Gulfstream's specific activities.
    On this point, I want to thank the Committee for including in the 
Senate-passed FAA Reauthorization bill last year a section regarding 
safety workforce training for the FAA. This section focuses on 
knowledge sharing opportunities between the FAA and industry in new 
technologies, best practices, and other areas of interest related to 
safety oversight. It also fosters an inspector and engineer workforce 
at the FAA that can implement successful risk-based approaches to 
safety. Gulfstream strongly supports this initiative and the entire 
certification title. We hope Congress can pass the entire package of 
certification reforms this year to benefit safety, competitiveness, and 
job growth in the industry. Fully utilizing ODA authorities, and 
facilitating validation and acceptance of FAA safety standards and 
product approvals globally, is critical and time-sensitive. Continued 
progress on workforce training and these reforms will leave U.S. 
industry in a much strengthened competitive position.
4. Elementary, Middle and High Schools
    Gulfstream engages younger students because, in our view, building 
awareness and excitement early on helps guide students in their 
academic decisions, and other life choices, during those formative 
years. For example, a ninth grader who is excited about a career as an 
aviation mechanic will have a very different perspective on his or her 
math and science courses than a classmate with no particular career in 
mind.
    Our younger student engagement falls into two categories: targeted 
individual student engagement and awareness activities. These two sets 
of activities work well together by raising awareness across a large 
population while, through the targeted engagements, providing in-depth 
substance that validates the message with real world successes.
a. Targeted Student Engagement
Youth Apprentice Program (``YAP'')
    Gulfstream's YAP, which we operate in partnership with local High 
Schools, allows students to earn High School credits while earning 
money working part time during the school year at Gulfstream. This 
provides real world experience to students, and hands-on mentoring by 
their direct supervisors and co-workers, which they use to identify and 
further their personal career paths.
    Our 2016-17 YAP has approximately seventy (70) High School Juniors 
and Seniors in Georgia, California and Texas. They are working in 
thirty-seven (37) different job functions, including aircraft assembly, 
cabinet shop, quality control, accounting, aircraft maintenance 
operations, engineering and our Advanced Aircraft Integrated Test 
Facility. Just like a potential full-time employee, students fill out 
applications, apply for specific jobs using the same computer-based 
system used for full time employees and are interviewed in person by 
their hiring manager. Once hired as apprentices, they work fifteen (15) 
to twenty five (25) hours per week, are paid ten dollars ($10) per hour 
and earn High School Credits for their work.
    An important aspect of this program is its ability to correlate 
students' academic study with future job prospects. An apprentice can 
see first-hand that math and writing skills, for example, are necessary 
for their future success and not simply abstract concepts without any 
connection to their future success.
Technical/Vocational High Schools
    The increase in High Schools with specific technical curricula is 
an effective tool in this area as well. By incorporating courses 
directed at specific technical careers, these schools bring technical 
career opportunities quite literally directly into the classroom.
    Gulfstream supports a number of these schools with funding, 
equipment and mentors, and we encourage others to do so. Technical High 
schools with which we are involved include Woodville-Tompkins Technical 
and Career High School (Aviation, Manufacturing--Georgia), Westfield 
Vocational School (Aviation--Massachusetts), West Michigan Aviation 
Academy (Aviation--Michigan) and Effingham County College and Career 
Academy (Engineering--Georgia).
Dual High School and Technical College Enrollment
    An example of another program with similar impact is Georgia's Dual 
Enrollment Program. This allows High School students with an interest 
in technical jobs to take courses at one of the State's Technical 
Colleges and simultaneously earn credits toward both High School 
graduation and a Technical College Degree.
    Programs like this get High School students actively engaged in 
making career choices while also expediting their entry into the 
workforce, and financial independence. We encourage support for 
programs such as this, and are interested in exploring a combination of 
this type of program with apprenticeships.
Student Leadership Program (``SLP'')
    In addition to the gap in technical skills themselves, many young 
students also lack the needed soft life-skills and ability to make an 
informed decision about their own careers. To address this issue, 
Gulfstream started SLP in 2008 as a means to mentor at-risk High School 
students and help them develop life skills, explore the many available 
career paths and, by their Senior year, develop and implement post-
graduation career plan for themselves. Since then, Gulfstream has 
expanded SLP to Brunswick, Georgia and Appleton, Wisconsin.
    SLP in Savannah, for example, is a four (4) year program that 
begins in the students' Freshman year. Mentoring sessions are 
facilitated by a professional team retained by Gulfstream, and 
volunteer mentors drawn from Gulfstream and approximately forty (40) 
other area businesses. Of the 1,500 applications typically received 
each year, one hundred fifty (150) students are selected for the 
incoming Freshman class. Once selected, the students who remain with 
the program stay together throughout their four (4) years of High 
School.
    Freshman year is focused on developing students' soft skills such 
as appropriate work attire, etiquette and interview skills. Throughout 
the remaining three years, students explore available career 
opportunities in detail--e.g., trades and Technical Schools, military, 
four-year degree programs--select their desired path, develop a 
specific plan for doing so and execute that plan so that they graduate 
and step right into the next phase of their life.
    Approximately ninety-six percent (96 percent) of the enrolled 
students since inception remained in the program through graduation. In 
light of the significantly lower graduation rates for these schools, 
Gulfstream is proud if this program's success.
b. Awareness Activities
    Gulfstream, like many companies, engages in a wide range of 
activities to raise awareness among students, parents and teachers. 
Here are a few examples of our activities in this area.
Job Shadow Programs
    Our Westfield, Massachusetts, and Dallas, Texas, facilities both 
have successful job shadow programs. In Westfield, we partner with the 
Westfield Vocational Technical High School, which has a robust aviation 
program, to bring students into our MRO facility and shadow our 
aircraft maintenance technicians during their work day. This effort is 
part of the FAA's ``Walk In My Boots'' initiative aimed at exposing 
students to the benefit of an aviation maintenance career.
    Similarly, in Dallas, we partner with local High Schools and host 
students for two days of aviation job experiences. Activities include 
wiring the avionics for an aircraft, working with sheet metal, making a 
sales pitch and visiting Dallas Love Field's control tower.
GAMA/Build A Plane Aviation Design Challenge
    Gulfstream also supports the General Aviation Manufacturer's 
Association (``GAMA'')/Build A Plane Design Challenge, which started in 
2013 as a way to introduce High School students to aviation careers. 
For this competition, schools receive student and teacher copies of the 
Fly to Learn curriculum and software powered by X-Plane. Over the 
course of six weeks, they learn about topics such as the four forces of 
flight, aspect ratio, and even advanced subjects such as supersonic 
flight. They then compete in a fly-off that requires them to modify a 
virtual airplane to fly a specific tasked mission in a simulator. GAMA 
takes into account the score from this flyoff, as well as a checklist 
of the steps they took to complete the flight, a summary of the design 
changes they made to the airplane, and three videos submitted 
throughout the competition on what they learned.
    Weyauwega-Fremont High School in Weyauwega, Wisconsin is the winner 
of the 2016 GAMA/Build A Plane Aviation Design Challenge. As the prize, 
four students, one teacher, and one chaperone traveled to Glasair 
Aviation in Arlington, Washington, to build a Glasair Sportsman 
aircraft. For the winning team, the hands-on experience working side-
by-side with experts as they build a real airplane is phenomenal.
STARBASE
    Gulfstream partners with the U.S. Department of Defense to sponsor 
week-long camps for fifth-grade students at Hunter Army Airfield in 
Savannah, Georgia. The program offers ``hands-on, mind-on'' activities 
meant to spark student interest in STEM programs. Students interact 
with military personnel by working on computers, flying aircraft 
simulators and participating in other hands-on activities.
5. Technical Colleges
    In Gulfstream's business, Technical Colleges are a critical 
pipeline for developing tradesmen and craftsmen for work in our 
manufacturing and MRO operations. Although these schools' existing, 
standard programs provide a solid skills development base, our most 
valuable work with them has been in situations where we have helped 
develop the curricula.
    Georgia's High Demand Career Initiative is an excellent example of 
this approach. This initiative recognizes that manufacturing and other 
technologies are changing so rapidly that it is difficult, if not 
impossible, for schools to keep their curricula aligned with companies' 
needs. That is true with current needs, but even more so for what 
industry will need in three (3), five (5) or ten (10) years. To solve 
this problem, this initiative seeks to bring companies into the schools 
to help plan and develop course content. Significantly, this can be 
part of a full degree program or simply for a Certificate program in 
which a student need only invest a number of weeks or months to earn a 
Certificate that demonstrates that they have specific skills for a 
specific job.
    This joint development can range from simply including industry on 
Advisory Boards, to the other end of the spectrum where a business co-
develops and even co-teaches a course. Several examples from 
Gulfstream's experience, we believe, will give the Committee insight.
Example: A&P School
    Gulfstream's MRO operations are an important, and growing, part of 
our business across the country. FAA regulations require that aircraft 
maintenance technicians have an FAA-issued Airframe and Powerplant 
license (an ``A&P License''). Given our need for qualified A&P 
technicians, we partnered with the A&P School of the Savannah Technical 
College, which is part of the Technical College System of Georgia, to 
ensure that its courses aligned with our needs.
    The school appointed our experts to the Advisory Board. Gulfstream 
donated equipment to the school to provide the students with real-world 
equipment, including a complete Gulfstream aircraft--a model G100 that 
had reached the end of its useful life. By being an active participant 
in the A&P School's curriculum development, and ongoing class work, we 
are able to help the faculty stay aligned with the latest industry 
techniques and get to know the students.
Example: Advanced Cabinet Maker Course
    As an excellent example of the in-depth approach, a number of years 
ago Gulfstream was having difficulty finding skilled cabinet makers to 
build furniture for our aircraft interiors. To address this issue, 
Gulfstream partnered with Savannah Technical College. In doing so, we 
learned that other area businesses in the boat and home construction 
industries were having similar issues.
    Gulfstream paired our cabinet shop master craftsmen with the school 
to develop a course. We also provided a master craftsman to co-teach 
the course with the school's faculty. This provided the double-benefit 
of ensuring that instruction matched our requirements and it allowed 
our instructor to identify the top students for recruitment to 
Gulfstream.
Example: Basic Skills Course
    Gulfstream has difficulty finding qualified entry-level candidates 
for our manufacturing operations. Illustrating the breadth of the 
skills gap in some areas, one candidate for sheet metal work--whose 
resume suggested that he had basic skills--was asked in a shop setting 
to bring the instructor a Phillips head screwdriver. His response was 
to ask the instructor whether that is the one that looks like a ``plus 
sign'' or a ``minus sign.'' Clearly, that person did not come with the 
necessary basic skills to enter Gulfstream's manufacturing workforce.
    To help address this, we are partnering with the local Technical 
College to develop a basic skills Certificate course. Although still in 
development, the most likely approach is to develop a set of specific 
skills tests and a course for teaching those skills. Candidates who 
believe that they already have the necessary skills would take the 
hands-on tests, and by passing obtain their Certificate without taking 
the full course. Candidates without those skills coming in, of course, 
would go through the full course.
Example: Manufacturing Technology Transition Training
    Gulfstream's G650, which first entered customer service in 2012, is 
built using significantly different manufacturing techniques than 
aircraft produced previously. Consequently, ramp up of that production 
line necessitated transition training for our existing employees moving 
from other aircraft to the G650.
    To assist, we enlisted the help of Georgia's Quick Start Program. 
Quick Start, which is a part of the Technical College System of 
Georgia, offers tailored employee training services to qualified 
companies. Quick Start instructors paired with our team to develop 
transition training programs for specific, proprietary manufacturing 
techniques used for the G650. Because the program's mandate allows it 
to enter into Proprietary Information Agreements with its customers, 
Gulfstream was able to use this resource without jeopardizing our 
valuable trade secrets.
6. Military
    Recruiting from U.S. Military Veterans is a vital part of 
Gulfstream's strategy for finding employees with the necessary 
technical skills. As direct evidence of that fact, nearly thirty 
percent (30 percent) of Gulfstream's domestic employees are U.S. 
Military Veterans. This high percentage is a testament to the quality 
of training within our Armed Services, and to the cultural fit between 
them and Gulfstream.
    Gulfstream recruits veterans heavily because of the combination of 
technical skills, disciplined work ethic and leadership skills that 
they so consistently demonstrate. Aircraft maintenance and avionics 
technicians, for example, come to Gulfstream with skills and experience 
that enable them to quickly integrate into our operations.
    To recruit Veterans, we use a proactive, comprehensive approach 
that includes extensive in-person outreach to military bases--including 
participation in Transition Assistance Program Classes at those bases--
customized Veteran recruitment advertising, and active participation in 
a number of Veterans organizations.
7. Engineering Universities
    Our engagement with Universities relies heavily on our intern and 
co-op programs with those schools. Also, in keeping with the High 
Demand Career Initiative concepts discussed above, we are becoming 
increasingly active in providing input on specific skills-needs and 
engaging students in for-credit research projects that complement their 
skills development and our research needs.
    Like many companies, we have intern and full co-op programs in our 
engineering department. Interns and co-ops are hired through a 
competitive selection process. While working, they are paid a 
competitive hourly wage and receive 401k and life insurance benefits. 
Gulfstream also provides housing for students who do not live in the 
local area. In 2016, we had one hundred eighty seven (187) interns and 
one hundred sixty two (162) co-ops.
    Interns typically work during their summer breaks. Co-ops alternate 
between a semester of school and a semester at Gulfstream, and must 
complete three (3) semesters at Gulfstream.
    These programs provide an excellent resource for hiring students 
with the right skills, and as importantly the right cultural fit, for 
Gulfstream. Students work alongside our full-time engineers our various 
programs. They also rotate between departments within engineering, so 
that they and we can find the best fit.
    The success of these programs is demonstrated by the hiring. Over 
ninety percent (90 percent) of Gulfstream's entry-level engineering 
positions are filled through our intern and co-op programs.
    In keeping with the High Demand Career Initiative, we have 
developed and continue to mature our partnership agreements with 
Universities. These agreements include both formal and informal 
arrangements for research projects, mini-sabbatical opportunities for 
faculty to work at Gulfstream and Gulfstream participation in Advisory 
Boards.
    Mr. Chairman, Members of the Committee, I thank you for the 
opportunity to share Gulfstream's experience in this critically 
important area of skilled, technical workforce development.

    The Chairman. Thank you, Mr. Neely.
    Ms. Marks?

STATEMENT OF JUDITH MARKS, CHIEF EXECUTIVE OFFICER, SIEMENS USA

    Ms. Marks. Thank you, Mr. Chairman, Ranking Member Nelson, 
and members of the Committee. It's an absolute privilege to 
testify here today.
    As the CEO of Siemens here in the U.S., I'm proud to 
represent our over 50,000 U.S. employees who are located in all 
U.S. states and Puerto Rico. We have over 60 U.S. manufacturing 
sites, and we're actually a net exporter. We've reported 
revenue last year here in the U.S. of $23.7 billion, and $5.5 
billion of that revenue came from products that were made at 
our U.S. plants and shipped around the world.
    So even though we are a global company, we're proud to say 
we are U.S. local, and the U.S. is Siemens' largest market in 
the world. Our U.S. customers rely on Siemens to add value to 
their operations. Today, they're turning to Siemens to deploy 
software, hardware, and digital technologies so that they get 
the competitive advantage they need to retain and create high-
paying manufacturing jobs here in the U.S.
    This new technology requires workers to have new skills 
that simply weren't necessary in yesterday's manufacturing 
environment. Today, workers need new skills, rooted in the STEM 
fields, and they need education beyond high school. The 
nation's training and education systems weren't initially ready 
for this advanced manufacturing environment, and the skills gap 
is the result.
    At Siemens, we're now working to close this gap through 
what we call industrial reskilling. We invest approximately $50 
million annually for the training and continuing education of 
our U.S. workforce, and we have also made a strong effort to 
hire veterans. In the past few years, we've hired 2,500 
veterans, training them on the technical skills they need to 
work in our business.
    We've also focused on broader workforce development goals 
around three initiatives. First, we are adapting the proven 
German style apprenticeship model to the U.S. market, where we 
provide on-the-job training, working with our community college 
partners to train workers. We started in Charlotte, North 
Carolina, and we've since expanded it to three more states.
    But we also wanted to encourage other companies to 
replicate these efforts in the United States nationwide. So we 
worked with Alcoa, Dow, the National Association of 
Manufacturers, and the Department of Labor to develop a 
playbook for other employers and manufacturers seeking to 
launch similar programs.
    Second, we're committed to helping students gain experience 
working with the software and digital tools they will encounter 
in advanced manufacturing. Earlier this month, we invested 
three-quarters of a million dollars to help the University of 
Central Florida open a new lab where students will learn how to 
run a digital grid. UCF is one of many institutions in the U.S. 
where, in just the past few years, Siemens has granted a total 
of over $3 billion worth of our industrial software to 
incorporate into the curriculums.
    And, third, our Siemens Foundation, which I chair, is 
shining a spotlight on the opportunities for young adults in 
what we call STEM middle skill careers and on training models 
that work. As part of that effort, we are a proud supporter of 
the Aspen Prize that recognized the remarkable work of Colonel 
Cartney and the faculty at Lake Area Technical Institute in 
South Dakota. So as you can see, Siemens is eager to form 
partnerships that serve to both close the skills gap and boost 
U.S. competitiveness.
    I want to close by sharing with the Committee our 
additional commitments recently made to building a skilled U.S. 
workforce. We're going to double the size of our apprenticeship 
program here in the U.S., we're going to hire an additional 
1,000 new veterans over the next three years, and we're going 
to grant an additional $2 billion worth of our industrial 
software to academic and training institutions. This software 
is already used by 140,000 companies globally.
    I thank you again for the invitation to testify and I look 
forward to your questions.
    [The prepared statement of Ms. Marks follows:]

 Prepared Statement of Judith Marks, Chief Executive Officer, Siemens 
                                  USA
    Chairman Thune, Ranking Member Nelson, and Members of the 
Committee, thank you for inviting me to testify and share information 
about how Siemens is working to close the skills gap and boost U.S. 
competitiveness.
    Siemens is a global technology company that stands for engineering 
excellence, innovation, quality, and reliability. The company is using 
its global leadership in engineering and technology innovation to meet 
America's toughest challenges. From efficient power generation to 
digital factories, from wellhead to thermostat, and from medical 
diagnostics to locomotives and light rail vehicles, Siemens in the 
United States delivers solutions for industry, hospitals, utilities, 
cities and manufacturers. Siemens' next-generation software is used in 
every phase of product development, enabling manufacturers to optimize 
and customize equipment that touches American lives every day.
    Siemens has been in the U.S. for more than 160 years. The U.S. is 
now the company's largest market. In the past 15 years, Siemens has 
invested approximately $35 billion in America, successfully 
strengthening our U.S. presence while creating an even larger economic 
ripple effect. Today, more than 800,000 U.S. jobs are linked to 
Siemens' global business operations. We continue to invest in America; 
most recently, Siemens announced its plan to expand its digital 
industrial leadership with the acquisition of Oregon-based software 
company, Mentor Graphics.
    In the U.S. in Siemens' Fiscal Year 2016, the company reported 
revenue of $23.7 billion, including approximately $5.5 billion in 
exports. We directly employ approximately 50,000 people throughout all 
50 states and Puerto Rico. With more than 60 Siemens manufacturing 
sites, the U.S. is an extremely vital production location. It's one of 
our most important research centers where we invest more than $1 
billion in R&D annually and a key base from which Siemens exports 
globally.
    At Siemens, we pride ourselves on conducting business locally, 
especially here in the United States. At our core, we are a company 
that combines innovation with social responsibility. We believe our 
mission extends beyond our customers, our employees, and our 
shareholders. We also believe we must deliver lasting value to the 
communities we serve.
    In the U.S., one way we deliver this value is through our 
commitment to helping the U.S. establish a new era of advanced 
manufacturing, central to which are our efforts to build a skilled 
workforce. Advanced manufacturing is core to our Nation's strengths in 
research and development, in digital technologies, and in software 
development. It enables the U.S. to focus on producing high-value goods 
that support high-paying jobs. The skill requirements, however, have 
become much more rigorous, and Siemens has both a business need and a 
responsibility to help workers acquire these new, advanced skills. 
Therefore, Siemens' workforce development efforts are addressing the 
jobs of today as well as tomorrow. Our strategy is focused on workers 
at all stages of their careers, from new entrants into the workforce to 
dislocated workers seeking to re-enter, to current employees in need of 
re-skilling. We call this industrial reskilling.
    We invest approximately $50 million annually for the training and 
continuing education of our own U.S. workforce. Additionally, we are 
helping to build a new ecosystem of public and private sector 
partnerships that forge pathways to 21st century manufacturing skills 
and to economic security.
    Siemens' technology supports dozens of industries and hundreds of 
thousands of companies worldwide, and we understand the skills required 
to operate the technology. This knowledge is enabling Siemens to work 
closely with academic and training institutions to create a new and 
successful formula to address the skills gap.
21st Century Manufacturing Skills
    In the days since the Great Recession, manufacturing jobs have 
started to come back. What has also come back is a national 
appreciation for the critical role our manufacturing sector plays in 
supporting the American dream. There is universal support for creating 
and retaining U.S. manufacturing jobs.
    Former skill requirements for manufacturing and industry were 
primarily the willingness to work hard in physically demanding 
environments and learn repetitive tasks. In the 21st century, strong 
work ethic is only part of what is required. Today workers need to have 
technical skills earned through training and knowledge in science, 
technology, engineering, and mathematics--or STEM--earned through 
education beyond high school. A high school diploma alone is no longer 
a viable ticket to a manufacturing career, reflecting larger changes 
throughout our new, digital economy.
    As evidence of this, during the Great Recession, 80 percent of 
workers who lost their jobs had only a high school diploma. As jobs 
came back, workers with at least some college education filled more 
than 95 percent of new positions created.i Now, as we look 
ahead to 2020, two out of three jobs will require some postsecondary 
education, when, in the 1970s, three out of four jobs required a high 
school education or less.ii
---------------------------------------------------------------------------
    \i\ https://cew.georgetown.edu/cew-reports/americas-divided-
recovery/
    \ii\ Ibid.
---------------------------------------------------------------------------
    The skills gap is a reflection of this new reality. According to a 
Business Roundtable survey that Siemens participated in, 97 percent of 
member CEOs said that the skills shortage is a problem.iii 
Two-thirds of the companies were struggling to find qualified 
applicants for jobs requiring advanced computer knowledge. Forty-one 
percent of companies had a hard time filling jobs requiring advanced 
quantitative knowledge, while 38 percent said at least half of entry-
level applicants lacked basic STEM literacy.
---------------------------------------------------------------------------
    \iii\ Business Roundtable survey: http://businessroundtable.org/
issue-hub/closing-the-skills-gap
---------------------------------------------------------------------------
    These numbers reflect our experience at Siemens, as well. Three-
quarters of our current 2,000 job openings in the U.S. require post-
secondary education in the STEM fields. Therefore, here are examples of 
how Siemens is addressing the training gap.
Scaling up apprenticeships
    When Siemens first expanded its advanced manufacturing facility, 
the Charlotte Energy Hub, in Charlotte, North Carolina, the company had 
a hard time finding people with the right skill sets to fill new 
positions. This is when Siemens turned to its German roots--
specifically, the German-style apprenticeship model--as a guide to 
creating public, academic and corporate partnerships to train workers.
    In North Carolina, Siemens partnered with Central Piedmont 
Community College on its four-year apprenticeship program. Students 
attend classes at Central Piedmont Community College while getting paid 
for hands on, on-the-job training. They will graduate with an 
associate's degree in Computer Integrated Machining or Mechatronics, 
will receive a Journeyman certificate from the state of North Carolina, 
which is reciprocated by all 50 states and recognized by the U.S. 
Department of Labor, and, in the end, a career at Siemens. In other 
words, they get an international industry certification, a degree, an 
apprenticeship completion certificate, and no debt. They also get to 
enter into the workforce with a starting salary of around $55,000 a 
year with a guaranteed job at Siemens upon completion of their 
apprenticeship.
    Based on the success of the apprenticeship model in Charlotte, 
Siemens is creating similar programs around the country.
    In Alpharetta, Georgia, the Siemens Testing Technician 
Apprenticeship began in January 2015. The academic partner for this 
program is Lanier Tech Community College. Plans are underway to start a 
new Siemens Apprenticeship Program focusing on Manufacturing 
Engineering & Quality, expected to launch in 2018.
    In Sacramento, California, the Robotic Welding Apprenticeship began 
in September 2015. Siemens, the Sacramento Employment & Training Agency 
(SETA), and Los Rios Community College, have partnered to offer a 
Welding Boot Camp to up-skill the local Sacramento population and 
veterans, providing the necessary skills required to apply for a job as 
a welder. Siemens also partnered with Los Rios Community College for 
the American Apprenticeship Initiative, a multimillion dollar Federal 
grant from the U.S. Department of Labor, which the college received to 
work through public and private partnerships to expand registered 
apprenticeships in the U.S.
    We are now expanding the program in Fort Payne, Alabama, where 
Siemens recently began an apprenticeship program for machinists at its 
electrical component manufacturing plant.
    Siemens also serves as an Apprenticeship USA LEADER, and is working 
with the U.S. Department of Labor to expand apprenticeship programs 
through revamped recruitment strategies and the registration of 
additional programs.
    Additionally, Siemens worked with Alcoa and Dow to develop a 
playbook for other manufacturing employers seeking to build 
apprenticeship programs.iv We wanted to share our best 
practices in order to encourage other companies to join us in this 
mission and make it easier for them to launch similar programs.
---------------------------------------------------------------------------
    \iv\ The Playbook is available in the appendix. LINK TO PLAYBOOK--
http://www.themanu
facturinginstitute.org//media/53456D700856463091B62D1A3DA262F4/
Full_Apprenticeship_
Playbook.pdf
---------------------------------------------------------------------------
Hands-on software training
    Industry can help educators understand the skill sets needed to 
operate their technology to ensure that classroom experiences are 
relevant, but we have taken it a step further. Siemens is committed to 
helping students' gain vital hands-on learning with real-world tools 
and equipment while students are still attending educational 
institutions.
    Siemens is doing this today through Siemens PLM Software's Global 
Opportunities in PLM program, which we call GO PLM. In just the past 
few years, GO PLM has provided over $3 billion of in-kind software 
grants. As a result, students have access to the same PLM software used 
by more than 140,000 companies throughout the global manufacturing 
industry to design, develop and manufacture some of the world's most 
sophisticated products in a variety of industries, including aerospace, 
automotive, medical devices, machinery, shipbuilding and high-tech 
electronics. GO PLM provides technology to more than one million 
students annually at more than 12,000 global institutions. It is used 
at every academic level, from grade schools to graduate engineering 
research programs.
    Additionally, through the Siemens Cooperates with Education 
initiative (SCE), community colleges are offering leading-edge 
industrial technologies in their classrooms, research projects and 
workforce development programs. SCE provides support through donating 
equipment, granting software, and providing instructor training and 
technical guidance. Hundreds of colleges and universities are actively 
participating and have Siemens technologies deployed in their 
classrooms.
    Siemens is also expanding knowledge and capability in mechatronic 
training in colleges and high schools throughout the U.S. and around 
the globe. Through the Siemens Mechatronic System Certification 
Program, operated out of Siemens AG's Digital Factory operations, 
Siemens offers a tested, pre-packaged program to schools who want to 
prepare their students for the advanced manufacturing jobs of the 21st 
century. We've partnered with more than a dozen community colleges in 
the U.S.
The STEM Middle-Skills Initiative
    What many Americans traditionally think of as blue-collar jobs now 
go by different names--technical or middle-skills. While many STEM jobs 
require a bachelor's degree, a large percentage of these positions, 
half by some counts, are obtainable by earning an associate's degree, 
completing an apprenticeship program or completing training programs at 
community colleges. This can be done inexpensively without adding to 
the $1.3 trillion in student debt now shared by 42 million Americans.
    In order to help advance opportunities for young adults in STEM 
middle-skill careers, the Siemens Foundation, which I chair, launched a 
workforce development program, the STEM Middle-Skill Initiative in 2015 
to leverage the experience and expertise of Siemens as an industry 
leader and pioneer in workforce development. The Initiative addresses 
three clear objectives--elevating the economic opportunity available in 
STEM technical careers in the national dialogue; rebranding the image 
of these jobs and educational pathways to one of prestige, and 
accelerating training models that work.
    To shine a light on exemplary young adults in STEM programs at top 
community colleges and promote the real story of opportunity available 
in STEM middle-skill careers, the Siemens Foundation created the 
Siemens Technical Scholars project in partnership with Aspen's College 
Excellence Program. The Siemens Foundation is also a proud supporter of 
the Aspen Prize for Community College Excellence, a recognition won 
this year by Lake Area Technical Institute in the Chairman's home state 
of South Dakota.
    The Siemens Foundation is also working with the National Governors 
Association's Center for Best Practices on scaling work-based learning 
in states to expand the use of effective training models for young 
adults in STEM fields. Through this partnership, Siemens and the NGA 
are working with Indiana, Iowa, Montana, New Hampshire, Utah and 
Washington to make effective work-based learning models for STEM an 
integrated part of their education and training systems. To support 
development, implementation, and assessment of the project plan, each 
state received a grant of $100,000 and intensive technical assistance, 
including participation in national meetings and a cross-state peer 
learning network, and access to national experts, regular coaching 
calls and site visits.
    The Siemens Foundation also partnered with NGA and the U.S. 
Department of Labor in the American Apprenticeship Initiative in order 
to scale registered apprenticeships, and the public--private 
partnerships that support them. We see strong ecosystems for 
apprenticeships in countries like Germany and Switzerland, and the 
Foundation is working with its partners to build and strengthen similar 
ecosystems here in the U.S.
    Recently, the Siemens Foundation, the JP Morgan Chase Foundation, 
and NGA hosted a six-day trip to Switzerland and Germany for three 
governors--Governors Daugaard (SD), Fallin (OK), and Bevin (KY)--joined 
by top state policy, education and business leaders to experience the 
apprenticeship and career and technical education system first hand. 
This is another initiative that will serve as a catalyst for new 
workforce development initiatives in their home states.
    In another project to help rebrand the image of STEM middle-skill 
career opportunities, the Foundation partnered with Advance CTE, a 
leading career and technical education organization, to help states 
utilize proven messaging to attract more high school students, and 
their parents, to STEM career and technical education (CTE) pathways. 
Four states--Indiana, Maryland, New Jersey, and Washington--will pilot 
strategies this year and help us identify best practices for the rest 
of the country.
Conclusion
    In conclusion, I hope I have made clear that Siemens is committed 
to proactively cultivating talent in our largest, most important 
market--the U.S. In fact, recently Siemens announced additional 
commitments to building the U.S. workforce in three critical areas:

   Doubling Siemens' industry-leading apprenticeship program;

   Hiring at least 300 new veterans per year for the next three 
        years up to at least an additional 1,000;

   And by providing an additional $2 billion worth of in-kind 
        grants of our industrial software package to academic and 
        training institutions.

    We are eager to continue to work with public and private partners 
across government, economic development organizations, schools and 
others to continue building a 21st century workforce and enhancing 
opportunities in America.

    The Chairman. Thank you, Ms. Marks.
    Thank you all. Great testimony. I want to ask some 
questions and give members of the Committee a chance to ask 
some questions.
    Mr. Ratzenberger, I'm well aware of the work that you have 
done for some time in trying to impress upon Americans today 
the importance of teaching hands-on skills at an early age, and 
I know that for many of us up here--probably from an earlier 
generation, when I was in high school, shop and industrial arts 
were a required course. We had to take a mower apart and put it 
back together and learn other things like that, and today, I 
don't think those courses are even options for a lot of people.
    So tell me why you think it's important that we expose 
young people today, children at an early age, to that kind of 
hands-on learning.
    Mr. Ratzenberger. As we know, the brain is formed between 
the ages of zero and 5 years old, and throughout history, all 
the great tinkerers that have moved mankind forward, from Da 
Vinci, Thomas Edison, Gutenberg, Steve Jobs, Benjamin 
Franklin--they all tinkered as children. They didn't go to 
school--Thomas Edison didn't go to school and say, ``I'm going 
to learn how to make a light bulb.'' He, in fact, only had 3 
months of formal education. Most of his time was hanging around 
a shipyard in Lake Erie learning how to tinker, learning how to 
form things, shape things, fix things, invent things. Same 
thing with Steve Jobs. I actually had this conversation before 
he passed away, and he liked working on cars with his dad.
    So the more interested you get people into using their 
hands--Leonardo Da Vinci was an illegitimate child, who was 
ignored throughout his childhood. He hung around a farm. That's 
where he became Leonardo Da Vinci. So by the time they get to 
be 18 years old and graduate from wherever they're graduating 
from, if they don't have the seed planted in them of using 
their hands and shaping and forming things--and we can also 
eliminate those trophies, the high self-esteem trophies that 
we're so fond of giving out.
    High self-esteem comes from making things. You make 
something from scratch. You draw it, you shape it, you build 
it. That's self-esteem, because you can look at it 30 years 
later--I always do when I show my kids who are grown now--and 
since they were little, I'd point out a roof of a building that 
I'd put up during one particularly gruesome New England winter, 
and every time we'd drive by, I'd say, ``Yes, I put the roof on 
that.'' And when they were younger, they'd say, ``Oh, gee, Dad, 
that's great, that's great.'' Well, once they got older, they 
went, ``Yes, we know. You put the roof on.''
    But, still, it's something you can point at. It's self-
esteem, and that's where it comes from. It never comes from 
handing out a trophy for coming in 11th. You have to put your 
hand to something useful, and that's what brought us to the 
dance. So dance with the one who brought you, and it wasn't 
theory that brought us here. It's somebody who knew how to use 
tools.
    The Chairman. Thank you.
    Colonel Cartney, you spoke about the fact that technology 
is a force multiplier, which does not decrease the number of 
people that are needed, but instead enables people to do more. 
Could you discuss in a bit more detail the impact that new 
technology is having on the skills gap and how Lake Area Tech 
is working to ensure that its students are prepared for this 
workplace environment?
    Colonel Cartney. Yes, sir. In almost any field that you 
look at, technology is having a great impact. But even if you 
look at, for example, manufacturing, when they put a robot in 
the line, typically, that robot isn't put in the line to make 
the same number of items they've made previously when a person 
was there. It's put in line because it does it more effectively 
and does it faster and with higher quality. But as soon as you 
replace that person on the line with a robot, now you need 
somebody that can maintain the robot, that can program the 
robot, and, in addition, back in another plant, has to build 
that robot.
    So there has been concerns that we're going to technology--
and, technology is going to allow us to do more with less, and 
my response to that is always; you never do more with less, but 
you do more with something different, and that's what 
technology is doing. But it's not reducing the number of 
workers that we need. It's changing the types of workers that 
we need.
    The Chairman. You sort of got at this--and a number of you 
did--that the whole notion that kids nowadays come up with this 
idea that they have to have a four-year degree, and sometimes 
there's a stigma attached to not doing that. How do you deal in 
student recruitment for Lake Area Tech, for example, with that? 
It seems to me at least one of the big bubbles we're going to 
face in the future is a student loan debt bubble, because more 
and more kids today are taking on so much debt, and it's going 
to be very, very hard and take a really long time to pay it 
back.
    So is there an argument to be made, not only that there are 
really good-paying jobs out there--and your placement rate, as 
I pointed out earlier, is 99 percent, which is really 
remarkable--but also an argument to be made that you can get 
good jobs in the economy that pay higher than average wages and 
also come out without a huge amount of student debt that you 
might otherwise have if you went to a four-year institution. 
How do you deal with that perception out there, that people 
think--at least, some people think that they need to have that 
four-year degree?
    Colonel Cartney. Yes, sir. Well, in fact, we have a great 
group of recruiters, first and foremost. They get into the high 
schools. They even get into the middle schools and talk to the 
students, and talk to the parents. But some of the big things 
that people need to realize is when you talk about the 
averages, and you look at what you're going to make with a 
four-year degree, say as a business major, and then you look at 
what the average welder makes, there probably will be a slight 
edge for the person getting the business degree.
    The problem is if your natural skills are to be a welder, 
you're going to be a great welder, and you're going to have an 
income that's extremely high, where maybe you'd be a mediocre 
business person, and you would be on the lower end of that 
scale. So a lot of times, people need to understand that they 
need to really look at what it is they want to do in life, and 
where their skills are at, before they decide that pathway. 
That's why we focus on placement rather than graduation. When 
our students are coming in, we talk about what do you want to 
be, not what degree do you want, because for a high school 
student, that's rather abstract for them.
    So we combat it in a number of ways. The biggest thing that 
we're now working on is we need assistance from industry, 
because a lot of perception is that the jobs that people are 
preparing for--they have an image of what those industries were 
30 or 40 years ago. So now with the new workplaces we need to 
re-image these occupations, because the manufacturing 
environment isn't what it was 30 years ago.
    The Chairman. Senator Nelson?
    Senator Nelson. Thanks, Mr. Chairman.
    Mr. Ratzenberger, I certainly agree with you. For a kid 
putting together something, there's a real sense of 
accomplishment.
    Colonel Cartney, tell us what you think government should 
do to help get more students into these fields?
    Colonel Cartney. The biggest thing is what we're doing 
today is an outstanding start in having people come forward and 
talk about it. We found out that with Build Dakota, for 
example; where, with industry, the state put up funds for 
students to have full ride scholarships; what we found was the 
conversations that that evolved as we were out talking about 
Build Dakota and the great jobs that were out there; we've seen 
an impact on Lake Area Tech and our enrollment that outweighs 
the number of scholarships that we award.
    So first and foremost is looking for ways to be a catalyst 
for workforce development and a catalyst for the conversation. 
That's probably the biggest things that I think the government 
could do, along with some grant dollars. And also the Centers 
of Excellence that I mentioned.
    Senator Nelson. Ms. Marks, we are now seeing the solar 
energy workforce increase by 25 percent and wind increase by 32 
percent. For the first time, these jobs have surpassed some of 
the traditional fossil fuel jobs. How has this market changed 
or impacted your business strategy, and what investments is 
Siemens making to prepare this workforce for these new jobs?
    Ms. Marks. Well, thank you, Senator, for asking. We are 
seeing a shift in the energy view and the energy independence 
here in this country. But we think it's a mixed view in terms 
of renewables versus some of our other offerings, if you will. 
What we are doing to prepare is we've taken the model on that 
was developed over the last 100 years in Germany, the 
apprenticeship model.
    In 2010, we expanded our factory in Charlotte, North 
Carolina, and we needed 800 new employees. We actually closed 
the facility in Canada and expanded here. We call it our 
Charlotte energy hub, where we build gas turbines and 
generators. And as most of you know, North Carolina was more of 
a textile-driven state, and we needed technicians who had 
mechatronics, mechanical aptitude, electronics aptitude.
    So we worked together with Central Piedmont Community 
College, because we do believe apprenticeships are local. We 
helped with the curriculum. We brought over programs from 
Germany, and we're proud to say our apprentice program, which 
we've now replicated in three other states, offers to these 
students the ability, as they leave high school or come back in 
the workforce--the ability to work for us in a 4-year program, 
get paid--we pay for their academic institution so they 
graduate from the program with no debt, a guaranteed job, and a 
journeyman's certification from North Carolina, which has the 
ability to be used in any state from a reciprocity. So for us, 
it's a business imperative to develop skills, and we're taking 
it on with our apprenticeship model.
    Senator Nelson. Mr. Neely, it's impressive that 30 percent 
of your workforce at Gulfstream, the old Grumman Corporation, 
is veterans. We already talked about trying to ease the 
certificate problem. What more can the Federal Government do to 
let those special skills of military personnel, once they get 
into the private sector, to be utilized?
    Mr. Neely. Well, this is part of the good news story, quite 
frankly. The easing of the certification transfer burden--a lot 
of progress on that. The Department of Defense has quite a 
number of excellent transition programs, for example, programs 
serving veterans in the last 180 days of their service that 
engage in transition services so that--transition training so 
that they are able to come right out of their active duty 
service and right into a business, and we very much encourage 
those kinds of programs.
    It's a bit of a theme, I think, from the comments Ms. Marks 
made about apprenticeships, that whether it's in a military 
context or other context, where you can have some transition 
period where you're blending that transfer of training and 
transfer of culture, whether it's military or out of other 
environments. That's important, and to the extent that programs 
within DOD or elsewhere can help facilitate that--I think there 
are opportunities that are already being realized, by the way, 
to blend that kind of activity between the armed forces and the 
technical college networks that are around the state. Those are 
good examples.
    Senator Nelson. You know some of the problems veterans have 
when they get out on their own. Is your company specifically 
trying to meet some of those problems, for example, on PTSD, 
trying to spot it and get the veteran help?
    Mr. Neely. We are. Yes, sir.
    Senator Nelson. What do you do?
    Mr. Neely. Well, I think a core and obvious fact is that we 
have such a large percentage of employees that are, indeed, 
veterans. There's a natural network. They look after each 
other, and they know how to spot--of course, our H.R. people 
are very attuned to that, particularly the ones that are 
entering most recently, having done tours in Iraq and 
Afghanistan, et cetera. So it's an awareness. It's a connection 
between our resources that I just described and the local 
facilities as part of the military operations and other local 
hospitals, treatment centers, et cetera.
    Senator Nelson. Thank you.
    The Chairman. Thank you, Senator Nelson.
    Senator Baldwin is up next.

               STATEMENT OF HON. TAMMY BALDWIN, 
                  U.S. SENATOR FROM WISCONSIN

    Senator Baldwin. Thank you, Mr. Chairman.
    What a great panel. This is really a wonderful opportunity 
to hear from you. I represent a state, Wisconsin, which is 
still one of the lead manufacturing states as a percent of our 
workforce, close to 20 percent, and like you, Mr. Ratzenberger, 
I get a chance to visit a lot of those manufacturing sites. I 
know that's something you featured on your TV show, ``Made in 
America.''
    I want to get feedback on a number of the issues that you 
have brought up during this panel, and I wanted to start with 
this image issue. I think about--I appreciate the fact that you 
shared your story of growing up and where you learned to 
tinker, et cetera. All my hobbies are hobbies that--you know, 
whether it's carpentry or sewing or whatever--where I get to be 
hands-on and see the outcome of my endeavor quickly, unlike the 
day job as a Senator, where sometimes the products of your 
labor take a little bit longer.
    But I'm working right now on a legislative proposal to 
establish a grant program to help launch and scale registered 
apprenticeships in targeted industries, like advanced 
manufacturing, construction, energy, and more, and I hope I can 
create a program that breaks through the stigma that employers 
may encounter when recruiting workers to manufacturing. As the 
co-founder of the Nuts, Bolts, and Thingamajigs Foundation to 
help individuals discover their passion for making things, I 
would like to ask you what you think we can do to structure our 
apprenticeship programs to create a new image of manufacturing 
and certainly to create incentives for young people to choose 
careers that involve making things with their hands.
    Mr. Ratzenberger. Thank you for that question, because it's 
something I've put a lot of thought into, especially, you know, 
coming from the Hollywood--the media, and that has a big 
effect, because since the 1960s, anybody who worked with their 
hands was denigrated on film or television. They were made to 
look stupid. So why would a child growing up watching those 
images want to be that?
    We all know how powerful that the images coming out of 
Hollywood are. Whether it's a big feature film or a sitcom or a 
Saturday morning cartoon show, they insist on denigrating 
anybody that works with their hands--the plumber, the 
carpenter, the bricklayer. And to turn it all around simply, if 
I could get Taylor Swift to sing a song that she likes guys 
that know how to use tools--done. We'd have no problem.
    [Laughter.]
    Mr. Ratzenberger. Every kid out there would be rushing to 
Home Depot and tooling up and learning how to use them, because 
that's really where it comes from. It comes from the media. 
Before that, before the 1960s, you were honored if you knew how 
to do something, if you actually knew how to function. That's 
really self-esteem, as I was saying before. But I think that's 
where much of it comes from, is Hollywood's image.
    Senator Baldwin. So really focusing on the branding is 
going to be a huge piece of this.
    Mr. Ratzenberger. I think so, especially where the parents 
are concerned. I was on a radio show, and I got a call from a 
lady whose husband was a stone mason, and she had six kids, and 
the eldest one wanted to be a stone mason like his dad, and she 
was worried. And I said, ``Well, what are you worried about? 
The kid obviously loves his father and wants to follow in his 
footsteps.'' She said, ``Well, I don't want the neighbors to 
think my son is stupid.'' I wanted to crawl into that 
microphone and just--you know.
    But that's the problem. To say, ``Wait a minute. My son is 
a plumber,'' that doesn't mean he's stupid. I mean, I know a 
plumber who owns four apartment buildings. He probably paid for 
them in cash. But, specifically, you have to know--again, if 
you teach children how to use tools and form things, whether 
it's wood or metal, not only are they learning how to make 
things and getting real self-esteem, but they're learning the 
fundamentals of algebra, fractions, equations, geometry. That's 
what has to be used--a 90-degree angle, a 45-degree angle. But 
that's the basis of all construction, and they're learning that 
before they know what they're learning. So when they get into 
high school, and the teacher draws something on the board--
well, they understand what that means.
    So there's a lot of work to be done, and I'll be around for 
a few more years, so just let me know what you need.
    Senator Baldwin. Excellent. Thank you.
    The Chairman. Thank you, Senator Baldwin.
    Senator Capito?

            STATEMENT OF HON. SHELLEY MOORE CAPITO, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Capito. Thank you, Mr. Chairman.
    Thank all of you. I agree with Senator Baldwin. This has 
been an excellent hearing.
    Just by way of introduction, I represent a state, West 
Virginia, that has a lot of great and highly skilled workers in 
our state. Some of them are not working. I want to get--that's 
my second question.
    My first comment would be we're talking a lot about the 
impetus of people who are feeling that they need to tell their 
kids they have to get a four-year degree. There's still a vast 
amount of people in this country who feel that even reaching a 
two-year degree is too high a stretch for them, and that's why 
I think programs such as Ms. Marks talked about at Siemens and 
also the one that we have--we have one in West Virginia with 
Bridge Valley Community and Technical College with Toyota--
gives those folks the opportunity that are getting out of high 
school, and they can't afford to go to college, they don't 
think they can go to college. It's a stretch for them. Nobody 
in their family ever went to college.
    But by combining the ability to be paid while they're being 
trained and then, hopefully, have a job at the end of those 2 
years or--usually, it's a 2-year program--I think is really a 
good way to catch their eye and realize that this is not too 
big a stretch. So there are folks on the other end of the 
spectrum who think this is too tough a leap for us.
    So I would like to say, also, I've seen a couple of things 
in the elementary school that I think are going to be very 
helpful to tinkering and getting people interested, and that's 
these robotics programs that you're seeing in second, third, 
and fourth grade, where they're realizing that they can build 
things, they can make them move, and the excitement that you 
see on the faces in the elementary schools. I think they're 
really good.
    I'm curious to know if any of your private companies are 
involved in any kind of the robotics programs in the elementary 
school. Does anybody have a comment on that?
    Mr. Ratzenberger. Yes. There's a company out of Pittsburg, 
Kansas, called Pitsco, and they supply most of the STEM 
equipment nationwide. I think they're also the lead distributor 
for Lego. But you can Google that, Pitsco, P-i-t-s-c-o.
    Senator Capito. Good. Yes. Ms. Marks?
    Ms. Marks. Thank you, Senator. Yes, we are involved in that 
as an advanced manufacturing company. What we find is that so 
much of this is local, and our employees feel so committed to 
the communities in which they live that that's where they 
actually become the coaches. We do the Siemens Science Days, K 
through 12, but it is important that these skills and the 
awareness happens very young.
    Senator Capito. Mr. Neely, in terms of aerospace, we have 
had a downturn in our coal industry, and we have a lot of out 
of work coal miners who have magnificent skills. We've been 
working to try to identify where the retraining opportunities 
are for them in and around their area. They don't want to move 
to California. They want to stay in West Virginia, Kentucky, 
Ohio, where their families are. But they have great value here.
    I believe that a retrained coal miner can really move into 
the aerospace industry quite seamlessly. Do you have any--you 
know, with their metalworking and welding skills and all those 
kinds of talents.
    Mr. Neely. Senator, I couldn't agree more. At the end of 
the day, the point which my fellow speakers have made is that 
understanding of how to use your hands and how to use your 
brain along with your hands and apply those together. And 
whether you're in a coal mine--and I confess I've never been in 
a coal mine--but whether you're in a coal mine or you're 
maintaining the equipment in a coal mine--and from what I know, 
there's a lot of very sophisticated equipment in there--all 
those skills are excellent foundations for what it would take 
to come in and build airplanes at Gulfstream.
    Senator Capito. Well, I'd like to have a further 
conversation with you kind of off the grid here to talk about 
how we can work with rebuilding, and I think that comes within 
your industrial reskilling kind of terminology.
    The other thing I was thinking--you know, if we're talking 
about how do you get younger people to think manufacturing is 
cool, I was sort of over here thinking maybe we don't call it 
manufacturing anymore. Obviously, advanced manufacturing is a 
terminology to try to make it sound a little better. I don't--
maybe we could get Taylor Swift to come up with some kind of 
song title on that. That's just sort of something I was 
thinking.
    I got to meet some of the original women advanced 
manufacturers the other day when Rosie the Riveters came in to 
see me. They're now in their 90s--amazing work they did in the 
service of our country with the skills they never thought they 
had. They probably--in West Virginia, they all went to Akron, 
Ohio, and filled the factories and built most of our 
aerospace--our weapons, but our airplanes as well.
    So I would like to put a pitch in to this generation of 
women. The President just signed the Inspire Women Act and 
Promoting Women in Entrepreneurship. We've got to get whatever 
we are, the 15 to 20 percent that is into the STEM fields--we 
need to increase that, because that's where I think the 
viability and the ability to raise your families is. For women, 
I think, it's a skill you can go in and out of the workforce if 
you need to do that. So any way we can join together on that--I 
know, Ms. Marks, you've been working on that as well. So thank 
you all very much.
    The Chairman. Thank you, Senator Capito. That was a great 
generation. My mom was a Weapons Inspector during that period.
    But in South Dakota, we have a really low unemployment 
rate, and when we can't get people to fill the jobs, if Colonel 
Cartney and the other Tech Ed schools aren't producing enough 
employees to fill some of those jobs, we recruit hard from our 
neighbor in Minnesota, so we're trying to bring their folks to 
South Dakota.
    Senator Klobuchar. Oh, here we go.
    The Chairman. So, Senator Klobuchar?

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you very much, Senator Thune, and 
I first want to welcome my friends from the Minnesota Workforce 
Council Association. They're there in the back. Look at them 
waving. They've been taking photos of Senator Thune. You're a 
star now--very exciting.
    They're here because just like in South Dakota, as the 
Chairman mentioned, we have very low unemployment in Minnesota, 
something like 3 percent to 3.5 percent, yet we have a lot of 
manufacturing, and especially in greater Minnesota. Our friends 
from Detroit Lakes are here. It's hard to get people to fill 
the jobs.
    I so appreciate, Mr. Ratzenberger, your work and your show 
and the fact that you have featured--ready--Red Wing Boots from 
Minnesota, the Diamond Match Company from Cloquet, snow blowers 
from Toro in Windom, Scotch Tape from 3M, and, of course, 
Hormel's Spam, where they actually have a museum which is 
called the Spam Museum, or as we like to call it, the 
Guggenham. So thank you for featuring our businesses.
    Now, one of the things I noticed is it's Senator Thune and 
several women senators up here, and I wanted to ask you, Mr. 
DeJohn, first of all, what is Turner's Youth Force 2020 program 
doing to support women in these traditional jobs? As you know, 
women--one of the ways we can fill these jobs--25 percent of 
STEM workers--less than 25 percent women, and my colleagues 
have asked about the dirty, dark, and dangerous issue of the 
images people have for manufacturing from the past which aren't 
really real now. Could you address that?
    Mr. DeJohn. That's a very good question, Senator, and thank 
you for the opportunity. Turner is a company that has probably 
one of the most aggressive diversity programs of any of our 
competitors that I know of. We work very closely through 2020, 
but we also had the 50th anniversary of our minorities firm 
commitment just last year. Hilton Smith, who had started that, 
just retired last year, and that's continuing.
    As we recruit for the positions of a professional engineer 
or architect or construction manager, our focus as a company is 
on a minimum requirement that we've posted upon ourselves for 
minorities and women of 35 percent, and almost every year, 
we've been able to exceed that. We typically bring in 400 
recruits a year, and, recently, we've surpassed the 50 percent 
mark on women and minorities.
    Senator Klobuchar. Very good. Thank you. Thank you very 
much. That's impressive.
    The other piece of this is apprenticeships. Senator Collins 
and I have introduced the American Apprenticeship Act to 
provide funding to states to create or expand their tuition 
assistance programs.
    Mr. Neely, do you want to briefly--because I have one more 
question for Ms. Marks--address that with your experience with 
the youth apprenticeship program at Gulfstream? I just think 
it's a key to a lot of our issues to be able to have our 
students work in businesses and their parents see what those 
businesses are like.
    Mr. Neely. Senator, I think you're spot-on, because it 
addresses a number of the problems that we've been talking 
about all morning, and that is awareness. It lets the kids come 
in and see firsthand what the opportunities are like, to come 
in and see firsthand that advanced manufacturing is not dirty, 
dark, and dangerous. It's quite the opposite. It's very 
sophisticated and exciting, and it lets the parents be part of 
that.
    And at the same time, addressing some of the earlier 
comments about the kids who maybe aren't convinced that they're 
capable of reaching that far, when you bring them in in high 
school in the way our high school apprenticeship program 
works--and I know it's consistent with many other companies, 
that we partner with the local high schools, take advantage of 
available government programs, so the kids are working with us 
15 to 25 hours a week as part of their course work. So they are 
simultaneously earning high school credits; they're earning 
cash, $10 an hour from us, so they see the connection; and they 
get exposed to not just their particular area, but the other 
parts of the company that's part of the program so they can see 
for themselves. I think that's a wonderful tool.
    Senator Klobuchar. Thank you very much, and I just think we 
need to do everything we can on the state and Federal levels 
with our laws to make it easier, and that's something that's 
more complicated than people think.
    Ms. Marks, last, I'm half Swiss, actually, and in the last 
few years, our Commerce Department signed a Memorandum of 
Understanding with Switzerland under the leadership of 
Secretary Pritzker to look at what those apprenticeship 
programs are like in Switzerland. Buhler, based in Minnesota, 
has actually decided to launch a Swiss style apprenticeship 
academy, a 3-year, paid-for program. They take classes at our 
Dunwoody College of Technology.
    Siemens also has employees in our state. I want to thank 
you for that. You use a similar apprenticeship model. Could you 
talk about how this has helped with employee retention?
    Ms. Marks. Yes. Thank you for the question. It has been a 
great employee retention tool for our apprentices and for the 
people they're paired with who are teaching them real-time on 
the job. You know, we're all challenged by the workforce 
shifting over time. But what we find is both the apprentices 
and the people who are training them real-time are both really 
appreciating this and getting something out of this.
    The apprentice demand that we're seeing--and this is in 
California, in Georgia, and newly in Alabama, as well as in 
North Carolina--is incredible once the word gets out. Recently, 
for our Charlotte facility, the high schools that we were 
recruiting at--270 students turned out.
    Chad Robinson, one of our apprentices that I've gotten to 
know, who's in the middle of our program right now--top ten in 
his high school--got accepted to a 4-year mechanical 
engineering school and decided to become an apprentice at 
Siemens because he'd be debt-free, get an associate's degree, 
get paid for the job while he was doing this, and then 
potentially follow on if he wanted to. Siemens would even pay 
for his Bachelor's or even Master's if he wanted to continue on 
as an employee.
    So it has been a great experience, and these people--they 
speak for us, and we're happy to share.
    Senator Klobuchar. Well, thank you. And, by the way, having 
a woman CEO is a great way to get women into this business as 
well. So thank you so much for what you do.
    Thanks.
    The Chairman. Thank you, Senator Klobuchar.
    Senator Cortez Masto is up next.

           STATEMENT OF HON. CATHERINE CORTEZ MASTO, 
                    U.S. SENATOR FROM NEVADA

    Senator Cortez Masto. Thank you, Mr. Chair. This is a 
fantastic panel on an important topic, I think we can all 
agree.
    I am from the great state of Nevada and have been visited 
by our career and technical education programs, our workforce 
development groups, the community colleges, and so many 
incredible people here in Washington who are concerned about 
not only funding for their programs but continuing the programs 
for the very reasons that we're talking about today, the skills 
gap that we see.
    A couple of things I want to follow up on that Senator 
Klobuchar started with. I'm all about tearing down barriers. I 
think we absolutely need to address this issue of skills gap 
and do whatever we can to prepare the workforce for the future. 
But there are barriers, and you are talking about some of them 
today, whether funding barriers, the gender and wage gap 
barrier that I want to touch on, the negative branding barriers 
that we see, also recruitment of teachers and educators, and 
lack of education among counselors and parents to really focus 
kids who might be more attuned to going into this field--the 
skilled field--during their time in school.
    But let me start with the gender and wage gap barrier. That 
is a concern of mine, and according to our Census Bureau, women 
make up 40 percent of the workforce, but only 24 percent of 
STEM workers. And the U.S. Department of Commerce and Economics 
and Statistics Administration reported that, on average, women 
earned 14 percent less than men, even when controlling for a 
wide set of characteristics, such as education and age.
    I'm curious--for Mr. DeJohn, Mr. Neely, and Ms. Marks--how 
you are addressing the issue of both the gender and wage gap 
with your companies?
    Ms. Marks. So we are looking for the most qualified workers 
everywhere in this country and employing them, which includes 
women and minorities, and we do not have a wage gap at Siemens 
in the U.S. to share with you. I will tell you we have a 
program that is trying to address this, the stigma part of this 
as well.
    We founded a program with the Aspen Institute called the 
Siemens Technical Scholars, where we have now found 80 students 
and given them between $3,500 and $10,000 scholarships, of 
which many are women and minorities, who are pursuing STEM 
programs in two-year institutions and community colleges. But 
one of the important parts of their scholarship is that they 
spread the word, and they evangelize the importance of their 
jobs and these careers, be it in welding, mechatronics, any of 
the STEM fields where we need support to grow our business.
    Senator Cortez Masto. Thank you.
    Mr. Neely. From a Gulfstream standpoint, somewhat similar. 
We certainly have a very active diversity outreach. But, quite 
frankly, one of the most effective tools to particularly 
attract women and minorities to these technical trades is the 
mentors and the role models they see that are already in the 
company. We're blessed to have people throughout the company in 
all roles that can serve as those role models, and that ties--I 
know I'm a bit repetitive in referring back to how important it 
is to get the elementary and high school and middle school kids 
in.
    But when we can get those students in front of those role 
models that look like them and have the same overall 
perspective, that's the most powerful tool--that, you know 
what, you are absolutely qualified for these jobs, and it's a 
rewarding career. It works.
    Senator Cortez Masto. Thank you.
    Mr. DeJohn. I don't believe that within Turner, there is a 
gap within the salary range for men or women. I think we're 
very conscientious about that. And, as Mr. Neely just said, one 
of the things that we try to do is--not only do we recruit 
college graduates every year, but every year, we bring in 
hundreds of--I'll use the word, apprentices--to work and be 
paid during the summer.
    And the reason I wanted to say I would use the word, 
apprentice--if I've noticed anything about the conversation 
today, we as a group have made a huge distinction of: you're an 
apprentice, and you can get a degree, and then you can get 
another degree. Well, an apprenticeship is a 4-year degree, and 
part of our problem as a group is it sounds as though we're 
demeaning it, and it shouldn't be demeaned.
    If I walk a job site, and I see a gentleman who has spent 
seven, six, five years as an apprenticeship plumber and see 
what he's doing and know that he made a fraction of his salary 
for the first 4 years--he's earned it, and if we can, as a 
group, change the way we discuss people learning trades, you 
know, the vocational term, it's--there are demeaning things out 
there. So that's why I wanted to say that.
    Senator Cortez Masto. And thank you for bringing that up, 
because I think one area that we don't focus enough on--again 
sometimes a branding issue--is organized labor. Our carpenters' 
union, as you well know, has some of the best apprenticeship 
programs. Our organized labor in the state of Nevada have 
apprenticeship programs that provide that degree or 
certificate, that work with the private sector, and they are 
phenomenal, and we don't do enough to boost them and support 
what they're doing in their training and skills as well in 
their trade.
    So thank you for those comments. I appreciate all of you 
here today. It's an important topic.
    The Chairman. Thank you, Senator Cortez Masto.
    I had Senator Inhofe, but Senator Markey has returned, so 
it'll be Senator Markey and then Senator Inhofe.

               STATEMENT OF HON. EDWARD MARKEY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Markey. Thank you, Mr. Chairman, very much.
    Can we talk about community college for a second just to 
make sure that we kind of discuss this skills gap and what's 
going to be necessary in order to make it easier for the people 
who need these kinds of skills to get the education they need? 
Would one of you or all of you be willing to talk about the 
whole concept of community college for free so that people 
could know that that is accessible to them?
    Mr. Ratzenberger?
    Mr. Ratzenberger. Thank you. Once you get to community 
college, if you don't have the foundation of being fascinated 
by tools and building things, you're not going to do very well, 
if all of a sudden, here you are 18 years old or however the 
age is. But if you have the basics--don't forget, in former 
generations, before the invention of the video games and things 
that kept us indoors, it was anathema to our parents that we 
were inside on a sunny day, so they'd kick us out. They'd say, 
``Oh, get out of here. Go do something,'' and we were left to 
our own devices.
    So we climbed trees, we rode bicycles, and, oh, climbing a 
tree, you learned that you didn't put a ladder on a tree with 
finishing nails, because those steps would pop out when you 
step on them. So you had a problem. Now you had to solve the 
problem. Your bicycle chain breaks. You've got a problem. You 
have to solve the problem. So, really, what we all did in our 
childhoods before the current generation is solve problems. We 
didn't know that. We were playing.
    So now it's a whole different issue. If someone grows up 
and all they've done is play video games--and there's certainly 
an attraction to that, and parents think that, ``Oh, well, 
they're indoors and it'll keep them safe.'' Well, they're also 
not letting the child blossom, as it were, or to learn skills 
that's going to sustain the kid later on in life.
    Senator Markey. So let me just follow up on that. MassTLC--
that's the largest technology association up in Massachusetts, 
and what it does is it works with kids, K through 12, to help 
kids get the skill set that they need. So here's what it does. 
It, one, leads an hour of coding seminars, introducing students 
to the basics of coding software; and, second, it mentors 
students on entrepreneurship and community engagement by 
assisting teams of teenagers develop mobile apps that improve 
society.
    Two years ago, a team from Winchester High School developed 
an app that can detect whether someone is sober enough to 
safely drive, and that finished third in a global competition. 
What do you think about that as a model? Because so many kids, 
as you're saying, have this skill set. So many of the jobs are 
increasingly being created in that sector. What do you think 
about that as a model to ensure that in our schools and then 
outside the schools that we close the skills gap so that every 
kid has access to that digital skill set?
    Mr. Ratzenberger. The more programs we have that kids 
actually use their hands--it's the hand to mind. Actually, in 
1809, a book was written by a fellow named Charles Ham--that 
was the title of the book, Hand to Mind--on how important it is 
for children to use their hands, and whether it's computers or 
building a doghouse, it really doesn't make that much 
difference, I don't really think.
    But the important part to me, also, especially when you're 
talking about computers and electronics--someone has to 
generate the electricity. So you go back to the coal miner 
conversation. Don't forget that someone's got to fix the diesel 
engine of the equipment that goes into the coal mine. So it's 
all one big weave. It's all one big tapestry. But anything that 
helps, helps.
    Senator Markey. So in this Committee, you know, through our 
Chairman's leadership, what we do is we talk about disruptive 
technologies, autonomous vehicles, drones, augmented reality, 
as the society moves in a new direction in terms of where the 
jobs are going to be, and so many of them are going to require 
a digital skill set as well if they're going to be able to 
qualify for these jobs as they're moving forward.
    We need to do what you're saying, but because of the 
massive incursion of disruptive technologies and the nature of 
work changes, we need to make sure that we kind of have a 
complementary strategy that could work, and I'm hoping that 
maybe out of all the conversations that we're having--and we 
thank all of you for being here--that we might be able to 
accomplish that goal.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Markey.
    Senator Inhofe?

                 STATEMENT OF HON. JIM INHOFE, 
                   U.S. SENATOR FROM OKLAHOMA

    Senator Inhofe. Thank you, Mr. Chairman.
    I'm glad I had a chance to visit with all of you when I 
first came in to let you know one of the problems we have with 
these musical chairs--going back and forth between two 
committees--both of them very significant and, actually, 
dealing with a very similar issue that we're doing today. I 
think some of you here are very familiar with the skilled 
workforce that we have in Oklahoma from our past. It's the home 
of a lot of companies that do the work, including NORDAM and 
Spirit Aerosystems.
    In fact, Mr. Neely, I think they make the wing for your 
760. I'm not sure.
    But, nonetheless, they're very much involved. NORDAM and 
Spirit both work to ensure that we have skilled workers. I want 
to share with you a personal experience that I had. Many years 
ago, when I was in the state legislature, our Governor at that 
time was Dewey Bartlett. He and I--and I was in the State 
Senate--really kind of came up with the idea--we didn't have 
any technical schools in Oklahoma at that time--with the idea 
that a lot of parents were pushing their kids in one direction 
or another, completely forgetting about the fact that there's a 
lot of happiness and futures that can be made in technical 
training. So we actually started the very first tech school in 
the state of Oklahoma. So we go back to the beginning.
    So through a STEM initiative and nonprofit called the Tulsa 
Night Flight, NORDAM has engaged children, students, and 
teachers to inspire them to work in STEM and to seek out the 
technical education needed to build airplanes. Spirit has built 
a strong relationship with Tulsa Tech to develop their 
curriculum, and they are in constant communication with each 
other to make sure they get the right ones.
    So, Mr. Neely, as you develop relationships with technical 
colleges, what are some of the lessons learned? How did the 
faculty respond to your efforts?
    Mr. Neely. As I mentioned in my opening remarks, our 
workforce development strategy has evolved over time, and I 
think one of the key lessons learned as we've been through this 
process is that we should have earlier on done a lot better job 
of looking at the whole picture and not making the mistake we 
made of being a bit too siloed in looking at what manufacturing 
might need with a particular program within a technical college 
and what the aircraft maintenance side might have needed within 
either a different technical or a different area.
    We allowed ourselves to be a little bit too splintered on 
the Gulfstream side, and then on the side of the--using Georgia 
as an example--the Technical College System of Georgia, which 
is the network of technical schools--I think they would say the 
same thing, that they made the mistake of letting themselves 
get a little bit too fractured as well.
    However, as an improvement, what we've done to correct that 
is we stepped back both internally and with our colleagues at 
the Technical College System and the University System as well 
and said, ``You know what? We need a more comprehensive, cross-
functional approach.''
    So within Gulfstream, we formed a cross-functional team, of 
which I'm a part along with Human Resources and our 
manufacturing team and a number of others, including 
engineering, and identified the skill sets that we need both 
today and in the future, and then have worked collaboratively 
with the senior people at the Technical College System to 
understand--here are our needs today and tomorrow. What 
programs do you have currently, and then where we don't have 
programs that can address our needs, how can we work together 
and--and the working together part----
    Senator Inhofe. One of the problems, though, you have is 
how are you going to determine what your needs--they're going 
through an educational process. It might be a two-year program. 
So it has to be difficult to know what are your needs going to 
be 2 years from now. I mean, just one administration change can 
totally change that.
    Mr. Neely. You mean, in terms of technology or in terms of 
future employees?
    Senator Inhofe. Yes, in terms of what you are going to call 
upon for a trained worker 2 years from now. It would be 
difficult, I would think. My time is running out, and I want to 
get to Ms. Marks.
    You have kind of a special situation in that you are so 
diversified. You work across multiple sectors ranging from oil 
and gas to energy, and these sectors are often the first to 
embrace new technologies and have huge investments in working, 
training, and retraining programs, including for veterans.
    So how does a diverse company like yours, like Siemens, 
utilize on-the-job training, apprenticeships, to make sure that 
the knowledge is passed on from one group to another?
    Ms. Marks. Well, Senator, it's very important that the 
knowledge gets passed on, and we do it in a few ways. One is 
each of our apprentices is matched up with someone to do on-
the-job training, and they both take great care to do this, to 
mentor them, as well as to share the skill set, in addition. 
One thing we have done working very closely with four different 
community colleges, though, is put together a playbook so that 
everyone--and I'm happy to share this because it's been 
published----
    Senator Inhofe. Now, when you say that, are you talking 
about your experience in Oklahoma, too?
    Ms. Marks. Well, our experience in Oklahoma where we have 
our Wind Service Center, and we do on-the-job training. We 
don't have any apprentices there.
    Senator Inhofe. I see.
    Mr. Marks. But our apprentices are visible everywhere. They 
actually wear an apprentice badge, and it's actually on their 
work clothing, and they're proud of it, and that comes from the 
German model where it's actually viewed as value-add, and this 
is our next generation of the workforce. So we are trying to 
share lessons learned, and we're happy to share them with any 
company.
    Senator Inhofe. Well, thank you very much.
    The only regret I have, Mr. Chairman, is that my kids and 
grandkids are going to be so disappointed that I didn't have a 
question for Cliff.
    Thank you.
    [Laughter.]
    The Chairman. Thank you, Senator Inhofe.
    Senator Duckworth?

              STATEMENT OF HON. TAMMY DUCKWORTH, 
                   U.S. SENATOR FROM ILLINOIS

    Senator Duckworth. Thank you, Mr. Chairman.
    I'd like to discuss the value of community colleges in 
closing the skills gap. The first community college in the 
nation was established in Illinois in 1901. Joliet Township 
High School actually proposed an innovative solution to 
addressing the growing skills gap in 1901 that was occurring by 
going beyond traditional 4 years of high school and adding a 
fifth and sixth year of courses by partnering with the 
University of Chicago to get credit. So that was the first 
community college in the Nation.
    It's amazing that today, we're talking about the same 
skills gap happening again. And, in fact, we see this, 
especially back in Illinois, and even in my old congressional 
district, where I had the largest concentration--one of the 
largest concentrations of tool and die manufacturers in the 
Nation is in Illinois. Time and again, when I talked to 
manufacturers, what they said to me over and over again was, 
``Our machinists are aging out. The average age for a machinist 
in our plants is in their 50s, late 50s, and we don't have the 
next generation ready to come in.''
    That's why companies like Northrop Grumman, for example, 
partnered with our local community college to fund students 
going through a two-year program in manufacturing arts with a 
scholarship, with an internship, and at the end of those 2 
years, after the first year, Harper hired all seven of their 
initial group and are now funding nine, and this is spreading 
all across Illinois.
    So I just wanted to talk a little bit about what community 
colleges can do to provide valuable job training related 
efforts, such as registered apprenticeships, on-the-job 
training opportunities, and paid internships for low-income 
students. It's why I partnered with Senator Franken to re-
introduce the Community College to Career Fund Act that would 
create a competitive grant program that would fund more 
partnerships between industry and community colleges with the 
goal of making community college free for students coming out 
of high school.
    Ms. Marks, I thank you for your testimony on the work that 
you're doing with community colleges, and I thank you for your 
work on hiring veterans, as you partner with the Chicago public 
high schools to offer engineering opportunities for real, 
viable jobs, and your partnerships also with UI Labs Digital 
Manufacturing and Design Innovation Institute. Whew, that's a 
mouthful!
    In your opening statement, you highlighted several of 
Siemens' successful apprenticeship programs and included a copy 
of your playbook for other manufacturers in developing 
apprenticeship programs. Siemens is fortunate to have the 
resources to invest and develop these vital programs, but many 
small and medium size manufacturers and businesses do not. When 
I talked about that concentration of tool and die manufacturers 
in Illinois, they're all small and medium size businesses. Many 
of them are family run, mom-and-pop businesses.
    What can we do to build on your success and help small and 
medium size manufacturers and businesses establish 
apprenticeship programs?
    Ms. Marks. Well, there are several things we can do, but 
one is that a lot of those tool and die manufacturers are part 
of our supply chain, and we do business locally, so we do 
business with them. Being in all 50 states, we have the 
opportunity to share lessons, and we think by having this 
playbook that you referenced, which we did work on 
collaboratively with Alcoa, Dow, the National Association of 
Manufacturers, and the Department of Labor--it is scalable, and 
it shows you how to partner with a community college.
    We actually went in to the four community colleges in the 
four states we're in. We helped set the curriculum. We took 
people out of our facilities and our factories, and we helped 
share what would be needed in terms of technological skills and 
core educational analytic skills for these apprentices. So we 
believe that the playbook is scalable, whether you're a large 
company or a small, and we welcome the opportunity to share it.
    Senator Duckworth. Thank you. Oftentimes, you know, having 
served in the military for 23 years, people equate national 
strength with how many tanks and guns and helicopters we have 
in our arsenal, and, frankly, I find helicopters sexy, I've 
fired lots of guns, and ridden in tanks, so I'm there with 
them.
    But people underestimate the value of our manufacturing 
sector as a part of our national strength. It is just as 
important to have a strong manufacturing sector as it is to 
have a large standing military. And, in fact, we wouldn't have 
that military with all that great equipment if it were not for 
innovative American manufacturing. So I thank you for what 
you're doing, especially with this closing of the skills gap, 
working with community colleges, because I think that for so 
many of our kids across this country, they can't afford that 
four-year degree to start off with, and this is a great way to 
get started, not have debt, and then to go to work, and then 
say--you know, in a couple of years, these same kids are going 
to turn around and say, ``Yes, I want to become a manager on 
the assembly line. I'm going to go get that B.S.'' So thank you 
very much.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you, Senator Duckworth.
    Senator Cantwell?

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Mr. Chairman.
    Thank you to the panelists for your testimony and good 
comments about how important this is. From the perspective of a 
variety of other areas, I know we've talked about some of them, 
obviously, manufacturing, in general, and infrastructure, but, 
obviously, housing, energy, cybersecurity, aviation--they're 
all sectors with major transformation happening, and they need 
to continue to upgrade and skill the workforce for tomorrow.
    So one of the things that I'm interested in hearing about 
is how you think we could more aggressively incent that at the 
Federal level. One idea Senator Collins and I have put forth is 
tax incentives, which would be the first ever federally 
recognized incentive for apprentice. The reason why we've come 
to that conclusion is just that we saw so much gap after 2008 
with people not knowing where to make their investment, not 
knowing what to skill themselves in, not knowing which jobs are 
going to be there and which aren't. The fact that the 
apprentice program hires and trains is a real benefit for the 
individual worker.
    So I wanted to hear your thoughts on a Federal incentive 
for apprentice and whether you think that would be a good idea 
to help make up this gap.
    Colonel Cartney. Senator, it may be good. I think the 
biggest thing that we're going to need to do to incentivize it 
is to really raise the public awareness. And so you could do an 
incentive--I think there is currently a program out there 
that's currently helping community colleges to set up 
apprenticeships.
    But the biggest for us--the biggest thing dealing with 
student debt is that they get a good job when they're done. And 
I think no matter which program you target--and I think 
apprenticeships would be good because they are career focused--
that you take an approach that people have some type of work 
commitment following their education.
    Senator Cantwell. Well, I think it would be pretty big news 
if the President of the United States, who had a show called 
``The Apprentice,'' would sign his first bill which would be a 
first ever federally-recognized apprentice program to incent 
people, because I think it would get a lot of attention.
    Ms. Marks, I've seen the European model on apprentice, and 
thank you to Siemens for bringing it home to the U.S. in ways 
that you articulated in your testimony that you're doing. But I 
think that what I've seen, at least in the Pacific Northwest, 
where we are growing and growing at a rapid pace, is that we 
need people to make the commitment, and part of making that 
commitment is, as I said, taking the question marks away. Just 
getting people to be hired and trained takes away that. So our 
incentive investment, asking the manufacturers to do that by 
giving them incentive to do that, we thought would help speed 
up that process and the hiring.
    Ms. Marks. So our experience here in the U.S. has really 
shown us that the apprentice programs are best implemented 
locally, and that's where we focused, obviously, in our places 
where we have larger employment and where we have the need. But 
to us, there's a business imperative. So we've done this 
regardless of incentive, because we get quality employees out 
of this who are loyal and who spread the word about the 
program. To us, it's good business, and we're happy to share 
that with any other company who is interested.
    But, again, we found that in each of the four community 
colleges, the curriculum has had to be different. A welder is 
very different from a mechanic. So we've worked with them, and 
every community college has been tremendously responsive. We've 
never run into any issue.
    Senator Cantwell. Thank you.
    Mr. Neely, if I could, do you support making sure we get a 
functioning Export-Import Bank?
    Mr. Neely. Yes, ma'am.
    Senator Cantwell. Does that affect your business if we 
don't?
    Mr. Neely. It absolutely does. A direct connection to 
sales, period.
    Senator Cantwell. Pardon me?
    Mr. Neely. Direct connection to sales, period.
    Senator Cantwell. Well, we definitely need to get that 
board functioning.
    Thank you very much, Mr. Chairman.
    The Chairman. Thank you, Senator Cantwell.
    Senator Blumenthal?

             STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thanks very much, Mr. Chairman.
    Thank you to the panel for being here. This is a really 
wonderful panel.
    I want to begin by thanking Ms. Marks for the 
extraordinarily generous and important grant of manufacturing 
and design software that Siemens contributed to the Connecticut 
state colleges and universities--announced yesterday it's worth 
$315 million--just really amazing, and so thank you very much. 
We are very grateful to you in the state of Connecticut.
    Mr. Neely, as you know, your parent company, General 
Dynamics, is also the owner of Electric Boat. We're proud to 
make the world's best submarines. In fact, it serves as the 
submarine capital of the world in Groton, Connecticut, where I 
have visited many, many times, and where, in fact, there will 
be hiring of about 14,000 people, and that will be within the 
next few years--14,000 people by 2030, but 2,000 by the end of 
this year.
    They are building up, as you know, because we're making 
more submarines--two Virginia class a year, the Ohio 
replacement or Columbia class--an extraordinary success story 
for the benefit of our Nation. We're also going to be hiring--
Pratt and Whitney will be hiring thousands more employees 
because the F-35 is ramping up, and Sikorsky will be staying in 
the state, obviously not EB companies or General Dynamics, but 
we're very proud to be heavily invested in the defense 
industry. And it isn't only those corporations, it's also the 
supply chain.
    Whenever I visit these companies, whether there are 25 
employees or thousands, I say to them, ``You are as important 
as the men and women in uniform,'' and two of my four children 
have served, one in the Marine Corps deployed to Afghanistan, 
and the other now currently serving as a Navy officer, and he 
is deployed, and that's why I have a blue star on my lapel.
    But my view is that these employees, hardworking, 
dedicated, and loyal, are as important to building those 
weapons systems as any of the men and women who use them, 
because we couldn't do it without their skills. And, hopefully, 
their sons and daughters will be attracted to do the same kind 
of work and be trained to do that work. That's our challenge in 
Connecticut. How do we train them? How do we provide those 
skills and fill the jobs that exist now? And there are jobs. 
You go to the websites of these companies, and they have 
openings, but they can't find the right people to fill them.
    We've talked, I know, in this hearing about skill training. 
I think the investment in skill training is second to none in 
its importance to the future of our nation.
    Mr. Ratzenberger, I know you have a Connecticut connection 
as well--a home in Milford. I've seen you in Connecticut. I 
welcome you here. I'm wondering whether you see some 
opportunity for building a consensus, knowing of your skills in 
persuading and gaining awareness and attention--a consensus 
that we need to invest more heavily in this area.
    Mr. Ratzenberger. Absolutely. Anywhere I travel across the 
country, people come up to me because of my visibility and the 
Made in America show and different speeches I give around the 
country, and they all say the same thing, ``Thank you, thank 
you, thank you for bringing light to this problem.''
    I met one fellow, specifically, at JFK airport. I was 
heading south, and we were talking. He said, ``We thank you for 
all the work you do in manufacturing.'' I said, ``Where are you 
off to?'' He said, ``I'm on the way to Argentina to hire 
welders.'' He needed 20 welders. He owns a company just outside 
of New York City, and the fact--I mean, it was extraordinary, 
the fact that he couldn't find one welder, and we're talking 
about the Connecticut, New Jersey, New York area. He had to fly 
to Argentina to hire 20 of them, and that's how desperate 
people are, especially in Connecticut, as you know.
    Bullard-Havens in Bridgeport, Connecticut--Bridgeport at 
one time was the arsenal of democracy. We made everything. 
There wasn't a thing you could name that people in Bridgeport 
couldn't figure out how to make. I mean, you know, Thomas 
Edison invented the light bulb, but it was a fellow named 
Latimer in Bridgeport who invented the filament that actually 
made the light bulb practical, and the socket.
    So that's how important manufacturing is and people that 
know how to make things. But when you take the funding away 
from the technical high schools, like Bullard-Havens or Pratt 
Institute in Milford, you're not going to have the people 
showing up. I really applaud the President for bringing back 
manufacturing, but what I'm afraid is going to bite us all at 
the end of the day is the fact that we haven't educated the 
people to operate the machines in those factories.
    So I think that's A-1 on the list to put--you know, the 
state of Connecticut, especially--put funding back into those 
schools, because when you canceled shop classes all those 30 
years ago, the dropout rate--instantly, 30 percent to 40 
percent gone, because that's how many kids were dependent on 
those courses for their livelihoods, also coupled with the fact 
that 70 percent of all crimes committed in the United States 
are by high school dropouts.
    So why not reinstate those programs? It doesn't cost a lot. 
We've got the space. I can help you, you know. I still know how 
to use tools.
    Senator Blumenthal. Well, we'll use the tools that you have 
now--not so much welding and pipefitting, but the skills of 
public awareness, and I would welcome an opportunity to 
continue your great work and partner with you.
    My time has expired, but I want to thank, again, all the 
panelists. There's a report that will be coming out, which I 
will make sure you get. It's coming out today or tomorrow--the 
Connecticut Institute, the 21st Century, on the defense 
workforce, how Connecticut can promote growth and retention, 
and maybe we can work together on how to make sure that its 
goals and purposes are fulfilled.
    Thank you very much, Mr. Chairman.
    The Chairman. Thank you, Senator Blumenthal.
    Senator Johnson?

                STATEMENT OF HON. RON JOHNSON, 
                  U.S. SENATOR FROM WISCONSIN

    Senator Johnson. Thank you, Mr. Chairman.
    I want to thank all the witnesses for your testimony.
    Mr. Ratzenberger, I really want to thank you for using your 
celebrity to champion this exact issue.
    Before I did this crazy thing, becoming a U.S. Senator, I 
ran, operated, and owned a manufacturing plant for more than 30 
years in Oshkosh, Wisconsin. We spent a lot of money on 
education. To me, the bigger problem is attitude. I've traveled 
around the state of Wisconsin for six years. My own experience 
as a manufacturer--there's not one manufacturing plant in 
Wisconsin that can hire enough people--plenty of jobs, good-
paying jobs. I would say there are two reasons. One, we pay 
people not to work; and, two, we tell all our kids they've got 
to get a four-year degree, which implies somehow if you don't 
get a four-year degree, you're a lesser citizen.
    So one of the things I was involved in before running for 
Senate was the Partners in Education Council of our school 
system. Our efforts were soft skills as well as--the last one 
was next step after high school. How can you provide students 
and their parents the information on all of their options--
four-year degree, 2-year degree, technical college, military 
service, or just entering the workforce.
    A quick little story. A hundred times at those meetings, I 
said, ``We have to stop denigrating the trades.'' I had made 
that statement 2 minutes earlier, and a very wonderful school 
administrator started talking about a child, a kid, a young 
man. We'll call him Billy. He said, you know, ``Billy's 
struggling in school, you know. Let's face it. All Billy's ever 
going to be is a mechanic.'' Now, fortunately, we had the owner 
of Oshkosh Tire sitting at the table, and she said, ``Hey, I 
need those mechanics,'' and the administrator says, ``Oh, 
that's not what I meant.'' But, unfortunately, that's exactly 
what she meant, because we've been preaching this now for 
decades--you've got to get a four-year degree, which, again, 
implies that going into manufacturing, becoming a carpenter, a 
welder, a plumber--I can't do any of those things. We need 
those skills.
    So I'm all aware of the fact that we have to fund the 
manual arts--the essential arts. We've got to shift that 
attitude first, that all work has value, and you have to build 
things. I love your testimony, the pride in being able to 
produce a nut and bolt at one-five thousandths of an inch. 
That's an accomplishment. It has gotten better. It's incredibly 
difficult. It's what makes America better.
    I see no value in having American workers produce highly 
redundant products. The value comes in producing high quality 
products. So I just want to ask you how do we shift that 
attitude, and, by the way, do you agree with that?
    Mr. Ratzenberger. Oh, 100 percent, 100 percent. Earlier, we 
were talking about the media and the perception of the media, 
and I told a short story about a mother who didn't want her son 
to be a stone mason like his father because she was 
embarrassed. She didn't want the neighbors to think he was 
stupid. To me, it's extraordinary that people actually think 
like that, after coming from a background of people that worked 
with their hands. But there's a gallantry in it. There's honor 
in it, and these are the people that are essential, as you just 
mentioned.
    Imagine if every truck driver pulled off to the side of the 
road for a couple of hours. We'd grind to a halt. Or the diesel 
mechanics--I know there are big truck companies that can't find 
diesel mechanics.
    Senator Johnson. Or drivers.
    Mr. Ratzenberger. Right. Oh, they're desperate--every truck 
now you see, on the back it says, ``Drivers wanted. Call this 
number.'' I had a nice boat with diesel engines, and I ended up 
selling it because when I'd go up and down the East Coast, it 
was tough to find a diesel mechanic. We're running out of them.
    Senator Johnson. Senator Barrasso--I can't remember if it 
was his father or grandfather who laid cement, and they had 
these brass plates that they put in the cement because they 
were so proud of their work.
    Mr. Ratzenberger. That's right.
    Senator Johnson. Where did we lose that? I want to quickly 
go to Colonel Cartney--I got involved in education because the 
President of our Catholic school system had been the President 
of Fox Valley Technical College--really kind of world-renowned, 
because he brought the TQM principles--Stan Spanbauer was his 
name. He traveled around the world talking about how you engage 
in the President's Advisory Council, bringing businesses into 
education to align the skills that are required. This is what 
we're looking for in our manufacturing, in clerical skills, and 
in professional skills. What a concept, actually going into the 
workforce.
    I think this is something we can do within our 
communities--the positive engagement of the business community 
into your local middle schools, grade schools, high schools--we 
have to change that attitude--into technical colleges, into 
colleges. We have to realign those goals.
    And, Mr. Ratzenberger, anything I can do to team up with 
you in your effort as you champion this--I fully understand 
this issue. I understand these attitudinal things, and it is 
your celebrity that can really highlight this and make a really 
big difference, because this does not require a Federal 
Government solution. This can be done on the ground. This can 
be done quickly.
    We can change these attitudes around, because, as you said, 
when we took those skills out of high schools, all of a sudden, 
you have a 30 percent dropout rate, because the fact of the 
matter is not every kid should be going to college. There's a 
great book--if you haven't read it--Real Education by Charles 
Murray. I would highly recommend it.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Johnson.
    Well, this has been a great panel. Thank you all for your 
remarks and responses. The interaction has been great, and I do 
agree with everything that's been said about the need to re-
image, because there is a sense of accomplishment that comes 
with doing things, making things, building things.
    Senator Johnson can probably relate to this, too, but when 
I'm in my home state on weekends, during those seasons of the 
year when my lawn grows, and I mow my lawn, and I look at it 
and you feel pretty good. You feel like you've accomplished 
something, which is something that I think exceeds, in many of 
our day jobs here some days, the sense of accomplishment we 
have.
    But it is an important part, and it's almost kind of a lost 
part of our culture, and I think we need to restore its 
importance, not only because of how it shapes the attitudes and 
the values that our young people have, but also how it's going 
to be essential in the economy of the future. We've got to have 
those skill sets. So everything that you've said today adds 
resonance to this issue and helps us focus better on the things 
that we need to do. I just want to thank you for everything you 
all are doing in this field.
    I want to ask one last question, and it pertains a little 
bit to discussions that we're going to be having here in the 
near future with regard to infrastructure, and it's for you, 
Mr. DeJohn. It has to do with maybe discussing the effect that 
the skills gap has on the construction industry, specifically, 
in regard to how the skills gap affects the cost of 
construction projects, including infrastructure projects?
    Mr. DeJohn. Thank you for asking that question, Senator, 
because it is a huge concern to us as a company. As the 
infrastructure is starting to be put in place, and your 
retrofits of your bridges and dams, everything that you're 
reading about that's failing, without the skilled labor to know 
what has to be done, what we start to realize is increased 
costs from the subcontractor community, whereby the skilled 
labor is not in enough quantity to be able to support the 
amount of work that's coming out. So that's going to drive the 
prices up, but it will also slow down certain projects from 
even getting started.
    And then the last thing is without the skilled labor to 
suffice and fill all the positions, the amount of oversight and 
inspection that you have to put in to make sure that it's going 
in correctly--because somebody says, ``Well, I'm an 
electrician.'' Well, we want to test how an electrician is. Go 
open a cabinet and look at how the wires are run. If it looks 
like spaghetti, you'd better get another electrician.
    The same thing is going to happen with welders on bridges. 
It's not where the inspection is so easy that someone can walk 
over and look at it--yes, that's fine. You have to have certain 
buckets where you go underneath and look at it. It's a huge 
concern for us. As the largest builder in the country, it's not 
just buildings. The infrastructure side of everything that's 
going on has led to such a deterioration.
    You saw what happened to the dam in California during the 
heavy rains. They're lucky it didn't collapse, and to try to 
repair that, you know, that takes skilled labor that knows how 
to operate equipment on that type of an incline. Is that 
something that a mother says, ``Oh, I don't want my son to 
learn how to do that. He may save a city some day.'' It sure 
would be nice if somebody started to think that way. It really 
would.
    The Chairman. Thank you.
    We'll keep the hearing record open--Senator Blumenthal?
    Senator Blumenthal. One last quick question. Thank you, Mr. 
Chairman, for Mr. DeJohn following up on that remark.
    And thank you for being here from Connecticut and doing 
such great work for us in Connecticut. Turner Construction is 
known nationwide, but most especially in Connecticut for the 
great work you've done on our roads and bridges and the vast 
variety of projects.
    Mr. Ratzenberger mentioned the welders that he saw being 
recruited in Argentina, and maybe you could give us more 
specifically the skill sets--are they welders, engineers, 
designers, pipefitters--if you could give us those specific 
skills that you think we should be training people to do?
    Mr. DeJohn. One of the facts that Mr. Ratzenberger and I 
both put out--and there was a little bit of a difference--was 
the average age of the worker today. He was in the 50s. I was 
at 46. The reason our numbers were different was, as part of 
the construction community, we have a large amount of labor, 
just, you know, the people that go in, set up the project, set 
up the cleaning, remove the dumpsters. When you take that group 
out, which is typically the youngest group because they're in a 
lesser skilled group, the number of the average age goes into 
the 50s, and that's across the board.
    When 2004 to 2007 was a boom time, many people that got 
into the trades were someone that had not been skilled in it. 
When the economy started to fail in 2007-2008, not only did 
those people leave, but it stopped people from going into the 
trades, and now you've got retirement on top of it. It's an 
across the board area that we need to concentrate on.
    It goes back to the issue Senator Johnson brought up about 
pride. If you walk right down the street, the Willard Hotel--
when they reopened it, I was in Washington, D.C., working for 
PADC. The mosaic floor leading down Peacock Alley--take a good 
look at it. You will see someone's initials tapped in, because 
that's the way they were paid. That building was renovated. 
That floor is still there. It's a pride. People had pride then. 
If we're going to do anything today, it's to allow people to 
know that going into the trades is a proud thing to do.
    John said, ``Look, I put a roof up.'' Well, I grew up in a 
community--or in a family of tile marble and terrazzo setters 
in upstate New York, and I can still drive by buildings today 
and say, ``My father worked on that. I pushed a wheelbarrow in 
there.'' If you can help us in any way do that, it would be 
tremendous.
    Senator Blumenthal. Thank you. That's really powerful. 
Thank you.
    The Chairman. Yes. Here, here.
    Again, we'll keep the hearing record open for two weeks, 
and if Members have additional questions they want to submit 
for the record, if you could, get those responses back to us as 
quickly as possible.
    And, again, thank you. Thank you to all of you for being 
here today and for all that you've added to this discussion and 
conversation. It's an issue that we need to be having more of a 
public discussion about and things that we can be doing to not 
only change attitudes and perceptions, but also provide 
incentives for people to enter into these fields that are going 
to be so necessary, not only in the present but in the future.
    With that, this hearing is adjourned. Thanks.
    [Whereupon, at 12:03 p.m., the hearing was adjourned.]

                            A P P E N D I X

     Response to Written Question Submitted by Hon. Dean Heller to 
                              Rory DeJohn
    Question. In this Committee, we've looked at emerging technologies 
like the Internet of Things (IOT) and Artificial Intelligence.
    These technologies are going to change the needs of different 
industries.
    As these technologies advance and become more widely adopted, are 
you thinking now about how this will change the employee skills needed 
for your industry?
    Answer. We are always thinking about how to meet the next 
challenge, for ourselves and for our clients. As emerging technologies 
continue to drive changes in our industry, we must do everything we can 
to stay abreast of those changes and to harness the advantages they 
provide. This means training our people and creating opportunities for 
them to seek training throughout their careers--we are strong believers 
in continuous learning. It also means recruiting college graduates and 
other new hires who come out of engineering programs--or other 
academic/trade disciplines--comfortable with the latest technology 
tools.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maggie Hassan to 
                              Rory DeJohn
    Question 1. New Hampshire receives $6 million from the U.S. 
Department of Labor under the Workforce Innovation and Opportunity Act 
(WIOA). As you likely know, the President's budget blueprint proposes 
cutting 21 percent of the Department of Labor's budget and states that 
the budget, ``Decreases Federal support for job training and employment 
service formula grants, shifting more responsibility for funding these 
services to States, localities, and employers.'' One thing these funds 
go toward is workforce training and education in high-demand fields, 
including WorkReadyNH which is a collaboration between state agencies 
to ensure our workers have both basic skills and softskills when 
entering or re-entering the workforce. With the health care sector 
projected to increase by 14 percent between 2016 and 2021, and the IT 
sector with a projected growth of 15 percent over the same period, job 
training and education opportunities in these sectors, and others will 
be essential. What do these proposed cuts mean to the ability of 
companies like yours to find the workforce they need?
    Answer. A skilled, well-trained workforce is necessary for 
maintaining and building competitive advantage. The public sector and 
private sector have always collaborated and must continue to 
collaborate in providing training opportunities to people interested in 
improving their skills.

    Question 2. What I hear most from business leaders in New Hampshire 
is that they do not have access to a skilled workforce. With the lowest 
unemployment rate in the country at 2.7 percent--it is essential to not 
only work with dislocated workers, but to support individuals in re-
joining the labor market and train individuals who are underemployed. 
Organizations, like Families in Transition NH, have had a lot of 
success lifting individuals out of poverty by providing wrap-around 
supports, like affordable housing options, child care, job-training and 
case management. As we talk about the importance of supporting and 
improving job training programs, do you think it is important to 
provide wrap-around services? Have you seen the impact of these kinds 
of programs in your work?
    Answer. As our industry is experiencing a growing need for labor, 
we have looked beyond our traditional methods of recruiting. This has 
led us, and others, to seek people wanting to make a transition from 
low-skilled occupations to careers in construction. In addition, we 
participate in efforts and programs that offer a helping hand to people 
making other transitions--from the military as well as from communities 
where people feel stuck and do not see a path toward the opportunities 
to advance. Whatever the specific transition is, we find these people 
often do need some extra support and encouragement to successfully make 
that transition.
                                 ______
                                 
 Response to Written Question Submitted by Hon. Catherine Cortez Masto 
                             to Rory DeJohn
    Question. The biggest request for support that I hear from 
technical education institutions and educators is for additional 
funding to expand and adapt programs to fit the needs of the 
industries, and reach more students. Unfortunately, however, this 
Administration has proposed numerous cuts to the budget that support 
such programs. What do you think the Federal Government can do to more 
effectively support the expansion of programs that train our students 
in technical fields?
    Answer. There certainly is a need for more students to benefit from 
attending technical high schools. The Federal Government, educators and 
parents can all be a positive influence by encouraging an allocation of 
education resources necessary to support the needs our students and 
industry.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Dean Heller to 
                        Colonel Michael Cartney
    Question. Nevada has developed great programs for meeting our 
state-specific skills gap. But we can't guarantee that students will 
move toward these fields.
    How do we encourage students to pursue fields--like autonomous 
vehicles, energy storage, and cybersecurity--that will help states like 
Nevada close their own skills gaps?
    Answer. Thank you for your question. Attracting students, both 
traditional and non-traditional is really at the core of our workforce 
skills gap dilemma. Generally, there are three areas of focus that must 
be addressed: (1) the community must value the occupation, (2) the 
education has to be achievable, and (3) there has to be a quantifiable 
return on investment for the student.
    How a community values an occupation is a perception that needs to 
be addressed by industry as well as education. Often, the first step is 
exposure to prospective students and the families, of the career and 
its benefits. We are not going to attract students to the energy 
storage industry if they do not even know what it is. Industry plays a 
key role in imaging, and often re-imaging, their industry. Most work 
environments have evolved significantly in the past 30 years, but 
someone not in that industry will be unaware of the changes if someone 
is not out proactively informing the community. National campaigns, 
such as General Electric's recent series of commercials, can be strong 
influences in getting potential students interested in technical 
careers, and thus technical education. This past year, the voters of 
South Dakota, with overwhelming support for industry, passed a 
constitutional amendment recognizing post-secondary technical education 
as the third form of education in our state. If industries and 
educational communities together raise the awareness of an occupation's 
value, it will make those seeking and entering that occupation feel 
valued.
    Once the community values the occupation, potential employees must 
see the path to that occupation as achievable. Achievable must go well 
passed superb colleges like your Great Basin College providing industry 
aligned technical programming. It means the training, education, and 
ultimately good paying positions are readily available, and potential 
employees (students) believe the pathway before them is within their 
reach. A good college education requires work, but Lake Area Technical 
Institute has found that confidence in themselves and valuing the 
occupation are better indicators of student success than high school 
GPAs.
    Before anyone walks a path, they must believe it is a journey worth 
taking. And, although there is significant merit to the self-growth 
aspects of higher education, at the end of the day, for many Americans, 
it boils down to the return on investment--in the terms of finances. If 
someone off the street can start at the same salary and position as 
someone with a college certificate or two-year degree, then there is no 
motivation for an individual to seek the education. The bottom line is 
we must increase the return or change the investment. In order for an 
occupation requiring college level technical skills to be successful, 
the industry must value the education in the terms of salary and 
position--or it can value it by lowering the monetary investment from 
the student. I dislike the phrase ``Free community college,'' college 
costs someone something. But for hundreds of South Dakotas, there is a 
way to get a college degree for limited monetary investment, as long as 
you are willing to commit to working in SD, and possibly committing to 
work for a specific company.
    Other references:

    I have worked with Great Basin College in the past as part of the 
Western Interstate Compact on Higher Education (WICHE). My staff and I 
are always willing to share best practices and talk through specific 
issues at any time with your educational, industry, or government 
stakeholders on this topic. We can be reached through 
www.lakeareatech.edu.
    The Aspen Prize for Community College Excellence. http://
highered.aspen
institute.org/aspen-prize/ is also a great source. With seven years of 
experience in examining community colleges across the country for best 
practices, the Aspen Prize organization can point you to colleagues 
experienced in a number of topics.
    Finally, in his book What Excellent Community Colleges Do, Joshua 
S. Wyner draws on the insights and evidence gained in administering the 
inaugural Aspen Prize for Community College Excellence. This book 
identifies four domains of excellence--degree completion, equity, 
student learning, and labor market success--and describes in rich 
detail the policies and practices that have allowed some community 
colleges to succeed in these domains. By starting with a holistic 
definition of excellence, measuring success against that definition, 
and then identifying practices and policies that align with high levels 
of student success, Joshua seeks provides a body of knowledge about 
improving student success in community colleges.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Todd Young to 
                        Colonel Michael Cartney
    Question 1. Colonel Cartney, thank you for taking the time to be 
here today. I am intrigued in the successes you have seen at your 
institution. Similarly, I have seen the same dynamic in my home state 
of Indiana. The shortage of much-needed skills requires a stable 
pipeline, which many programs at community colleges and our high 
schools serve to address this issue. Over the past few years, the 
demand for a skilled workforce has led to increased participation in 
career and technical education programs. In 2013, over 2,000 high 
school students were enrolled in some type of CTE coursework in 
Indiana. In 2014, over 3,000 graduating seniors earned an industry 
credential, which is an increase of 48 percent from 2012. Even more 
impressive, 8,603 students earned college credits and saved 
collectively four million dollars for Hoosier families. What are some 
ways to expand the growth we have seen in career and technical 
education? What tools can we provide for our students, their teachers, 
and the local businesses in our communities to scale up programs that 
are working?
    Answer. Thank you for your questions. As the U.S. Air Force saw fit 
to sponsor my master's degree work at Purdue University, I know first-
hand the top notch higher educational system in Indiana! The Hoosier 
state can be proud of their educational system. First let's discuss 
influencing the career and technical education participation in the K12 
system. Your state has a strong start on growing CTE, but like South 
Dakota, it only eases a still looming technically skilled workforce 
demand.
    The short answer would be continuing what you are doing! Continuing 
to increase your growth would likely mean: earlier exposure, broader 
engagement, and richer experiences on the K12 side. Allowing industry 
representatives into classrooms to teach pertinent lessons that include 
exposure to the career fields, encouraging industry involvement in 
expanding and enhancing your existing CTE offerings, industry summer 
camps, career days, exposure to post-secondary career programs through 
online and on-campus experiences, and then coupling those experiences 
with a robust CTE dual credit partnership with your state colleges.
    At the post-secondary level attracting students, both traditional 
and non-traditional is really at the core of our workforce skills gap 
dilemma. Generally, there are three areas of focus that must be 
addressed: (1) the community must value the occupation, (2) the 
education has to be achievable, and (3) there has to be a quantifiable 
return on investment for the student.
    How a community values an occupation is a perception that needs to 
be addressed by industry as well as education. Often, the first step is 
exposure to prospective students and the families, of the career and 
its benefits. We are not going to attract students to precision 
machining if they do not even know what it is. Industry plays a key 
role in imaging, and often re-imaging, their industry. Most work 
environments have evolved significantly in the past 30 years, but 
someone not in that industry will be unaware of the changes if someone 
is not out proactively informing the community. National campaigns, 
such as General Electric's recent series of commercials, can be strong 
influences for getting potential students interested in technical 
careers, and thus technical education. This past year, the voters of 
South Dakota, with overwhelming support for industry, passed a 
constitutional amendment recognizing post-secondary technical education 
as the third form of education in our state. If industries and 
educational communities together raise the awareness of an occupation's 
value, it will make those seeking and entering that occupation feel 
valued.
    Once the community values the occupation, potential employees must 
see the path to that occupation as achievable. Achievable must go well 
passed superb colleges providing industry aligned technical 
programming. It means the training, education, and ultimately good 
paying positions are readily available, and potential employees 
(students) believe the pathway before them is within their reach. A 
good college education requires work, but Lake Area Technical Institute 
has found that confidence in themselves and valuing the occupation are 
better indicators of student success than high school GPAs.
    Before anyone walks a path, they must believe it is a journey worth 
taking. And, although there is significant merit to the self-growth 
aspects of higher education, at the end of the day, for many Americans, 
it boils down to the return on investment--in the terms of finances. If 
someone off the street can start at the same salary and position as 
someone with a college certificate or two-year degree, then there is no 
motivation for an individual to seek the education. The bottom line is 
we must increase the return or change the investment. In order for an 
occupation requiring college level technical skills to be successful, 
the industry must value the education in the terms of salary and 
position--or it can value it by lowering the monetary investment from 
the student. I hesitate on the phrase ``Free community college,'' 
college costs someone something. But for hundreds of South Dakotas, 
there is a way to get a college degree for limited personal monetary 
investment, as long as you are willing to commit to working in SD, and 
possibly committing to work for a specific company.
    What are some tools you can add to key stakeholder tool bags? The 
top of the list has to be industry partners. Indiana Industries have a 
vested interest in your CTE programs and educational offerings. Work 
with them on identifying and understanding the key role they play in 
student success. On both the K12 and post-secondary sides industry 
partners serve as student mentors, advising and consulting on 
curriculum, and helping provide support structures for students who 
need one. The formation of industry sector cabals to support programs 
in high school and postsecondary is key to increasing participation.
    Other needed shifts are in our Federal and State approaches to 
providing higher education in support of employment. There is inherent 
value in higher education and for many that inherent value, self-
growth, and discovery is the justification for seeking higher 
education. But for millions of Americans, the reason they seek higher 
education is to better their lives and the lives of the families. Their 
goal is to achieve the American dream. For them, it is education with a 
purpose, it is about getting a better job, not just a degree. But, the 
current system does not serve them well. Requiring someone to get all 
of their education before they seek employment does not work for 
millions. Yet all of our systems, processes, and funding seem to be 
centered around this culture and in this paradigm. This is something 
that we need to exam and change. We must align our educational and 
occupational careers, and find ways to meld our financial aid, 
scholarships, and support systems to enable this.
    As one significant component to enable this, Lake Area Tech 
redefined success as placement, not graduation. With prospective 
students, we talk about what they want to be, not what degree are they 
seeking. Redefining success as placed (employed or continuing their 
education), and making graduation (completion) a step along their 
journey affects not only the faculty and staff of the institution, but 
also students, parents, and industry need a different perspective on 
their education.. At the institutional level, the first step was 
formally changing our mission statement to ``Lake Area Technical 
Institute: superior, comprehensive technical education that changes 
lives and launches careers'' to focus this initiative. This subtle 
adjustment changes the whole conversation and focus with potential and 
current students. Rather than discussing degrees, which is an abstract 
concept to many new students, you are discussing what they want to be, 
what they want their future to be, and then laying out a path for them 
to get there. Instead of discussing ``where can you go with a 
particular degree,'' you are discussing which degrees can get you to 
where you want to go. Things become immediately more relevant. Going to 
class, doing homework, and passing tests--it's not just about 
completing a course, but rather, it's about learning what you need to 
know to be what you want to be! This subtle but sweeping change gives 
higher education the purpose our prospective students are looking for.
    Other references:

    My staff and I are always willing to share best practices and talk 
through specific issues at any time with your educational, industry, or 
government stakeholders on this topic. We can be reached through 
www.lakeareatech.edu.
    The Aspen Prize for Community College Excellence. http://
highered.aspen
institute.org/aspen-prize/ is also a great source. With seven years of 
experience in examining community colleges across the country for best 
practices, the Aspen Prize organization can point you to colleagues 
experienced in a number of topics.
    Finally, in his book What Excellent Community Colleges Do, Joshua 
S. Wyner draws on the insights and evidence gained in administering the 
inaugural Aspen Prize for Community College Excellence. This book 
identifies four domains of excellence--degree completion, equity, 
student learning, and labor market success--and describes in rich 
detail the policies and practices that have allowed some community 
colleges to succeed in these domains. By starting with a holistic 
definition of excellence, measuring success against that definition, 
and then identifying practices and policies that align with high levels 
of student success, Joshua seeks provides a body of knowledge about 
improving student success in community colleges.

    Question 2. Colonel Cartney, rural and urban areas often have 
unique workforce needs specific to their environment. Urban areas may 
have more job opportunities while rural areas have less openings and 
rely heavily on a few employers. I see this dynamic across my home 
state of Indiana, and partnerships in more rural communities--like in 
Clark County--become vital to the health of the community. However, 
urban communities may need a slightly different approach. What are some 
ways we can address the diverse workforce needs of rural and urban 
areas?
    Answer. You are 100 percent correct, while there is commonality in 
many aspects of serving an urban versus rural population, there are 
also marked differences. Rural individuals and businesses are likely to 
be location bound, meaning they cannot just pick and move to wherever 
the college is. In the Urban environment with low unemployment, the 
likelihood business will hire a student away from pursuing their 
education is much higher. For these two main issues, LATI has developed 
our ``Learn Where You Earn'' methodology and established Business 
Partners Specialists. In our rural environment, LATI has seen the 
necessity to move to the online environment. However, hands-on 
technical education/training at a distance can be problematic. Learn 
where you earn is a set of tactics we employ to use a mix of online 
academics and onsite (either on campus or at an industry partner's 
facility) in hybrid models to take education to our students. The 
business partner specialists are the key to partnering with industry to 
bridge the distance and resources gaps to support our students. They 
are fully versed in a variety of ways businesses can help students be 
successful, and fully versed on the return on investment for the 
business in supporting education. My staff and I are always willing to 
share best practices and talk through specific issues at any time with 
your educational, industry, or government stakeholders on this topic. 
We can be reached through www.lakeareatech.edu.
    Lake Area Technical Institute publishes our graduate recruitment 
playbooks. These playbooks outline ideas for communities and businesses 
to attract graduates. In both environments, it is not just about the 
job for the newest generations entering our workforce--and the play 
books outline thoughts for how to capitalize on your strengths. But, 
there are exceptional colleges across the Nation doing great things in 
career and technical education. Centers of Excellence in Career and 
Technical Education could serve as catalysts and advocates for best 
practices in the technical education realm. Although at the core they 
deliver the same broad service, ``HIRE'' education is a different focus 
and mindset than the traditional higher education system. For many, 
this change will not happen quickly.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Tammy Baldwin to 
                        Colonel Michael Cartney
    Question 1. Wisconsin is one of the Nation's top states for 
manufacturing (a ``middle-skill'' industry). As I travel around the 
state meeting manufacturers, the skills gap has been a frequent topic 
of conversation. While the conversation often turns to training and 
recruiting, for a state with 3.7 percent unemployment, I hear concerns 
that the problem is larger than just ``skills'' but about finding the 
workers in the region at all. This problem has been dubbed, `the body 
gap' and it is one of the first things Wisconsin manufacturers tell me 
about when we meet. Colonel Cartney, as you know this problem puts 
tremendous stress on schools like yours to supply talent. In Wisconsin, 
our technical college system addresses this by conducting `boot camps' 
in critical skill areas. What is the most effective approach you have 
seen to address these skill and ``body'' shortages in your region and 
how can they be replicated nationally?
    Answer. Thank you for the questions. You are 100 percent correct, 
once you have optimized your K12 to technical careers pipeline and 
upskilled those available, you need to recruit new workforce members 
into the region. The number one change in recent years has been that 
the focus for recruiting people is not just on the job and 
compensation. Lake Area Tech publishes two key ``playbooks'', one for 
industry and one for communities, which outline tools and techniques 
for industries and communities to market their WOW factor to attract 
workers.
    Second, the Build Dakota concept of paying for a student's 
education in exchange for a workforce commit in South Dakota seems have 
promise. By targeting some of the scholarships out of state, we are 
able to grow our workforce. This approach is also common for the U.S. 
Military, where, for example, a full ride through one of our Academies 
or an ROTC scholarship includes a commitment to military service.
    One commonly overlooked aspect is if your servicing higher 
education organization sees provide programming focused on your local 
workforce needs as a core mission. Your local higher education needs to 
be ``community or industry facing,'' meaning they view the community 
and local industry as key stakeholders. Often, higher education 
organization are ``state, accreditation, or funding'' facing, meaning 
they are most responsive to those entities. A community or industry 
facing organization sets it goals, success indicators, and measures so 
they are responsive to the community and local industry needs. A 
leading objective at LATI is to align our educational tracks with SD 
industry needs and make sure there are jobs for our graduates in high-
demand workforce areas in South Dakota. Many educational systems do not 
even consider post-graduate employment when counselling their students, 
or when establishing programs of study. When that happens, there is 
even a larger gap between workforce needs and the skilled graduates. 
Our relationship with industry partners is a crucial component to the 
success Lake Area Tech has realized in graduate placement and helping 
to fill the workforce gap.
    The vast majority of our students obtain their education on campus. 
However, we recognize that may not work for non-traditional or 
location-bound students, including those interested in fields with a 
high workforce demand. In our rural environment, LATI has seen the 
necessity to move to the online environment. However, hands-on 
technical education/training at a distance can be problematic. Learn 
where you earn is a set of tactics we employ to use a mix of online 
academics and onsite (either on campus or at an industry partner's 
facility) in hybrid models to take education to our students. Our 
business partner specialists are the key to partnering with industry to 
bridge the distance and resources gaps to support our students. They 
are fully versed in a variety of ways businesses can help students be 
successful, and fully versed on the return on investment for the 
business in supporting education.
    Another successful step Lake Area Tech has taken to help fill the 
body gap is working together with industry partners. One example of 
involving industry is advisory board participation. Each one of our 
programs is overseen by an advisory board comprised of faculty and 
industry members who help ensure our graduates meet the needs of 
industry. Their vital input helps keep our programs up-to-date on what 
is happening in the real world regarding workforce needs and trends. On 
the other hand, industry members learn more about LATI by participating 
in advisory boards (and other LATI leadership boards) and use that 
information to educate other people in industry about our programs. 
It's a win-win situation.
    Other successes include: using state grant funding, Watertown's 
economic development arm is able to offer funds for relocation 
expenses; the state has marketing plans to attract native South 
Dakotans ``back to their roots,'' and we broadly market that South 
Dakota is one of the best places in the Nation to Live, Work, and 
Learn!
    Finally, the use of technology to ease workforce demands, often by 
shifting the type of skilled individually needed must be examined. For 
example, maybe I cannot find enough people with the motor skills to be 
welders, but I have people I can train to examine welds done by a 
robot. So I implement an automated solution to lay the welds and add 
the welding inspector position.
    Other references:

    My staff and I are always willing to share best practices and talk 
through specific issues at any time with your educational, industry, or 
government stakeholders on this topic. We can be reached through 
www.lakeareatech.edu.
    The Aspen Prize for Community College Excellence, on which Siemens 
USA is a major sponsor and advocate, is also an excellent source for 
best practices. http://highered.aspeninstitute.org/aspen-prize/ is also 
a great source. With seven years of experience in examining community 
colleges across the country for best practices, the Aspen Prize 
organization can point you to colleagues experienced in a number of 
topics.
    Finally, in his book What Excellent Community Colleges Do, Joshua 
S. Wyner draws on the insights and evidence gained in administering the 
inaugural Aspen Prize for Community College Excellence. This book 
identifies four domains of excellence--degree completion, equity, 
student learning, and labor market success--and describes in rich 
detail the policies and practices that have allowed some community 
colleges to succeed in these domains. By starting with a holistic 
definition of excellence, measuring success against that definition, 
and then identifying practices and policies that align with high levels 
of student success, Joshua seeks to provide a body of knowledge about 
improving student success in community colleges.

    Question 2. I am very pleased to see the bipartisan support for 
workforce training and career and technical education on display at 
this hearing today. Coming from Wisconsin, I have long been a supporter 
of apprenticeship and vocational training programs. The nation's first 
apprenticeship law was passed there in 1911. The same year the 
Legislature established the state's vocational school system to provide 
instruction to new apprentices. That system, now known as the Wisconsin 
Technical Colleges System served as a model for the Nation. As the Co-
Chair of the Senate's CTE Caucus, (and a STEM-educated worker myself) I 
have introduced legislation called America's College Promise to provide 
free resident tuition for two years of community and technical college. 
I've also introduced legislation to allow students enrolled in short-
term CTE programs to qualify for student loans. Colonel Cartney, as an 
educator, how often do you encounter students who are unaware of CTE 
opportunities or unable to afford them? Do you believe waiving tuition 
and broadening the applicability of student loans could help solve the 
skills gap issues we've discussed today by improving access to CTE?
    Answer. Unfortunately, we frequently encounter students who are 
unaware of CTE opportunities and/or are unable to afford tuition. In 
some cases, not being aware of the CTE opportunities is not the fault 
of the student at all. In South Dakota, we know that some high school 
graduates have never been exposed to Career and Technical education in 
their K-12 experience. This is due to a number of factors including 
cuts in funding, graduation requirements, and a greater emphasis on 
four-year college attendance. Also contributing to this problem is the 
emphasis on `having to attend' a four-year college by parents, 
students, and high school counsellors is also an issue. (Incidentally, 
high school counsellors and teachers are almost exclusively four-year 
degree holders who are helping our youth plan their futures.) The 
opinion of many is that students need to continue their post-high 
school education at a four-year college to make something of 
themselves. The benefits of technical education that enables a career 
AND allows for continued education are being overlooked by those 
subscribing to that attitude.
    At Lake Area Tech, we address this very issue with focused 
strategies. We believe getting potential students (even at a very young 
age) on campus is an important first step in educating them on 
everything a technical education has to offer. Throughout the year, we 
invite grade school, middle school, and high school students to Lake 
Area Tech for activities that combine having fun and being educated. 
Third graders tour select programs during our annual 3rd Grade College 
for a Day, sixth graders are invited annually for Ag Day at the Farm, 
eighth graders attend the annual Men/Women in Science Day, sophomores 
participate in Equity Day, juniors attend Junior Tech Day, and seniors 
attend Senior Tech Day. In all cases, either teachers, parents, and/or 
school counselors are along and gain valuable knowledge of our programs 
of interest.
    We also hold school district in-services for local K-12 teachers 
and counselors on campus. This offers them first-hand knowledge of our 
facilities and familiarizes them with faculty and services. Dual credit 
classes are also held on-campus for area high schoolers, providing yet 
another opportunity for exposure and education. The program is highly 
successful. Last semester we provided more than 1,000 credit hours to 
high school students.
    We put our fair share of miles on the road, too. Our admissions 
representatives travel extensively throughout the regions visiting high 
schools and participating in college and career fairs to talk to 
students about careers in technical education. These visits are 
valuable as they not only focus on educating the students, but just as 
importantly, the school counselors and teachers.
    At Lake Area Tech, students who are unable to afford the cost of 
technical education have options. Recognizing cost as one of the 
biggest factors to attracting as well as retaining students, Lake Area 
Tech strives to make college affordable and minimize the financial 
barriers. LATI offers low-cost on-campus child care and works with 
students to qualify for state childcare assistance. By providing 
cafeteria services in-house and at-cost, we offer nutritious, 
affordable meals. Our bookstore also operates at a target margin of 
less than 10 percent. Bolstered by campus initiatives, instructors work 
diligently to keep costs of text books, tools, and technology in check 
while ensuring students have access to high-quality equipment needed to 
succeed. Over 65 percent of courses use the learning management system 
to provide resources to students compared to a 60 percent national 
average; therefore, reducing the overall cost of materials.
    Also, LATI developed a Prior Learning and Work Experience Model to 
assess the training experiences of veterans and students previously 
employed in the field to identify accelerated graduation paths. This 
enables students to accelerate degree completion time and save on the 
overall cost of their degree. Remarkably, even though technical 
education is more expensive than traditional forms of education, the 
last calculated default rate at Lake Area Tech, 6.1 percent, is nearly 
one-half the national average, 11.3 percent, on student loans.
    We are fortunate that, at the state level, the South Dakota Office 
of Economic Development has funded over $1 million in equipment to LATI 
annually to expand access to the latest technology without increasing 
the cost to students. The state also matched the $25 million private 
donation from T. Denny Sanford to create the Build Dakota Scholarship 
fund. LATI expanded the reach of the full-ride scholarships through the 
Stretch the Million program with over 20 partners initially pledging 
$175,000-$200,000. Beyond the Build Dakota Scholarship program, our 
LATI foundation is instrumental in expanding access to college through 
scholarships. Last year, the foundation awarded over 400 scholarships 
exceeding $390,000. Additional efforts to keep college affordable 
include participation in the national Free Application Week, Financial 
Aid Workshops, Financial Aid Literacy Program, and credit for corporate 
education and prior learning.
    Finally, South Dakota's Technical Institutes have partnered with 
industry, communities, and state government to take on our skills gap 
head on. Over 300 businesses work with Lake Area Tech's faculty and 
students to provide a coherent and relevant educational experience that 
support our state's workforce demands. These businesses consult and 
oversee curriculum, provide internships and on-the-job experience for 
students, provide industry standard training aides and equipment for 
the students to learn with, mentor our students, and most importantly 
they hire our students--in short, they are heavily invested in their 
pipeline.
    Regarding waiving tuition and broadening the applicability of 
student loans: Thank you for the question. The Build Dakota concept of 
paying for a student's education in exchange for a workforce commit in 
South Dakota could be mirrored at the national level. I hesitate on 
phrases like waiving tuition and ``free community college,'' because 
college costs someone something. But for hundreds of South Dakotans, 
there is a way to get a college degree for limited monetary investment 
(as mentioned above), as long as you are willing to commit to working 
in SD, and possibly committing to work for a specific company.
    This approach is also common for the U.S. Military, where, for 
example, a full ride through one of our Academies or an ROTC 
scholarship includes a commitment to military service. By tying 
financial aid to employment commitment in corresponding occupations, 
you would not only target your investment in a more meaningful way, but 
you would also provide the means for student to repay their student 
debt. You could also examine tax credits for both employers and 
employees who work in the field of their education (e.g., make their 
student loan payments tax deductible).
    Finally, what can be done at the Federal level to support Technical 
Education? Technical education is expensive, and institutional funding 
from the Federal Government is vital. However, Federal financial aid 
for students is also crucial, and is often the turning factor in 
whether someone even seeks higher education. However, the financial aid 
system can be extremely hard to navigate and use if you do not go from 
high school to college. One example would be we need to change the 
rules for Federal financial aid to allow someone leaving a four-year 
school, after absorbing 2 or 3 years of Federal PELL and loans, to go 
to a technical school and still have the 2 or 3 years of financial aid 
support required to get a technical degree or retrain. This law was 
changed approximately 4 years ago. Other innovative ideas could include 
tax incentives for employers who allow their employees time to 
accomplish their education, tax credit to working graduates for paying 
their student loans back, and easing the access to educational benefits 
due to our nations veterans'.
    My staff and I are always willing to share best practices and talk 
through specific issues at any time with your educational, industry, or 
government stakeholders on this topic. We can be reached through 
www.lakeareatech.edu.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maggie Hassan to 
                        Colonel Michael Cartney
    Question 1. New Hampshire receives $6 million from the U.S. 
Department of Labor under the Workforce Innovation and Opportunity Act 
(WIOA). As you likely know, the President's budget blueprint proposes 
cutting 21 percent of the Department of Labor's budget and states that 
the budget, ``Decreases Federal support for job training and employment 
service formula grants, shifting more responsibility for funding these 
services to States, localities, and employers.'' One thing these funds 
go toward is workforce training and education in high-demand fields, 
including WorkReadyNH which is a collaboration between state agencies 
to ensure our workers have both basic skills and softskills when 
entering or re-entering the workforce. With the health care sector 
projected to increase by 14 percent between 2016 and 2021, and the IT 
sector with a projected growth of 15 percent over the same period, job 
training and education opportunities in these sectors, and others will 
be essential. What do these proposed cuts mean to the ability of 
companies like yours to find the workforce they need?
    Answer. Thank you for the questions. Since the programs in question 
are overseen by our Department of Labor and Regulation, I turned to 
them for assistance in this reponse. What I learned is the following 
programs provide about $6.6M of an estimated $17.6M in Federal funding 
of workforce programs for South Dakota. A 20 percent reduction would 
represent approximately $1.3M cut. In FY16, they assisted 6470 
individuals, so a reduction would impact SD's workforce training and 
education in high-demand fields.
    Workforce Innovation and Opportunity Act (WIOA) Adult: WIOA is an 
employment and training program designed to provide services that will 
increase skills for adults through education and job training programs 
so they may overcome barriers to employment.

    Individuals served in FY16 = 5,775

    WIOA Dislocated/Rapid Response: WIOA Dislocated provides training 
and career services to people who have been laid off and seeks to train 
people for occupations where there is a high demand for workers such as 
welders, accountants, teachers, and more.

    Individuals served in FY16 = 205

    WIOA Youth: WIOA Youth provides a systematic and coordinated 
approach to career services to people between the ages of 14 and 24 who 
are low income and have barriers to employment by offering assistance 
in completing education and providing work experiences and training.

    Individuals served in FY16 = 344

    WIOA Statewide Allocation: States are allowed to use a portion of 
WIOA to meet the unique needs of their employment programs. South 
Dakota uses this funding for Dakota Roots activities, National Career 
Readiness Certificate activities, and grant monitoring activities.

    WIOA Administration: Funding used for administering the various 
WIOA programs.

    Disability Employment Initiative: The Workforce Training division 
assists in providing job search techniques and basic employment skills 
to individuals with disabilities over the age of 18 and seeking 
employment.

    Individuals served in FY16 = 63

    Trade Act Assistance (TAA): TAA assists workers who have lost their 
jobs as a result of foreign competition by providing training 
opportunities for displaced workers.

    Individuals served in FY16 = 83

    TAA Administration: Funding used for administering the TAA program.
    TAA Case Management: DLR local office staff assists employers with 
obtaining certification for the TAA program so former employees may 
apply for TAA training benefits.

    Question 2. What I hear most from business leaders in New Hampshire 
is that they do not have access to a skilled workforce. With the lowest 
unemployment rate in the country at 2.7 percent--it is essential to not 
only work with dislocated workers, but to support individuals in re-
joining the labor market and train individuals who are underemployed. 
Organizations, like Families in Transition NH, have had a lot of 
success lifting individuals out of poverty by providing wrap-around 
supports, like affordable housing options, child care, job-training and 
case management. As we talk about the importance of supporting and 
improving job training programs, do you think it is important to 
provide wrap-around services? Have you seen the impact of these kinds 
of programs in your work?
    Answer. Thank you for the questions. Since the programs in question 
are overseen by our Department of Labor and Regulation, I requested 
their support in drafting an answer. In short, the answer to your 
question is yes. With a 2.8 percent seasonally adjusted unemployment 
rate in February 2017, most South Dakotans looking for work are in need 
of support services to succeed. Many times they do not have only one 
barrier to employment; they have several barriers preventing them from 
becoming employed.
    To support individuals who may need training, one of the resources 
South Dakota uses is the Workforce Innovation and Opportunity Act 
(WIOA) Title I program. Eligible adults and dislocated workers are case 
managed and can utilize Title I for retraining (tuition and book 
assistance or on-the-job training (OJT)) with some wrap-around services 
being provided. Assistance includes, but is not limited to: child care, 
transportation costs, car repairs, housing, work attire, and medical 
expenses related to the training and/or job. Such expenses may 
otherwise deter them from completing training.
    South Dakota has seen success in the training programs it has 
available. Some of that success has come from not only additional 
training at technical institutes, but also with OJTs for individuals 
who may not be able to return to school, but need immediate employment.
    Real life successes of support services are found in four 
testimonials at: https://www.youtube.com/watch?v=ieeazt43SGo. (There 
are also separate vignettes on our YouTube page of each.)
    DLR's PY15 WIOA Annual Report also shows many success stories: 
http://dlr.sd.gov/workforce_services/wioa/documents/
wioa_annual_report_2015.pdf
    I want to acknowledge Dawn Dovre's assistance in the development of 
these two responses. Dawn is with the SD DLR.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Catherine Cortez Masto 
                       to Colonel Michael Cartney
    Question 1. One of the largest barriers of expanding technical 
education program is the recruitment of teachers. What strategies does 
Lake Area Technical Institute use to recruit educators? What can be 
done in order to better incentivize teachers to move from industry to 
education?
    Answer. Thank you for the questions. Recruiting and retaining 
qualified instructors at Lake Area Tech is at the very core of our 
mission and student success. Without a remarkable group of instructors, 
our students would not be effectively prepared for a satisfying career 
the workforce.
    One basic question for career and technical education programming 
is do you hire a teacher and provide the relevant industry experience, 
or do you hire someone from industry, and teach them how to be an 
instructor? Lake Area Tech hires industry experienced personnel and 
employed an extensive development and mentoring program to ensure high 
quality educational experiences, Doing so does place the college in 
direct competition with industry for those key people.
    Fortunately, the South Dakota Legislature, through a bi-partisan 
legislative effort, put in place an Instructor Salary Industry 
Adjustment program. Codified in the 2016 legislative session, a half 
penny sales tax enables South Dakota's technical institutes to offer 
compensation competitive with industry on a per day basis.
    Recruiting remains a challenge for us at times since the caliber of 
instructors we look for is high. By the nature of our mission, we are 
also seeking those individuals in industries where they are in 
extremely high demand. Despite these challenges, we have had success 
with our recruitment efforts, but not all colleges have fared so well. 
Across the Nation there is a notable shortage of people entering the 
teaching profession. Taking the next step of convincing people to move 
from a successful industry career to teaching at a technology college 
requires a close relationship with industry, and innovative solutions.
    Some innovations we have tried or seen used include: (1) industry 
partners who have key people teach as part of the employment, (2) 
industry partners stepping forward to provide funding so colleges can 
pay competitive salaries, and (3) industry partnership where personnel 
teach \3/4\ of the year but return to the employer for the remainder of 
the year--giving them full time employment and compensation.
    Finally, what can be done at the Federal level to support Technical 
Education? Technical education is expensive, and institutional funding 
from the Federal Government is vital. However, Federal financial aid 
for students is also crucial, and is often the turning factor in 
whether someone even seeks higher education. However, the financial aid 
system can be extremely hard to navigate and use if you do not go from 
high school to college. One example would be we need to change the 
rules for Federal financial aid to allow someone leaving a four-year 
school, after absorbing 2 or 3 years of Federal PELL and loans, to go 
to a technical school and still have the 2 or 3 years of financial aid 
support required to get a technical degree or retrain. This law was 
changed approximately 4 years ago. Other innovative ideas could include 
tax incentives for employers who allow their employees time to 
accomplish their education, tax credit to working graduates for paying 
their student loans back, and easing the access to educational benefits 
due to our nations veterans'.

    Question 2. Another important gap that exists in the technical 
education arena is the lack of education, and understanding, among 
counselors and parents about the opportunities, careers, and 
educational training that exists for technical and vocational fields. 
What steps can be taken to eliminate these gaps, and how can we better 
provide information about the technical opportunities that exist for 
students to counselors, parents, and the students themselves?
    Answer. You are 100 percent correct. How a community values an 
occupation is a perception that needs to be addressed by industry as 
well as education. Often, the first step is exposure to prospective 
students and the families, of the career and its benefits. We are not 
going to attract students to the high demand industries if they do not 
even know what they are. Industry plays a key role in imaging, and 
often re-imaging, their industry. Many parents do not realize how most 
work environments have evolved significantly in the past 30 years, but 
someone not in that industry will be unaware of the changes if someone 
is not out proactively informing the community. National campaigns, 
such as General Electric's recent series of commercials, can be strong 
influences in getting potential students interested in technical 
careers, and thus technical education. If industries and educational 
communities together raise the awareness of an occupation's value, it 
will make those seeking and entering that occupation feel valued.
    High school counsellors play a crucial role in guiding students, 
and parents, through career options. But in most states, K12 
counsellors are required to have a four-year degree, therefore their 
perspective is often towards their own experiences. Nationally there is 
a shortage of counsellors in the K12 system, so those available spend 
the majority of their time dealing with mental health issues of the 
students. Lake Area Tech has encouraged school systems to opening their 
doors to industry and technical colleges by allowing our instructors 
and industry representatives to teach science lessons and other classes 
related to their occupations. South Dakota's Department of Education 
has deployed a system called SDMyLife across our entire K12 spectrum. 
SDMyLife is an online program assisting students with navigating the 
career development process. SDMyLife's goal is to help students better 
understand themselves and how their interest, skills, and knowledge 
relate to real-world academic and career opportunities. Additionally, 
SDMyLife provides ways for colleges and industries to provide 
information and engage students interested in specific career paths.
    With the shortage of counsellors, Lake Area Tech emphasizes our K14 
approach to education and uses several approaches to expose students to 
technical careers. We seek every opportunity to advocate for and engage 
in career oriented discussions with the public.
    Our staff does an incredible job reaching out to them as early as 
third grade. We believe that getting potential students on campus is an 
important first step in educating them on everything our technical 
college has to offer. Throughout the year, we invite grade school, 
middle school, and high school students to Lake Area Tech for 
activities that combine having fun and being educated. Third graders 
tour select programs during our annual 3rd Grade College for a Day, 
sixth graders are invited annually for Ag Day at the Farm, eighth 
graders attend the annual Men/Women in Science Day, sophomores 
participate in Equity Day, juniors attend Junior Tech Day, and seniors 
attend Senior Tech Day. In all cases, either teachers, parents, and/or 
school counselors are along and gain valuable knowledge of our programs 
of interest.
    We also hold school district in-services for local K-12 teachers 
and counselors on campus. This gives them first-hand knowledge of our 
facilities and familiarizes them with faculty and services.
    Dual credit classes are also held on-campus for area high 
schoolers, providing yet another opportunity for exposure and 
education. The program is highly success. Last semester we provided 
more than 1,000 credit hours to high school students.
    We put our fair share of miles on, too. Our admissions 
representatives travel extensively throughout the regions visiting high 
schools and participating in college and career fairs. These visits are 
valuable as they not only focus on educating the students, but just as 
importantly, the school counselors and teachers.
    In addition to personal, face-to-face educational encounters, we 
market our successful graduation, retention, and placement rates 
through focused marketing efforts including billboards, TV commercials, 
radio ads, Internet ads, and mass mailings. These efforts promote top 
of mind awareness to potential students, parents, industry members, and 
community members.
    Lake Area Tech is always willing to share best practices and talk 
through specific issues at any time with your educational, industry, or 
government stakeholders on this topic. We can be reached through 
www.lakeareatech.edu.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Tammy Baldwin to 
                           John J. Neely III
    Question. President Trump has promised to bring manufacturing jobs 
back to the U.S., but his budget proposal would defund the 
Manufacturing Extension Partnership (MEP), which has been instrumental 
in enhancing the success of Wisconsin's small to midsize manufacturers. 
According to the Center for American Progress (CAP), eliminating 
Federal funding for MEP would cost Wisconsin 846 jobs and would cost 
the United States 41,190 jobs. The President's budget would also 
eliminate funding for the Economic Development Administration, which 
supports development in economically distressed areas of the United 
States. In 2015, fiscal investments by EDA were over $2.9 million in 
Wisconsin and over $213 million in the United States. I'd like to 
address this question to the two witnesses from manufacturing firms, 
Mr. Neely and Ms. Marks: I'm concerned that the President's budget is 
breaking the promises he made to our Nation's manufacturers and tilting 
the playing field further against them. How will the elimination of the 
MEP program impact your companies and their suppliers, many of whom are 
small and medium enterprises?
    Answer. Gulfstream recognizes that the Manufacturing Extension 
Partnership (MEP) has been a valuable resource for small and mid-size 
businesses. As a public-private partnership that receives approximately 
one-third of its funding from the Federal Government, and the balance 
from a combination of state/local governments, private enterprises and 
client fees, the loss of Federal funding likely will provide 
challenges. Similarly, the U.S. Department of Commerce's Economic 
Development Administration (EDA) has provided grants and other 
assistance for U.S. businesses, and the de-funding of EDA would provide 
an additional challenge.
    Gulfstream's experience, however, is that governments in Wisconsin 
and the other states in which we do business have become significantly 
more committed over the last several years to supporting workforce 
development and economic development. As discussed several times in 
this hearing, for example, many states have highly effective programs 
available to small and mid-size companies through various state 
agencies and in particular technical colleges. Wisconsin's Department 
of Workforce Development, and job training grants available through 
Wisconsin's state government, certainly illustrate this point.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maggie Hassan to 
                           John J. Neely III
    Question 1. New Hampshire receives $6 million from the U.S. 
Department of Labor under the Workforce Innovation and Opportunity Act 
(WIOA). As you likely know, the President's budget blueprint proposes 
cutting 21 percent of the Department of Labor's budget and states that 
the budget, ``Decreases Federal support for job training and employment 
service formula grants, shifting more responsibility for funding these 
services to states, localities, and employers.'' One thing these funds 
go toward is workforce training and education in high-demand fields, 
including WorkReadyNH which is a collaboration between state agencies 
to ensure our workers have both basic skills and softskills when 
entering or re-entering the workforce. With the health care sector 
projected to increase by 14 percent between 2016 and 2021, and the IT 
sector with a projected growth of 15 percent over the same period, job 
training and education opportunities in these sectors, and others will 
be essential. What do these proposed cuts mean to the ability of 
companies like yours to find the workforce they need?
    Answer. Workforce Innovation and Opportunity Act (WIOA) funding has 
helped support a number of programs in the states in which Gulfstream 
does business. As noted in response to other questions, however, an 
offset to a decrease in WIOA funding is the increased understanding on 
the part of state governments concerning the need for, and return on 
investment from, state-funded workforce development programs. This 
increased understanding at the state level is having a corresponding, 
positive impact on state funding. For example, we certainly have been 
impressed by the quality of training provided by states' technical 
college systems.

    Question 2. What I hear most from business leaders in New Hampshire 
is that they do not have access to a skilled workforce. With the lowest 
unemployment rate in the country at 2.7 percent--it is essential to not 
only work with dislocated workers, but to support individuals in re-
joining the labor market and train individuals who are underemployed. 
Organizations, like Families in Transition NH, have had a lot of 
success lifting individuals out of poverty by providing wrap-around 
supports, like affordable housing options, child care, job-training and 
case management. As we talk about the importance of supporting and 
improving job training programs, do you think it is important to 
provide wrap-around services? Have you seen the impact of these kinds 
of programs in your work?
    Answer. Gulfstream, indeed, has seen the value of resources through 
which individuals can obtain re-training, whether to move from older to 
newer technologies, across industries or simply to address basic 
underemployment. Wrap-around services, like child care and 
transportation from home to training (at technical colleges, for 
example) and work, are important in making job-training opportunities a 
practical reality rather than simply a theoretical opportunity.
                                 ______
                                 
 Response to Written Question Submitted by Hon. Catherine Cortez Masto 
                          to John J. Neely III
    Question. How successful do you think our public schools are with 
ensuring that students are exposed to fields involving technical skills 
throughout their education?
    Answer. Over the past several years, we've seen a shift in the K-12 
environment to include technical job training and opportunities as 
viable career gateways for students. Not everyone is ideally suited for 
a four-year degree, so it's important to explore and explain 
alternative career paths. As noted in my opening remarks, the good news 
is that we are seeing this happen. In every state in which Gulfstream 
does business, the state and local leaders understand this concept and 
are making great strides to expand it. As an example, we have seen a 
significant increase in the number of high schools with sophisticated 
technical curricula and equipment dedicated to training for technical 
trade skills.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Tammy Baldwin to 
                              Judith Marks
    Question. President Trump has promised to bring manufacturing jobs 
back to the U.S., but his budget proposal would defund the 
Manufacturing Extension Partnership (MEP), which has been instrumental 
in enhancing the success of Wisconsin's small to midsize manufacturers. 
According to the Center for American Progress (CAP), eliminating 
Federal funding for MEP would cost Wisconsin 846 jobs and would cost 
the United States 41,190 jobs. The President's budget would also 
eliminate funding for the Economic Development Administration, which 
supports development in economically distressed areas of the United 
States. In 2015, fiscal investments by EDA were over $2.9 million in 
Wisconsin and over $213 million in the United States. I'd like to 
address this question to the two witnesses from manufacturing firms, 
Mr. Neely and Ms. Marks: I'm concerned that the President's budget is 
breaking the promises he made to our Nation's manufacturers and tilting 
the playing field further against them. How will the elimination of the 
MEP program impact your companies and their suppliers, many of whom are 
small and medium enterprises?
    Answer. Siemens has historically partnered with MEPs in the past on 
identifying critical workforce needs for manufacturers and teaching 
others about the value of manufacturing through national manufacturing 
day. We understand the value of these partnerships that focus on 
supporting manufacturers at a local level and believe that thoughtful 
consideration about the future of these MEPs is necessary. Please know 
that we are available to provide guidance to your office about this 
important topic.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maggie Hassan to 
                              Judith Marks
    Question 1. Last year, Siemens Foundation funded a technical 
assistance grant through the National Governors Association to assist 
states, including New Hampshire, in scaling work-based learning 
opportunities to better prepare youth for middle-skill STEM careers. 
With labor market experts estimating that by 2020, the middle-skill 
labor force will account for 65 percent of all jobs, these are 
important initiatives to meet workforce demands. Some examples of Work-
Based Leaning are Career and Technical Education Programs, internship 
opportunities, apprenticeship and even job shadowing and mentorship. 
These opportunities help to ensure that our young people are better 
prepared for the workforce by learning through actual work experience. 
In NH, a team working on this effort has set a goal for every student 
to have access to a work-based learning opportunity by 2020. Ms. Marks, 
Siemens has led the way in providing these types of opportunities and 
has funded efforts to expand them around the country. What advice do 
you have for other companies looking to do the same and how do you 
think the Federal Government can better incentivize corporate actors to 
play a larger role in building our STEM workforce?
    Answer. As a leader in industry and workforce development, Siemens' 
experiences speak to the challenges that employers face developing 
talent pipelines in the United States. Whether looking for skilled 
workers to fill internal positions, hearing similar concerns from its 
customers across the country and industry sectors, or addressing 
broader societal needs for youth employment and educational attainment 
through its philanthropic efforts, Siemens' experiences offer clear 
lessons for leaders who want to eliminate barriers for employers. Let 
me highlight some of those lessons, how Siemens is supporting 
scalability, and ideas on how the government can assist the private 
sector in addressing skill challenges.
Supporting Industry-centric Training and Partnerships with Community 
        Colleges
    Programs across Siemens businesses, including Siemens Cooperates 
with Education, Siemens Mechatronic Systems Certification Program, and 
the Global Opportunities PLM Academic Program, invest in developing a 
skilled labor market for customer communities across the country by 
providing curriculum, software and train-the-trainer instruction. From 
a philanthropic perspective, the Siemens Foundation is advancing 
excellence in community colleges, the major provider of technical 
skills training in the U.S., by supporting the Aspen Prize for 
Community College Excellence. Each of these projects advances industry-
centric training and work in partnership with public sector education 
leaders and institutions in K-12, community colleges, and workforce 
systems.
Scaling Apprenticeships and Work-based Learning
    Siemens is dedicated to expanding registered apprenticeships and 
other high-quality work-based learning models in the U.S. because we 
have witnessed and benefitted from those models throughout our history 
in Germany. In 2015, Siemens partnered with Dow, Alcoa, and the 
National Association of Manufacturers to publish the first ``how-to 
guide,'' called the Playbook, for manufacturers interested in adopting 
the apprenticeship model. Siemens is committed to sharing the value of 
apprenticeships with other employers in the U.S. As a company, Siemens 
participates in a public-private partnership in the American 
Apprenticeship Initiative (AAI), the largest Federal investment ever 
made to expand apprenticeships in the U.S. The Siemens Foundation is 
also working with AAI and the National Governors Association's (NGA) 
Center for Best Practices to help all AAI partners succeed. The 
Foundation is advancing thought leadership on apprenticeships in the 
U.S. by sponsoring the first ever national conference on 
apprenticeships--Apprenticeship Forward. The Foundation is also 
advancing work-based learning by working through the NGA with top state 
leadership to embed effective models in state education systems.
Expanding Awareness about Quality STEM Skilled Careers
    Across its business and philanthropic efforts, Siemens is 
addressing a stigma sometimes associated with middle-skill, technical 
or skilled careers, or the educational pathways necessary for these 
jobs. The Siemens Foundation, in partnership with the Aspen Institute, 
promotes the substantial economic opportunities available through STEM 
middle-skill jobs through the stories of Siemens Technical Scholars, 
outstanding community college students and graduates pursuing STEM 
technical careers. Through a partnership with Advance CTE, the 
Foundation is identifying and disseminating best practices for 
messaging that attracts students and parents to try career technical 
education during the high school experience. Through stories like that 
of Hope Johnson, Siemens is promoting the value of registered 
apprenticeships to peers.
Policy Ideas
    Through these experiences and more, Siemens has learned much about 
the challenges many face in finding workers with the right skills. The 
following recommendations may be useful in addressing those challenges 
by government:

   Identify and support quality community colleges interested 
        in integrating academic and industry-centric education that 
        meet labor market demand and employer talent needs; support 
        students pursuing these educational pathways through student 
        aid;

   Expand registered apprenticeship programs to more 
        industries, employers, community colleges and high schools;

   Develop a vibrant ecosystem of public and private partners 
        to make it easier to replicate registered apprenticeships;

   Incentivize employers to use registered apprenticeship 
        programs for their talent needs and support their 
        implementation requirements;

   Promote the value of family-supporting careers obtained 
        through two year degrees, industry certifications or by 
        completing a registered apprenticeship

    Question 2. New Hampshire receives $6 million from the U.S. 
Department of Labor under the Workforce Innovation and Opportunity Act 
(WIOA). As you likely know, the President's budget blueprint proposes 
cutting 21 percent of the Department of Labor's budget and states that 
the budget, ``Decreases Federal support for job training and employment 
service formula grants, shifting more responsibility for funding these 
services to states, localities, and employers.'' One thing these funds 
go toward is workforce training and education in high-demand fields, 
including WorkReadyNH which is a collaboration between state agencies 
to ensure our workers have both basic skills and softskills when 
entering or re-entering the workforce. With the health care sector 
projected to increase by 14 percent between 2016 and 2021, and the IT 
sector with a projected growth of 15 percent over the same period, job 
training and education opportunities in these sectors, and others will 
be essential. What do these proposed cuts mean to the ability of 
companies like yours to find the workforce they need?
    Answer. As you may know, Siemens has been a large supporter of 
policies that support public and private partnerships at the state and 
local level helping make strategic investment decisions for workforce 
developments like Workforce Innovation and Opportunity Act (WIOA) as a 
company and through our associations. It is important that government 
leaders at all levels support this work through funding and supportive 
policies. We stand at the ready to provide guidance as this debate 
progresses.

    Question 3. What I hear most from business leaders in New Hampshire 
is that they do not have access to a skilled workforce. With the lowest 
unemployment rate in the country at 2.7 percent--it is essential to not 
only work with dislocated workers, but to support individuals in re-
joining the labor market and train individuals who are underemployed. 
Organizations, like Families in Transition NH, have had a lot of 
success lifting individuals out of poverty by providing wrap-around 
supports, like affordable housing options, child care, job-training and 
case management. As we talk about the importance of supporting and 
improving job training programs, do you think it is important to 
provide wrap-around services? Have you seen the impact of these kinds 
of programs in your work?
    Answer. Allow me address the question from the training perspective 
and focused on advanced manufacturing, as that is the area where we 
have experience. First let me reiterate what I said in my testimony, 
and that is that at Siemens we pride ourselves on conducting business 
locally, especially here in the United States. At our core, we are a 
company that combines innovation with social responsibility. We believe 
our mission extends beyond our customers, our employees, and our 
shareholders. We believe we must also deliver lasting value to the 
communities we serve. We believe it is important to deliver this value 
through our commitment to helping the U.S. establish a new era of 
advanced manufacturing, central to which are our efforts to build a 
skilled workforce. The skill requirements, admittedly, have become much 
more rigorous, and Siemens has both a business need and a 
responsibility to help workers acquire these new, advanced skills. 
Therefore, Siemens' workforce development efforts are addressing the 
jobs of today as well as tomorrow. Our strategy is focused on workers 
at all stages of their careers, from new entrants into the workforce to 
dislocated workers seeking to re-enter, to current employees in need of 
re-skilling. We call this industrial reskilling.
    As an example, Siemens is a strong supporter of hiring Veterans. In 
fact, since 2011, Siemens has hired over 2,500 veterans. Continuing our 
strong support for hiring veterans, we recently committed to hiring a 
minimum of 300 U.S. military veterans per year for the next three 
years, providing them with additional skills training to make them 
successful at performing roles at Siemens' various U.S. facilities. We 
also invest approximately $50 million annually for the training and 
continuing education of our own U.S. workforce. Additionally, we are 
helping to build a new ecosystem of public and private sector 
partnerships that forge pathways to 21st century manufacturing skills 
and to economic security.
                                 ______
                                 
 Response to Written Question Submitted by Hon. Catherine Cortez Masto 
                            to Judith Marks
    Question. According to the Census Bureau's American Community 
Survey, women make up 48 percent of the workforce, but only 24 percent 
of STEM workers. What do you see as the largest barriers for women 
interested in pursuing STEM education or careers? What steps do you 
think we should be taking to eliminate these barriers?
    Answer. At Siemens, we are working hard to bring awareness, 
confidence and skills to girls and women in the field of STEM. We do 
this through Siemens USA and through our Siemens Foundation. Let me 
share with you two specific examples; one that shows our work in K-12 
and another that focuses on ``middle skills''.
    The first is what we used to call Siemens Science Day that I 
referenced during my testimony. We now call it Siemens STEM Day 
(www.siemensstemday.com) and it provides tools for students from their 
first experiences with problem solving, experimentation, and the 
scientific method, all the way through to an advanced understanding of 
STEM principles. This online platform enables parents and teachers to 
engage students (K-12) in STEM through tools, resources, and hands-on 
activities. The materials emphasize the importance of STEM through 
standards-aligned, fun and engaging hands-on classroom activities and 
videos designed to support the development of students' ability to 
investigate, question and understand how the world works within STEM 
principles. We believe this helps to increase both interest and 
confidence for girls in the STEM field.
    A second example is the Siemens Foundation's STEM Middle-Skill 
Initiatives. ``Middle-skill'' jobs are essential to the United States' 
economic growth and provide promising career opportunities. In order to 
help close the opportunity gap for young adults in STEM middle-skill 
careers, the Siemens Foundation launched a workforce development 
program, leveraging the experience and expertise of Siemens as an 
industry leader and pioneer in workforce development. One of their 
projects with the Aspen Institute's College Excellence Program, Siemens 
Technical Scholars, identifies outstanding young adults overcoming 
barriers and achieving success in excellent two year STEM programs at 
community colleges in advanced manufacturing, energy, health care and 
information technology. Many of these students serve as the voice and 
face of the economic opportunities available in STEM technical careers 
in videos we share to educate their peers about these opportunities and 
the postsecondary education and training options available to achieve 
them. This past year, I was honored to meet a young woman from New 
Mexico name Chelsea Hartshorn who was named a Siemens Technical 
Scholar. Not only is she a terrific student and a wonderful mother to 
two young boys, but Chelsea has become a leader in her community 
educating other women about the opportunities available in careers like 
the one she's pursuing in solar panel installation by proudly sharing 
her story. Chelsea is just one of many outstanding young women we have 
met through the Siemens Technical Scholars program. Having them tell 
their stories to other young women is a powerful tool to encourage more 
women to step confidently into STEM careers.

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