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Inside the i-cluster

The idea of manufacturers forming “industry clusters” suggests several synergistic possibilities—spatial and logistical efficiencies, say, or group purchasing discounts on common needs such as cleaning supplies.

Ask factory managers what they value most about cooperation among their peers, however, and the answer is more likely to be the I-word--as in Information.

“My job is to get my students ready for good-paying jobs,” said Juan DelCastillo, training center manager and head instructor of JARC’s 20-week CNC machining course, standing in front of a computerized machine tool called the Haas SL10 2-axis turning center. “It takes some technical training but also the ability to problem-solve, to make adjustments. And of course, they need basic work habits.”

John McCarron

Information about exporting opportunities, information about city and state tax incentives, information about workforce skills training—it’s the money- and time-saving stuff that a manager cannot find in a supplier’s catalogue. Or even on the Internet, which is loaded with programmatic detail … but woefully light on practical, “been there, done that” advice.

For that type of insider intelligence, believe it or not, it’s hard to beat places like the coffee and sweet-roll table at JARC. That would be the Jane Addams Resource Corp., an industrial support and training center on the 4200-block of North Ravenswood Avenue on Chicago’s North Side.

There, on a Wednesday morning last fall, a dozen or so manufacturing executives traded experiences working with various federal, state and municipal skills-training programs. And whenever questions arose, experts were standing by to decipher the alphabet soup of government training subsidies, programs and providers.

“We target strategic skills gaps in manufacturing and metal fabricating,” explained Guy Loudon, JARC’s executive director, in his introductory presentation. It was JARC’s turn to host one in a series of information workshops sponsored by the Alliance for Illinois Manufacturing. Other workshops last fall explained how to finance new export opportunities and how to protect intellectual property in a global marketplace where not everyone plays by U.S. rules.

Students in JARC's CNC training program--that's computerized numerical control--learn to become machine tool operators.

Courtesy JARC

A longtime partner and grantee of LISC/Chicago, JARC operates one of Chicago’s 12 LISC-supported Centers for Working Families (CWFs), offering job prep and placement services … as well as wealth-building skills for families looking to keep and save more of what they earn.

JARC is also one of the business assistance groups advising LISC/Chicago on a study—funded by the MacArthur Foundation—examining how best to coalesce area firms into “industry clusters” that draw productive advantage from their mutual proximity and connections.  

Help with paperwork

This particular gathering was about training subsidies, especially a relatively new program called the Employee Training Investment Program (ETIP) run by the Illinois Department of Commerce and Economic Opportunity. It’s a subsidy that will reimburse half the wages paid to a new, full-time hire during his or her first six months on the job. For small companies, with less than 50 employees, the wage subsidy can run up to 90 percent.

But there’s paperwork involved, and that’s where it really helps to have someone like Guy Loudon around, or even better in this case, someone like Manny Rodriguez, whose job it is to help Alliance members determine if they qualify … and if they do, help with the paperwork.

“Send me your job descriptions,” Rodriguez told the executives. “Let me know what positions you’re looking to hire, how many, the salary range … and we’ll bridge the gap, we’ll approach the program and see in advance if you qualify.  We’re not here to throw paper at you. … We’re providing this as a free service.”

Welding is another opportunity on JARC's menu of well-paying high-skilled manufacturing training. Although manufacturing overall is in decline, high-skilled jobs are often difficult to find qualified applicants for--and pay upward of $20 per hour.

Courtesy JARC

“Does this apply if you hire a temp?” asked Mary Allen of Graymills Corp., a North Side maker of industrial pumps.

“No,” said Rodriguez, “but you could use it to pay a temporary employee who you’re going to make permanent. … Is there paperwork? Yes. But we’ll help you navigate. Give us the bones; we’ll put meat on the bones. That’s our area of expertise.” 

Loudon jumped in with an encouragement. “This is a tremendous resource,” he said of the ETIP training subsidy. “Even if you hire someone with prior experience, there is a learning curve. They have to learn your specific manufacturing process. I used to be a machinist, and I can tell you that a new hire typically won’t add value for at least six months.”

Loudon suggested manufacturers hire graduates from JARC’s own manufacturing skills program and then apply for the subsidy for their first six months on the job.   JARC can even follow those hires into the workplace, he said, with a customized 90-day training program that will fully qualify them, for instance, as a CNC (computerized numerical control) machine tool operator.

Hands-on training     
Following presentations by Loudon, Rodriguez and David Hanson of the City Colleges of Chicago, the group got a quick tour of JARC’s fully equipped Training Center for the Metalworking Trades.

“My job is to get my students ready for good-paying jobs,” said Juan DelCastillo, training center manager and head instructor of JARC’s 20-week CNC machining course. He’s often able to place diligent students after just 10 weeks at the Training Center.

“You can’t have a guy running a $100,000 machine on blind luck.” DelCastillo said, standing in front of a Haas multiple-axis SL-10 turning center. “It takes some technical training but also the ability to problem-solve, to make adjustments. And of course, they need basic work habits. Our students are required to punch in on time every morning … just like they’ll do on the job. No fooling around.”

As a final exam, DelCastillo requires students to mill and drill a small plate of steel into a precisely crafted multi-surface, multi-hole engine part. The exam blueprint specifies tolerances no greater than .020 of an inch. 

In addition to operating one of LISC/Chicago's 12 Centers for Working Families, JARC has been working with LISC to build industry clusters that share best-practices information.

Jobs are here 
The Chicago area has good-paying manufacturing jobs available, pointed out Pam McDonough, who sat-in at the workshop. She is president and CEO of NORBIC, the sister organization of AIM, and a former senior state official in charge of economic development. 

“Every day, we have manufacturers calling and saying they want to hire two people, 20 people, even in this economy. …  It’s just that the specific skills aren’t readily available. So we need to work on this.”

The jobs data reinforce her point. Though factory employment has been declining for three decades, the Chicago region still produces more than $44 billion per year in manufactured goods. Although a great many low-skilled assembly jobs have migrated offshore, the Chicago region still has a high value-added sector that ranks among the world’s most productive on a per-worker basis.

Little wonder the average annual manufacturing wage here is well above $50,000, according to the “Industry Clusters” report produced by the Chicago Metropolitan Agency for Planning (CMAP) as part of its “Go To 2040” master plan. Or that a capable CNC operator/set-up machinist can make from $22- to $28-an-hour.

“We’re placing 100 percent of our graduates,” Loudon said, “and we’re beginning to place people at Borg-Warner, Siemens, Trelleborg—all world-class global manufacturers. So it’s very exciting for us.”

The challenge going forward, he said, is to expand the circle so more manufacturers are aware of available training programs, and educate public officials about the training pipeline so programs can be expanded … and not fall victim to government budget-cutting.

In other words, Chicago’s industrial cluster needs to keep pushing the i-word.

More information: JARC (773) 728-9769

AIM, (773) 594-9292,

Posted in Economic Development, Financial Opportunities


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