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SVHEC nets millions for jobs initiative / May 26, 2014
The Southern Virginia Higher Education Center will become home to a Center of Excellence for advanced manufacturing, the newest push in the ongoing quest to restore the industrial base of Southside and Southwest Virginia.

The Centers of Excellence initiative — which also includes the New College Institute in Martinsville and a yet-to-be selected location in southwest Virginia — is intended to address a shortfall of medium-skill workers that one consulting group foresees developing in the region over the next 20 years.

The initiative is being funded by the Virginia Tobacco Commission, which on Thursday awarded $2 million start-up grants to the SVHEC and the New College Institute. The grant awards represent a downpayment on an undertaking that is expected to cost around $20 million during start-up, and $3.3 million annually to operate.

“This is extremely important to us,” said John Cannon of South Boston, a board member of the Tobacco Commission and the SVHEC, and chairman of the Halifax County Industrial Development Authority.

Cannon said having the Center of Excellence in town will “bring business prospects from all across the country when they realize that we have the ability to train the work force they need.

“We’ve [the Tobacco Commission] been working on this for the past three years,” he said.

The three Centers of Excellence will focus on training workers in three fields — welding, precision machining and industrial machine maintenance — where the vast majority of medium-skill manufacturing jobs of the future are expected to materialize.

According to the Boston Consulting Group, which developed the Centers of Excellence initiative, Southside and Southwest could witness up to 6,840 manufacturing job openings by 2017, of which more than a quarter would be medium-skilled positions — mostly for mechanics, welders, traditional and CNC machinists, and tool and die makers.

To fill the need, the region will need to boost its supply of medium-skilled workers by 1,045 by 2017, according to the Boston Consulting Group study.

Underlying the 6,840 job estimate is the assumption that Southside and Southwest will recruit two major manufacturers within the next two years, creating demand for 1,700 new jobs by 2017. In arguing for a regional “cluster” of advanced manufacturing centers, a 2012 Boston Consulting Group study cited the experience of the Tuscaloosa-Decatur region of Alabama, which lured automaker Mercedes-Benz in 1994 and gained 1,500 jobs and $300 million in new investment as a result.

In Virginia, a potential foundation for the Centers of Excellence cluster is the aerospace industry. Tobacco Commission officials hope Southside and Southwest will become a supply chain region for the Rolls-Royce aerospace complex in Prince George, where the British-based firm makes advanced aero engine components for commercial and military aircraft.

In calling for creation of the Centers of Excellence, the Tobacco Commission is following the lead of the Commonwealth Center for Advanced Manufacturing, situated at Rolls-Royce’s Crosspointe campus. The CCAM was established not only to help Rolls-Royce handle its workforce needs, but also to train workers for supply chain companies and OEMs (original equipment manufacturers) that are expected to spring up in Virginia in Rolls-Royce’s wake.

An example is United Kingdom-based Kilgour Industries Ltd., which announced in January that it would establish a manufacturing operation in Martinsville, employing 155 workers. The company supplies aircraft airframes and engine machined products in aluminum, steel and titanium to major aerospace OEMs.

Dr. Betty Adams, executive director of the SVHEC, hailed the decision to create the Center for Manufacturing Excellence in South Boston, calling it “on par with the 1986 opening of our first location in the 500 square foot mobile unit on the high school grounds.

“The specialty training that will be provided at the Center of Excellence is not currently provided anywhere in the state,” said Adams. “We are breaking new ground that advances our region’s economic potential by equipping the workforce with high demand advanced technology skills.”

According to Tim Phohl, acting executive director of the Tobacco Commission, the SVHEC put in a request for $4.8 million to fund the first three years of the program. In approving the initial $2 million grant, the Tobacco Commission signaled that more funding would be forthcoming over the next three years.

Each of the three Centers, including the one at the SVHEC, is expected to take in around 70-75 students a year to train in the fields of welding, precision machining and industrial machine maintenance.

Prospective students will come out of high school dual enrollment programs, colleges and existing job training programs — as well as from the ranks of the unemployed and underemployed, according to the consultants’ study.

Much of the instruction locally will be provided by SVHEC’s community college partners, Danville Community College and Southside Virginia Community College, which specialize in precision machining and welding, respectively.

Formally dubbed the Southern Virginia Center of Manufacturing Excellence, the new program will serve Halifax County and 10 other counties in Southside, from Pittsylvania to Cumberland to Greensville, using a “distributed” model of education that includes on-line learning and existing community college assets.

“Once again our community college partners DCC and SVCC are joining forces with us to provide unprecedented access to education,” said Adams.

The consultants’ study touches on existing job training and community college programs in advanced manufacturing but notes that Virginia’s technical education system, though containing “many strong elements,” is “hindered by a lack of coordination across individual schools.”

The study notes the most significant gaps exist in “facilities and capacity” and cites several problems with the lack of a standard program offering or curriculum, wide variations in the composition of different machining programs, and inadequate lab facilities with outdated equipment.

Without a “cluster” approach to advanced manufacturing, the Boston Consulting Group foresees a slow decline in manufacturing jobs across the two regions. By developing a cluster, Southside and Southwest could gain up to 4,200 jobs over and above the baseline number of 2,640 openings that are expected through retirements and predicted growth.

The two numbers account for the firm’s prediction of 7,840 manufacturing job openings by 2017.

Boston Consulting Group further predicts that nearly 6 in 10 of those job openings will be filled by low-skilled workers, while high-skilled workers (primarily college degree holders and persons with experience in the field) will number about 1,055. There is an ample supply of both types of workers to fill anticipated job openings, should the consultants’ projections of manufacturing growth by 2017 come to pass.

Of the remaining 1,985 medium-skilled workers who would be needed, Southside and Southwest are poised to supply 850 persons with the required training, leaving a shortfall of 1,045.

The consultants study suggests that 990 workers would be needed in the three areas that comprise the mission of the Centers of Excellence: welding, machining, and industrial machine mechanics.

In assessing the likelihood of different industrial sectors serving as the foundation for an advanced manufacturing sector in Southside and Southwest, the study rated aerospace “high” on the list, the auto industry as “low” and heavy machinery as “medium.”

The ratings match up with Virginia’s existing capabilities as outlined by the state’s Strategic Roadmap for job growth.

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