Tuesday 29 May 2012

A German model goes global

Apprenticeship - mixing classroom, practical training - gains popularity
By Chris Bryant, Published The Straits Times, 26 May 2012

MERCEDES-BENZ began building cars near Tuscaloosa, Alabama more than 15 years ago. Over time, US sales and the technological complexity of its vehicles accelerated but the company faced a bigger challenge: the supply of skilled labour did not keep pace and the German company feared driving headlong into a wall.

'Producing a Mercedes car is a hugely technical task in terms of the materials and process involved such as automation technology, laser welding and gluing,' says Mr Marcus Schaefer, chief executive of Mercedes-Benz US International.

'That ultimately requires high- quality trained people who can manage the technology in the plant. But there was a gap between what we could get from the labour market and what we needed in the plant.'

Mercedes-Benz decided to take matters into its own hands and set up an apprenticeship scheme based on the German dual system, which emphasises a combination of classroom training and hands-on technical experience in the factory. In January, 40 Alabama high school graduates began a seven-semester programme at the plant.

In Germany, apprentice schemes like this are the norm. About 60 per cent of the country's school leavers begin an apprenticeship, which lasts up to 31/2 years. About 570,000 trainees - or Azubis as they are known in Germany - started a dual programme in 2011.

The roots of Germany's vocational training stretch back to the Middle Ages and foreigners have often viewed the system as complex, rigid and antiquated. Children are streamed for technical education earlier than in Britain or the United States, for example, and join one of about 350 prescribed trades that range from baking to floristry and industrial mechanics.

But as the US jobless rate remains stubbornly high and peripheral euro zone economies confront youth unemployment rates of almost 50 per cent, the enduring strength of the German economy, its low youth unemployment and successful industrial model are drawing admiring glances.

'There's been an extraordinary rise in requests over the past three years from other countries asking how we can work together to implement elements of the dual training system,' says Mr Markus Milwa, acting director of iMove, a body that promotes practice-orientated vocational training on behalf of the ministry of education and research.

Others factors have also stirred interest in the system. The financial crisis has prompted a rethink of the balance between manufacturing and services in many countries such as Britain.

Meanwhile, as students in Western countries emerge from university with huge debts and dim job prospects, the ability of the German system to match young people's skills to those required by the labour market is seen as attractive.

'I'm totally convinced that following the worldwide economic crisis, other countries view Germany's low youth unemployment and its strongly performing industry as related to the German dual education system,' says Mr Milwa.

Fortunately, he adds, there is no need to journey to the country's industrial heartlands to probe the secrets of its dual system. Most major German industrial companies invest heavily in local production to serve foreign markets and these Brazilian, Chinese, Indian and American manufacturing plants require a steady supply of high-quality technicians. Many are implementing the dual system as they expand outside of Germany.

'Companies can't wait until the market is ready and the training infrastructure is there, so they are forced to set up their own infrastructure,' he says.

To do this requires adapting the German model to the local market. Siemens, the industrial conglomerate, recently began a dual system apprenticeship scheme at its gas and steam turbine plant in Charlotte, North Carolina. But first it had some explaining to do.

'If you went in front of a high school class and said: 'Who wants to be a machinist when they grow up?', those kids would look at you and say: 'What's a machinist?' ' explains Ms Pamela Howze, training manager at the plant.

'We're trying to change a mindset of kids (who have) thought their whole life that they were going to go away to college and get a four- year degree.'

Siemens is, therefore, giving tours of its factory to high school children and informing parents and guidance counsellors of the benefits of their training system.

'When you walk into our manufacturing facility, it's state of the art,' Ms Howze says. 'Everything in the factory is run by a computer, a robot or a laser - people don't think manufacturing is like that.'

Students who complete the programme stand to earn wages well above the regional average and, as in Germany, apprentices in Charlotte are paid an hourly rate while they train.

'They get paid to go to school, and they get paid when they're working here in the (factory) and they get paid when they are at the community college. That's a pretty lucrative deal for a young person,' she adds.

Carmaker Volkswagen aims to implement the dual system whenever it opens a new international car plant, although it tweaks the model. 'You have to adapt because each school system tends to be very different,' says Mr Ralph Linde, head of Volkswagen Coaching, the carmaker's training subsidiary.

Some of VW's trainees at its new plant at Chattanooga, Tennessee are 25 to 30 years old, compared with a typical starting age in Germany of 15 to 16.

Outside Germany, 'we tend to find either no training model or a 100 per cent school system. But we think the strength of the dual system is that you bring young people into the factory and training centres', he says.

German companies also seek to involve local partners, especially local colleges, both to help train the apprentices and to develop the curriculum.

Although these schemes require large investments, some of the financial burden is borne by local governments and the companies believe it is money well spent.

'Governments have understood these kinds of qualifications are a good investment for the future,' says Mr Linde. 'They understand that the quality of the technicians you train has a lot to do with the quality of products that you can produce.'

Many companies also find that creating an apprenticeship scheme can be cheaper than scouring the labour market for talent. Trainees tend to be more loyal and the programmes are also good for their corporate image. For example, US President Barack Obama singled out Siemens in his State of the Union address for shouldering the cost of taking on new trainees.

Of course, the German system is not perfect. Until recently the number of domestic apprenticeship places was in decline, some companies still struggle to recruit suitable candidates, and migrants have trouble finding a place.

But in Tuscaloosa, Mr Schaefer is trying to take the best aspects of the German system and make his Mercedes apprenticeship scheme even better. Another class of 40 'mechatronics' trainees is due to start later this year, as well as a group of 20 young automotive technicians.

'It's never been about finding cheaper labour,' he says. 'The focus has always been on high-tech processes, efficiency and quality output. That requires skilled people and so I think more and more companies will create their own apprenticeship programmes.'

Breaking down the dual system

● Training is provided on the job and in vocational training schools, combining theory and practice. An apprenticeship lasts for about three years.

● Requires close co-operation between companies, vocational schools, local governments, employer associations and trade unions, which develop the curriculum together. Obligations and duties are defined and set out in a training contract.

● Advantages for the trainee: gets paid whilst learning; high likelihood of obtaining a job at the end of the process.

● Advantages for the company: cheaper than scouring the labour market; trainees are taught the right skills for the business.

● Advantages for the state: lower youth unemployment; companies pay part of training costs, easing public budget constraints.

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