Overcoming Obstacles

Contemporary society is riddled with ever-changing, complex challenges deeply impacting industries across the board. The manufacturing and energy industries, while essential to West Virginia’s economic wellness, often find themselves affected by these issues and questioning how to not only overcome them but also thrive in the midst of seemingly detrimental factors; one of these factors being a debilitating workforce shortage.

Spanning most industries, the workforce shortage has become a crippling obstacle for organizations to overcome, and there appears to be no simple solution. The manufacturing and energy industries are no exception—attracting and retaining employees remains problematic, which poses a large threat to these businesses.

“It is difficult to maintain current operations and grow when qualified employee shortages prevent operating at full capacity,” says Rebecca McPhail, president of the West Virginia Manufacturers Association (WVMA).

An organization’s inability to operate at full capacity proves detrimental, and today, that is the reality many organizations face because of the workforce shortage, creating not only hardship for the individual organization but also ripple effects on the rest of the nation.

“Low unemployment and worker scarcity create a need to increase wages and an overall higher cost of doing business,” says McPhail. “In some sectors, this leads to higher consumer pricing, but in a global economy where margins matter in maintaining a competitive edge, manufacturers can’t simply pass on such cost increases. In addition to wages, manufacturers are navigating increased transportation and energy costs.”

Manufacturers are forced to eat the cost or feel the pushback from the global economy. Similar to manufacturing, the coal industry sees both direct and ripple effects of the challenging lack of workers.

“The workforce shortage hinders coal’s ability to respond to marketing opportunities, and consequently, it affects a company’s viability and future growth. It also prevents the state from securing additional tax collections and economic gains. Coal could be every bit as much of our state’s future as it’s been in the past,” says Chris Hamilton, president of the West Virginia Coal Association. “For every mining job, there are an additional four to five jobs created within the broader economy. In total, there are as many as 850 mine specialty companies registered to work at mining operations around the state, which account for more than 50,000 state jobs. These include mine contractors, machinists and equipment repair, equipment manufacturers, engineering and technical, mine reclamation and so on.”

As one of West Virginia’s largest industry-wide tribulations, many entities within the state are facing this challenge head on and working to combat the workforce shortage in innovative ways. One way this problem is being targeted is through education.

The WVMA founded the West Virginia Manufacturers Association Educational Fund, Inc., which takes a hands-on approach to building the talent pipeline for the manufacturing industry in the state.

According to McPhail, the organization launched its Explore the New Manufacturing program in 2015 with a mission to educate others on career opportunities within manufacturing along with educational and training pathways available in the pursuit of manufacturing careers. This program involves working with middle and high school students and connecting them with local manufacturers to promote learning.

Building young students’ awareness about the diversity of career options within manufacturing is the first step to inspiring a new generation of workers to consider this industry as a career path. The Gas and Oil Association of West Virginia, Inc. (GO-WV), is similarly using education as a tool to grow its industry’s workforce.

“In addition to the work our members do with area technical colleges and other workforce development and job training initiatives, GO-WV holds various education programs and STEM teacher workshops, so students are exposed to the many career opportunities in the oil and natural gas industry—many of which do not require a typical four-year degree,” says Charlie Burd, executive director of GO-WV.

While introducing the state’s youth to the manufacturing and energy industries is essential, it is also important to focus on higher education.

“Companies are partnering with our community and technical college system to develop programs that focus on high-demand skills and offer opportunities to receive on-the-job training while pursuing degrees or credentialing,” McPhail says.

Beyond education, organizations are actively working to recruit and retain their workforce. Some are looking to their own communities to utilize grassroots style tactics to employ new members to the workforce. One example of this is Mountaintop Beverage, a manufacturing facility in Morgantown, WV. When Mylan—now Viatris—closed its West Virgina facility in 2020, many well-educated and motivated workers were left without jobs. Mountaintop Beverage looked at this as an opportunity to employ qualified workers; a win-win for both the establishment and its employees.

“Mountaintop has been fortunate to assemble a diverse team that has strong knowledge and industry experience. Specifically, the ex-Viatris team members bring transferable skills and relevant experience with respect to good manufacturing practices, a strong foundation required for any worker in the beverage manufacturing space,” says Beth Pratt, chief people officer at Mountaintop Beverage. “We see our business as much more than a beverage manufacturing facility. Mountaintop Beverage’s vision is ‘dedicated to better.’ We believe this business will better diversify the regional economy by providing steady, gainful careers in beverage manufacturing, agriculture and supply chain.”

Mountaintop Beverage identified a need and worked to fulfill it to the benefit of both the company and its team.

Furthermore, according to McPhail, some organizations are offering signing or retention bonuses or increasing wages dramatically. Others are utilizing resources within the state.

“We are working with WorkForce West Virginia and the state’s Office of Miners’ Health Safety and Training to devise an industry wide and statewide worker recruitment and training strategy to respond to coal’s manpower needs,” Hamilton says.

WorkForce West Virginia is a powerful tool for combatting the labor shortage on a state level.

“West Virginia is leading the nation through the reorganizing, rebranding and repositioning of WorkForce West Virginia as an employment and upskilling focused agency, as well as the entity that provides a safety net for those in job transition,” says James Bailey, cabinet secretary at the West Virginia Department of Commerce. “WorkForce West Virginia has recently launched programs that better serve job seekers, including those in recovery, to develop new skills and find a pathway to re-entering the workforce. WorkForce West Virginia has unveiled a program that assists employers facing market downturns, which provides alternatives to layoffs and downsizing so that when the market returns there is a trained, viable workforce still in place. It has also become the leader in virtual job fairs, helping West Virginia employers recruit for open positions the first Wednesday of every month, utilizing a virtual job fair environment that has proven to connect hundreds of job seekers with hundreds of employers.”

There is an optimistic outlook for the workforce shortage challenge West Virginia faces, which has come with the hard work and dedication of a myriad of individuals and establishments.

“West Virginia is at a pivotal point. We must capitalize on opportunities as we address the workforce issues facing our state. We are doing this through the development of career pathways, creating public-private partnerships to provide job-specific training, instituting a ‘no wrong door’ policy for workforce resources and revolutionizing the general manner in which WorkForce West Virginia delivers services. This is imperative to ensuring that workers in West Virginia can maximize their career opportunities,” says Bailey.

As industries fight against the ongoing workforce shortage, another obstacle has become prominent: rail transportation. With higher rates and delayed shipments, the railroad networks have added an increased burden to manufacturers and energy producers. Moreover, the absence of railroad competition only further exacerbates the issue since railroads do not have competitive pressure to remain regulated, so they are slow to fix their rates and delays because the demand for their service stays the same. Chemours, a chemical manufacturing company in Belle, WV, has experienced this firsthand.

“Rail transportation is inflexible in terms of routings and delivery days, which constrains manufacturing sites and supply chains,” says Ashley Rine, integrated operations leader at Chemours. “In addition, there is too much variability currently in transit times, making it challenging to plan production, ensure on time delivery to customers and properly size a rail fleet. In addition, many manufacturing sites only have one rail carrier that can service them, which means these sites cannot be as competitive as sites that have the capability of being serviced by multiple rail carriers, allowing the site to negotiate the best rate. Finally, there is insufficient competitive pressure to regulate rail carrier rates, which is a challenge to being competitive in the marketplace.”

These kinds of challenges make it difficult for all manufacturers and energy producers in every step of their production.

“Chemours must have a competitive, cost-effective rail transportation network to provide important products to our customers to support the global economy,” Rine says. “Inconsistencies in transit, service delivery failures and rate increases make us less competitive than alternative sources. We hope to see positive changes in the rail industry, including legislation, that will make rail more viable in the future.”

These inconsistencies are proving detrimental to organizations throughout the state. According to Hamilton, rail service for the first quarter of 2023 has improved but remains problematic in many areas of the state.

According to the Bureau of Transportation Statistics, 54,539 train derailments occurred between 1990 and 2021, for an average of 1,704 per year, causing not only delays in delivery, but harm and damage to those communities.

Inflation only further amplifies the railway challenges, along with most other aspects of manufacturing or energy production.

“Like all businesses, the added costs associated with materials, products, labor and supply chain issues—to name but a few—directly affect operating budgets and the ability to hold down prices that eventually get passed on to the consumer,” Burd says.

Profit margins for many have reduced as the cost of doing business increases. While costs are increasing, the ability to continue operation often poses its own difficulties.

Another hindrance for manufacturing and energy is permitting.

“The coal industry requires predictable and stable permitting, which has improved greatly thanks to the efforts of industry and state regulators,” says Hamilton. “The remaining issues present when federal oversight agencies like the U.S. Fish and Wildlife Service complicate permitting at the very end of the process by failing to respond to permitting reviews. Additionally, the constantly changing requirements that are issued by the federal government, such as the ever-fluctuating Waters of the U.S. definitions and U.S. Fish and Wildlife Service permitting delays, continually frustrate permitting.”

Among other regulations posing permitting frustrations, pipeline regulations have made it increasingly problematic for West Virginia’s oil and gas industries to transfer its products.

“The onslaught of appeals, challenges and lawsuits have dramatically increased. The fossil fuel industry is under attack every day. Moving oil, natural gas and associated liquids by pipeline has been demonstrated as safe, reliable, environmentally friendly and cost effective,” says Burd. “Thousands of everyday, common products are made from the use of the natural gas, oil and associated liquids we produce. We need commonsense intervention on the construction of pipeline and manufacturing facilities that make gasoline and millions of other products needed by all Americans.”

While hurdles are seemingly everywhere, these industries are doing their best to jump over barriers and find success in spite of the challenges faced. When one West Virginia business thrives, the entire state reaps the benefits.