🔒Manufacturers urged to build early talent pipelines

Manufacturers in Maine will continue to face labor shortages unless they build early pipelines to engage future workers and keep young talent in the state, the head of the Manufacturers Association of Maine told a Mainebiz panel earlier this week. “We need to start reaching out to them in the fourth grade," said John Lewis, the group's executive director. "That’s what the data shows, in order to create that pipeline.” Lewis was one of five panelists at Wednesday's "Five on the Future" event, where state economist Amanda Rector was the keynote speaker and moderated the discussion. While hiring, tariffs and inflation were also addressed, manufacturing drew particular attention. “We’ll be graduating 11,000 high school seniors this year, which is not nearly enough to replace retiring workers," Lewis said. Ed McKersie, founder and president of ProSearch employment agency, said Maine’s labor shortage was one of his biggest concerns and with no large-scale hiring on the horizon. “I’m wildly bullish on Maine, but we need to do a better job with retention," he said. On housing, McKersie noted that shortages are a nationwide problem and not just in Maine. “But we’re not in dire straits compared to the rest of New England and the country," he said. "And we have a lot to sell about Maine. Our headwinds are not as strong as our tailwinds.” Lewis said he is starting to see more alignment with training and employer needs and foresees opportunities in the marine industries. He also pointed to growth in the defense sector, which is exempt from tariffs affecting most other industries. But hiring has been largely to replace older, retiring workers.

Tariffs disruptions

Wade Merritt, president of the Maine International Trade Center, said that frequently shifting tariffs have complicated the import of manufacturing equipment. “What are the tariff rates going to be between the time that piece of equipment gets on the boat and when it gets off the boat?" he said. Jennifer Small, a partner with Malone Commercial Brokers, said that real estate costs are rising for manufacturing space as well as equipment, to the tune of $12 to $14 per square foot of industrial space. “You can literally lease office space for less than you can get an industrial manufacturing facility," she said.

Manufacturing overseas

Companies that depend on offshore factories are also challenged. At L.L.Bean, tariff uncertainty has meant a lot of time and energy spent on shifting production from high tariff countries to those that are not, for the moment, as heavily taxed. “It’s caused so much chaos," said Kirsten Piacentini, chief supply chain officer for the Freeport-based maker and retailer of outdoor gear and apparel. “We’re a financially sound company and we will withstand this, but this is a disruption that is impacting our decisions every single day," she said. "We are moving out of certain countries into other countries to try to minimize our risk, but it takes a lot of time." Lewis asked whether the state could do more to build supply chains and production capacity in Maine. Piacentini said, as much as she liked his thinking, bringing large-scale production back to the states is not in the cards anytime soon. The U.S. lacks factories, equipment and skilled workers. "The reality is, that's not going to happen," she said. She shared the example of the company’s Brunswick facility, where stitchers assemble the iconic Bean boots and tote bags “We recently hired 60 new stitchers, from 150 applicants, and none of them know how to sew," she said.

AI in the spotlight

Panelists also discussed AI's potential impact on different industries. On the question of how the use of AI might affect manufacturing, Lewis said, “If you’re in the trades and manufacturing, you don’t need to worry as much. White collar professionals are most likely to be affected, and Microsoft’s Copilot AI program will have a big impact.” Piacentini said L.L.Bean is looking at how to use AI to be more efficient and to innovate, but underscored that "it's not a firing tool." “I tell our people, ‘AI will not replace your job,'" she said. "But someone who knows AI could replace you. Be curious, embrace it; it’s here.”