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Retraining the future: Can Wyoming build the workforce outside the energy industry?

Retraining the future: Can Wyoming build the workforce outside the energy industry?

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GLENROCK — Two years ago, the Higgins Hotel was jammed with oil field workers and owner Doug Frank worried about a lack of available rooms for summer tourists. Today, Frank reckons someone could hold a cannon fight on Birch Street, the central artery in this community of roughly 2,500, and no one would notice. Hardly anyone walks Glenrock’s streets these days.

Few Wyoming communities have been harder hit by the energy bust. The oil fields to the north have gone dry, and the parking lots where coal miners catch the bus to the yawning surface mines in the Powder River Basin are half-full. The oil field service jobs in Casper, a half-hour west, have all but disappeared.

But a nondescript building on Glenrock’s east side may hold the key to this community’s economic revival. Fewer than a half-dozen people were employed here several years ago, retooling oil field equipment for DS Manufacturing. The company was acquired last year by McGinley Orthopaedic Innovations, a medical device manufacturer. Now, 23 people labor in three shifts around the clock, building a drill used in orthopedic surgeries.

The shop has become a landing pad for former energy workers like Sturgis Steele, a burly machinist with a ZZ Top-esque beard. Steele refurbished oil field parts during the boom years only to see the work evaporate once the bust hit.

“I knew being the medical field and everything, there was a lot better job security,” he said during a break one recent afternoon. Of his present employer he added, “It is an upcoming company, for sure. Once it takes off, it will provide quite a few jobs.”

Wyoming has long struggled to lure firms like McGinley Orthopaedics to the state, burdened by the perception that it lacks the workforce to sustain high-tech jobs. Technology-related positions, including those in manufacturing and engineering, accounted for just 1.8 percent of the Cowboy State’s labor market in mid-2015, according to a recent analysis by the state Department of Workforce Services’ Research and Planning Department.

But after years of calling for diversification, Wyoming finds itself with little money to spend on the training needed to help workers like Steele make the jump to careers outside the energy industry. A budget shortfall wrought by the downturn in mineral revenues has raised the specter of cuts to the Wyoming Community College Commission and the Department of Workforce Services, the very agencies identified by Gov. Matt Mead as crucial to the retraining of laid-off energy workers.

Community colleges will see their budget cut by nearly 8 percent or $20.2 million. Mark Englert, the CEO of Gillette College, expects enrollment will increase even as funding decreases.

The college is focusing its resources on training in skilled trades like machining and welding.

“We will look for efficiencies as best we can. We are going to capitalize on existing staff and expand in some areas,” Englert said. “It will present all of us with challenges.”

The Department of Workforce Services is set to reduce spending on employment and training by $732,539. Its Workforce Training Fund, which provides workers with specialized job training, faces a $1.5 million cut.

That money has traditionally been crucial for institutions like Wyoming Contractors Regional Training Center in Casper, which uses the funding to develop specific training courses to match employers’ needs.

McGinley Orthopaedics has been in negotiations with the training center to set up its own certification program in CNC machining, the type of computer-assisted manufacturing used to make the company’s drill. The prospective program has struggled to move forward, however, complicated by the question of where money for the training will come from.

“We’re fortunate enough that we get a lot of grants available for these training programs, too, but with cuts at the state level, some of that is going to go away,” said Paul Nash, a recruiter at the center.

State officials say ample training opportunities remain. The Department of Workforce Services operates a series of one-stop centers, where officials try to match laid-off workers to open positions. The department has begun hosting career symposiums on Monday afternoons in Casper. And it has applied for up to $2 million in federal funding to help retrain laid-off coal miners for manufacturing and virtual jobs.

“I think we have a lot of opportunities right now for someone in the state who is laid off,” said Tobi Cates, the department’s employment and training administrator.

Opportunity and challenge

For a company like McGinley Orthopaedics, the bust represents both an opportunity and a challenge.

The firm was founded by Joseph McGinley, a Casper orthopedic surgeon who saw the need for a more accurate surgical drill. McGinley’s drill, the IntelliSense, won Federal Drug Administration approval last year. The company is now applying the finishing touch to its first batch of 100 drills. It has plans to build 400 more and is plotting an expansion into surgical saws.

The firm has raised $10.2 million in private financing since 2012, including $3 million in a two-month period this year. It has also received considerable public assistance. The State Loan and Investment Board contributed a $1.35 million business ready development grant while Glenrock pitched in $150,000. Frank, the owner of the Higgins Hotel who also serves as Glenrock’s mayor, called the company “our largest bright spot.”

Still, McGinley Orthopaedics would have had difficulty luring an experienced machinist like Steele away from oil field work two years ago. As a startup, the company could not have been able to compete with the wages and benefits available in the energy sector.

The firm is now “inundated” with applications from oil field craftsman, said Diane McGinley, who runs the company with her husband.

Many have the basic skill set to work in the drill maker’s shop. But before they can step on the factory floor they need specialized training to work the company’s high-tech machines.

“What we find in Wyoming is there are many individuals who know how to do manual machinery or work with some larger parts that are sort of computer-based,” she said. “I think we have the talent in Wyoming. But we have to invest in them.”

McGinley is quick to offer praise of state officials. The company has hired numerous employees through the Department of Workforce Services’ one-stop centers. The $1.35 million business ready development grant has also greatly increased its ability to hire.

But she is critical of proposals to cut funding for training programs.

“This is part of how we grow as a state and keep people here instead of losing them to other states and economies,” McGinley said. “That is taking away that investing opportunity from an employer. There may be other employers who want to invest in their people, but don’t have the means to do so.”

To date, the company has relied on an in-house training program. New hires are partnered with more experienced hands on the factory floor. It would be more efficient to create a training program, freeing up factory hands while training prospective employees for the job, she said.

The company already coordinates with Casper College, which boasts a CNC machining program. That has provided a pool of potential applicants with a basic knowledge of computer-assisted manufacturing. Many still need specialized training, however.

More challenging is the fact many students don’t know the program exists, or that medical device manufacturing is even an option to them.

“I think it hasn’t been on the radar for those entering the workforce from high school or community college looking at this as a viable field,” McGinley said.

New career, new challenges

Indeed, perception may be one of Wyoming’s greatest challenges. A generation of new welders, machinists and electricians entered the workforce at a time when the oil field is booming, said Travis Blankenbaker, a welder at McGinley Orthopaedics.

Their skills are easily transferable to construction and manufacturing, but many are loath to take a pay cut now that oil field work has slowed, he said. At the other end of the spectrum are those who have worked in the energy sector so long that the idea of moving into a new industry seems prohibitively daunting.

Blankenbaker, a former Power Service employee, is something of an anomaly at McGinley Orthopaedics. The company only employs two welders.

But his colleague, Steele, nodded in agreement nearby. Many companies outside the state see Wyoming and think roughnecks and ranchers, he said. In truth, many oil field craftsmen can do a variety of jobs. For a machinist, it’s often just a question of learning how to use the equipment employed by a company.

Yet many oil field machinists balk at the thought of training, not just for what it entails but what is signifies, Steele said.

“When you change careers, you have to be able to change your lifestyle,” he said. “As long as you’re open to it, you will survive.”

Follow energy reporter Benjamin Storrow on Twitter @bstorrow.

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