Business
11:49 pm
Sun February 9, 2014

Could German-style paid apprenticeships work in Michigan?

Tracy Samilton's report on apprenticeship programs.

In the United States, high school students are often told they need a four-year college degree to get a good job. That can mean racking up a lot of debt.

But in Germany, students can choose a paid apprenticeship. Now, Michigan officials hope to import the system here.

The apprentice system in Germany is extensive. You can become a land surveyor, a bank clerk, a robotics technician... so it's not hard to find someone who's done it.

When Sophie Stepke was 16, she was a typical teen. She had no idea what she wanted to do for a living.

She could have postponed a decision by staying in high school. Instead,

I went for an apprenticeship as a professional land surveyor. So for three years, I worked with an employer, I went to school, and I basically became a professional land surveyor. So I was staying out there building streets and building houses and all that kind of stuff.

And she made money the whole time. German companies pay tuition and wages while the apprentice learns the trade. The theoretical training is in the classroom, the practical training is on the job. Usually, the apprentice is hired full-time after the training period.

If that sounds great, it is. Michigan officials from the Governor on down are really intrigued by the system. It began in the Middle Ages among German craftsmen, and was adapted by German industries later. It just works so well to connect people with jobs - something we're having trouble doing.

Stephan Meinhardt is a bank clerk a very specialized bank clerk who also learned his job through apprenticeship.  He works at Commerzebank in Frankfurt in the Cash Center Administration department, where the bank does settlements for cash trades.

Meinhardt says one of the things that makes German apprenticeships so good is they don't just train you for one specialized thing. The company that eventually hires you wants you to understand the whole business, not just your job.

"Customer service, pay and receiving, securities, even the archives you name it. I went actually everywhere," says Meindhardt.

Spending time in each department made Meinhardt a much more flexible and knowledgeable employee and allowed him to move into different jobs within the company easily.

The system isn't cheap for the employer. Depending on the length of the apprenticeship, a company may spend between $25,000 to $100,000 on one three-year apprenticeship. But the company gets work out of that apprentice during the training period. And, as economist Timo Klein of IHS points out hiring somebody who's not right for a job is also expensive.

"There's less of a risk that a person maybe appears very good and likeable, whatever, in an interview, but a few weeks later into the job, turns out not to have the adequate competence," says Klein.

There's not as much risk as you might think that the company and employee will part ways after the training. Sophie Stepke, who changed careers after her apprenticeship, now works for ZF, a German auto supplier. Her job? Helping ZF start an apprenticeship program in Michigan. She says it's rare for an apprentice to bolt for the company next door after getting trained.

"Because you invested in them, you supported, them, you showed them that you as an employer are super-interested in their development, so they get invested in our company, they become loyal employees."

Now, Stepke acknowledges that transplanting this kind of system to Michigan won't be easy.

But a shortage of skilled labor in the state and the expense of a traditional four-year college degree are making lots of people really eager to see if it could work here.

Trying it out here

In a lab at Henry Ford Community College, a group of apprentices is trying to fix a deliberately broken automated assembly line.

The students are learning a trade called mechatronics in Michigan's first try at a German-style apprentice program.

It was started by the Michigan Economic Development Corporation, Henry Ford and Oakland Community Colleges, and eleven German auto suppliers with operations in Michigan.

In the end, the apprentices will be able to do a job the suppliers sorely need to fill managing automated assembly lines.

Apprentice Rebecca Neumann says they have to work 40 hours a week, either in the classroom or on the job but the auto suppliers pay the tuition and a wage.

"$200 a week so it's not bad for being paid to go to school," she says with a smile.

Apprentice Austin Cronin feels some extra pressure to succeed.  A lot of people are watching, especially after the high-stakes pilot was mentioned by Governor Snyder in his most recent State of the State speech.

"So it's like we are setting the example for the rest. If we are successful, they'll continue it, if we fail, they'll discontinue it."

In the long run, the hope is this program will expand to other fields.

That won't be easy, according to Sean McAlinden, an economist with the Center for Automotive Research.

He says there's no doubt paid apprenticeships help Germany train its people for good jobs.

"Germany's manufacturing which is not low-cost has remained globally competitive with this system," says McAlinden, "and that's a powerful attractant."

But McAlinden says changing how we train people won't be easy or fast.

Sophie Stepke agrees, and says one obstacle will be cultural.

She says, companies from each industry come together and agree on what the apprentices learn even if some skills help only a few of the companies. That improves the quality of the labor pool for everyone.

"Here in the U.S., that's a totally new concept," she says, "and it brings also a different mindset in. All of a sudden we have to work together even if we are competitors."

Of course, there's a danger that companies not involved in the new system will swoop in and hire the workers away from the suppliers.

But Stepke says apprentices tend to build a lot of loyalty during their training because they know so much about the company, and because so much has been invested in them.

And, doing nothing isn't a good option.

Too many people with four-year degrees can't find jobs. Too many employers can't find skilled workers.

Stepke thinks these apprentices are taking the first step toward a radical change of Michigan's education system- some day.

"Detroit... Michigan... is all about auto manufacturing - so have students (start) being trained in that area and then let's see it comes down to all professions," she says.

And the pilot could be about to expand, in a small way.

There's a plan for a second class of mechatronics apprentices this fall, and possibly two new programs, in industrial design and information technology.