Right now there is much pirating going on in industry throughout the Nation. All you need to do is look in the papers in St. Louis, Los Angeles—the companies in Los Angeles are advertising in St. Louis for workers and the people in St. Louis are advertising in Los Angeles for workers, so the pirating and the problem such as minimum wages is not really a problem at this time. Companies are so clamoring for people with the slightest skill that they are going to get more money in time than they would by having minimum wage increases, the demand for skills is so great it is forcing the incomes up daily.

Senator KENNEDY of Massachusetts. You make some recommendations based upon your experience that should be considered by the committee. From the early part of your testimony it seems that most of the problems by local level obstructions that were placed in the way

of your application.

Mr. ERICKSON. In our first application, we were in need of 200 people. We went to the Employment Service to determine if they had the people that would meet various qualifications and they did not, so we went to the Bureau of Apprentice and Training and negotiated with them on a program to train people.

We arranged for 102 trainees and during the same period of time the industries in the area developed a tremendous need for skills themselves. Consequently, when our people were trained and received their certificates of completion of the training, they were made more appealing to other industries in the area and we lost several to more sophisticated companies.

Senator KENNEDY of Massachusetts. Can you make any suggestions about increased allowances that should be provided by this program which would stimulate additional on-the-job training?

Mr. ERICKSON. I do not think the allowances as such are needed. I believe simply this: That if the companies that can foresee the skills they will be needing were predetermined and the shortages set up in the community, that if a company called the Bureau of Apprenticeship and Training a program could be started within a few days or weeks, and not wait, because of the conflict between the local employment service indicating they have in their files someone that may or may not be qualified. This is holding up any program

any area Senator KENNEDY of Massachusetts. Would you like to see this centralized and coordinated out of Washington ?

Mr. ERICKSON. I think that the representative of the Bureau of Apprenticeship and Training should be given the leeway when they see and recognize the shortage that is in the area, if someone asks for a small program they could handle it without a lot of redtape, which is going on at the moment.

I think the shortages that are indicated in the various parts of the country could be indicated in Washington as an automatic release for a program, for machinists or whatever the case may be. I believe these shortages should be reviewed. But where you hear the Employment Service say they have 12 or 13 assembly workers, but in the eyes of industry versus the eyes of the Employment Service, they may or may not be qualified whatsoever to fill the job and yet programs are held up because of the listing of these so-called assemblers on their books (using assemblers as an example).


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Senator KENNEDY of Massachusetts. Do you recommend a tax credit incentive to encourage on-the-job training programs?

Mr. Erickson. I think the encouragement of on-the-job training is, first, before recommending tax reductions, I believe there should be more play by the capital or industry in itself, the chambers of commerce, to encourage the individual companies to do more training.

Through the years the small companies have actually trained for the large industries and they continue to do so. They do not have the personnel to keep them in contact with these various acts that are passed in Washington for their benefit. The question of a tax credit would encourage some small companies, which are training on their

They are facing tougher competition. They do not have the personnel to handle the paperwork for this sort of reporting.

Senator KENNEDY of Massachusetts. Do you think that a tax incentive would make you do more than you are doing?

Mr. Erickson. No, competition makes you do more than taxes. Competition is going to force you to go out to get the skills that can create more production per man per week. Tax savings is, of course, one incentive.

I believe that the OJT program as such by helping with the pay of supervisors, you are paying for a specific amount of hours training, is the greatest incentive we could possibly have right at the moment and better control than someone saying, “Well, I trained so and so for X number of hours and here is my tax credit bill."'

Senator KENNEDY of Massachusetts. Under the amendment that was introduced by Senator Javits, authority is given to local administrators to approve projects up to $75,000. Are you familiar with this aspect of the OJT Mr. Erickson. Yes.

program? Senator KENNEDY of Massachusetts. If so, of your own knowledge has it worked effectively in your area?

Mr. Erickson. It still has to go through all kinds of committees; it is still held up. Each little project, each little contract with the Bureau of Apprenticeship and Training is negotiated and yet it goes before these advisory committees. I think they should act as advisory committees and in special cases perhaps pass on some larger amount, but the advisory committee should advise as to what the shortages are for the area and not get into the question of labor rates which has come up in our particular area, and I do not think it is any of their business in that category, but to just stick with the facts there is a shortage and handle it as quickly as possible.

Senator KENNEDY of Massachusetts. Mr. Erickson, I want to thank you very much for your appearance here before the subcommittee. I appreciate your testimony in response to the questions. It was very helpful. Mr. Erickson. Senator, thank you.

Senator KENNEDY of Massachusetts. We will include your prepared statement in the record at this point.

(The prepared statement of Mr. Erickson follows:) PREPARED STATEMENT OF L. A. ERICKSON, PRESIDENT, LUMINATOR, INC., PLANO, TEX,

Here I can cite personal experience which I believe will help point out some of the difficulties which bring about delays and uncertainties which may adversely affect the operation of the program. While in the process of constructing the

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new plant, we were making plans for the employees that would be needed to operate this facility efficiently and as rapidly as possible.

We contacted the District Office of the Texas Employment Commission and discussed the type personnel and the qualifications of the personnel we would need. We found that there was a general shortage of skilled workers in the area, particularly since a number of the other companies were needing workers with the same qualifications. It was quite certain at that time that we would need to provide job training, as there was no training being conducted in the schools at that time to meet our needs.

We then contacted the Bureau of Apprenticeship and Training of the U.S. Department of Labor to assist us in developing a training program and, if possible, with some financial aid as would be available under the Manpower Development and Training Act (OJT).

After several sessions with the representatives of this department, we worked out an arrangement for training 102 workers and we negotiated a contract with the Bureau of Apprenticeship and Training which would provide reimbursement for a part of the estimated cost. After an agreement had been made as to our needs, it was presented to the Advisory Committee for approval or for disapproval.

There was some delay in clearing this program through the Advisory Committee because of the objections on the part of the Labor Representative; however, the Bureau representatives were able to clear this by pointing out that we would provide job and training opportunity for mostly rural workers with no previous industrial experience, knowing their production would be low and rework and subsequent scrap high until they were adequately trained. It was further pointed out that over a reasonable time our wage rate would meet or exceed that prevailing in the area for comparable work.

This program, in the first phase, was completed satisfactorily. Out of the 102 in the original program, 65 completed the training, which covered a period of 12 weeks, and of this group 48 are still with the company. The average wage rate at the beginning of the program was $1.25 an hour. This has now been increased to an average of $1.91 an hour.

During this time, the need for more workers in our area increased tremendously with some of the more sophisticated industries within a short distance of our plant, enticement for higher wages lured some of our trainees to jobs for which they previously had not been qualified. We had awarded certificates which gave them the stature needed when applying for other jobs.

On our request for a second project to increase our forces, we were not so fortunate in getting this program started. After negotiating the program with the Bureau of Apprenticeship and Training, we ran into a problem in clearing the program between the local employment service and the regional office.

The local office contended they had in their files applicants with qualifications to fill the jobs. This held up the regional offices' approval of the program. We informed the local office we would offer jobs to those persons who qualified as skilled workers, or as trainees, if they met the company's requirements.

To help clarify this obstacle, the Bureau Representative brought a representative from the local ES and one from the district ES to the plant to establish an understanding. This cleared the procedure for handling requests to ES for qualified persons a determination of the shortage for the purpose of clearing the OJT program. The program has been pending for some 90 days for the apparent reason that the two offices, the regional and the local, are not in agreement of justification for the OJT where there is a general shortage, even though one or more persons appear to be available and who may or may not actually qualify. From my own experience, and from what I have learned through discussions with other employers, it appears that OJT would operate more smoothly if:

1. Determine skilled shortages in the area.

2. Have these shortages approved for training without delays by the Es, if the Apprenticeship and Training Bureau has already approved the training and methods. (Review shortages from time to time.)

3. Have the Advisory Committee function as an Advisory Committee and not process each application.

A. Meetings may be infrequent.
B. Members lack understanding of responsibilities.
C. Clearing each individual program.
D. Weighing all parts of program

(1) Costs
(2) Standing of employer
(3) Wages paid

All of this requiring fairly complete documentation and negotiation for cost before Advisory Committee approval or disapproval. It is my understanding that some of these activities and responsibilities are beyond the intent of the Advisory Committee.

However, until these matters are cleared up on the local level, projects are being delayed and approvals are uncertain. This is all after the program has been negotiated to the agreement of the Bureau of Apprenticeship and Training, who will execute the contract.

Institutional type training is very essential in all areas, but when there is little of this going on, on-the-job training is the most rapid way of overcoming the training needs.

It would benefit us all if more institutional training and facilities were available. The vocational type training can be a fine foundation for entering industry for further job training to a specific skill.

To qualify for many jobs, the worker can only be trained on the job because of: Availability of equipment; availability of instructions; nature of the work in. yolved ; and the requirements of standards for a specific product.

A worker trained on the job is a producer from the beginning. On-the-job training should be less costly to the Government and could be very effective in time.

Senator KENNEDY of Massachusetts. Our final witness this morning is Mr. Michael Shevchik, administrative assistant to the president of the Elliott Co., a division of the Carrier Corp., of Jeannette, Pa.

Good morning, Mr. Shevchik. We appreciate your appearance before the subcommittee and I know you have testimony here and we are delighted to have you. You have the choice of either reading it, including it in the record or summarizing it, whatever you would like to do.



Mr. SHEVCHIK. I assume the written statement I submitted will be a part of the record and perhaps so as to save time, and having the adrantage of listening to some previous testimony, I would like to make these comments.

You had questioned one of the witnesses earlier how they discovered this job training program.

In our case at Elliott Co. it was somewhat by accident. About a year ago the president and myself had a visit with our local Congressman, John Dent; we were discussing general business conditions and we pointed out to him that we were having some real problems with skilled manpower and had made a decision to go ahead and start a training program.

Mr. Dent suggested we could get some Federal aid and we should look into it. We subsequently checked with our personnel department and discovered they were aware of such a program, but apparently had not done too much about it.

We started to make an exploration and I guess my observation is somewhat similar to what I have heard previously this morningthere seemed to be a lot of redtape, a lot of questions to be answered, but we finally prepared an application and got it underway.

We decided to go ahead with the training program early in May. Because we were trying to improve the image of our company in the area where our plant is located, we announced the fact to the press that this program was underway.

Lo and behold, the following day we received a phone call from the Manpower Commission telling us that under the circumstances our application was going to be voided. We had announced our training program had been started before formal application had been received. This, of course, disappointed us, but we had no choice. We needed to train these people, and we proceeded with the program.

We subsequently were able to have the application modified so that it covered the next two classes. We had decided to embark on a program of training 96 people in groups of 32.

Well, we got no recognition on our application for the first 32, but we subsequently did get an OJT approval on the last 64.

There was another decision we made during the course of this program and that is to train about 16 more people in the shop proper rather than off in the training center. We made an inquiry as to how long it might take to obtain approval for this program, and again learned that it would probably take 6 or 8 weeks. We concluded under the circumstances we could not delay the program and proceeded to go

ahead and train these 16 people at our own expense. We have now filed a second application to train

64 more people. The application took about 6 weeks to process. It has now been approved and yesterday a group of 25 started under an overall program of 64.

This is in the mill. Our recovery on the first program of 64 represented about $23,0000 although we have not received anything as of the moment. Our application for the next 64 represents about $29,000. We now understand this OJT program better and under the circumstances, of course, are in position to present an application form in less time, more concise, and more clearly.

I think this is our background. I will be very happy to answer any specific questions.

Senator KENNEDY of Massachusetts. I notice in your testimony on

the first page :

A search in the area disclosed that the local technical schools established under the Manpower Development and Training Act, were not providing people skilled in the operation of machines of the sizes and types used at the Elliott Company.

Could you develop that to some extent?

Mr. SHEVCHIK. Yes, we are what is called a heavy machine shop. Our equipment is very large in size. We manufacture large turbines and large compressors and much of the material that is machined will weigh anywhere from as little as 100 or 200 pounds to perhaps as much as 2,000 or 3,000 pounds.

Therefore, this takes large machines, large apparatuses, and our local technical schools are not equipped with facilities of this type. That is one of the reasons it was necessary for us to provide the training on our own premises with these large tools, large drill presses, large boring mills. These are seldom found in a technical school of the type we have in our locality.

The variety and types of tools are rather limited. I might say this, we at Elliott Co. have improved this picture somewhat as a result of an improvement and renovating program we have had at our Jeannette operation. We have replaced many of our tools in the last 3 to 4 years and have donated much of our previous equipment to technical schools, both in the Greensburg and the Latrobe areas. This has helped immensely to provide training equipment for the high school students

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