By Frank Rovella
Over the weekend, I was talking to a friend who is an Aerospace engineer for one of the big engine manufacturers in the Northeast. While discussing the manufacturing skills gap, and the resultant outsourcing to overseas providers, he told me that Poland has become a major provider for high precision manufacturing. This shouldn't be a surprise if you’re familiar with Polish society. Its certainly an underdog story, but also an example of how former Soviet Bloc countries have benefited from inclusion into the EU.
Over the weekend, I was talking to a friend who is an Aerospace engineer for one of the big engine manufacturers in the Northeast. While discussing the manufacturing skills gap, and the resultant outsourcing to overseas providers, he told me that Poland has become a major provider for high precision manufacturing. This shouldn't be a surprise if you’re familiar with Polish society. Its certainly an underdog story, but also an example of how former Soviet Bloc countries have benefited from inclusion into the EU.
Poland’s history dates back over 1000 years, with the last 200 representing the most turbulent, starting in 1795 and ending in 1989. Between the destruction of WWII, which took over 5 million Polish lives, to the over 40 years of Communist rule, Poles have endured unimaginable tragedy and hardship. However, for the last 25 years, Poland has seen a resurgence that underlines incredible resilience and highlights what a skilled workforce can accomplish with the right conditions.
Poland is bordered by seven countries, placing it at the heart of Europe. This was not lost on their neighbor to the west, such as Germany, whose industrial base needed low-cost labor to remain competitive. After Poland was unbound by the USSR in 1989, its doors were open to foreign investors seeking a stable government and an educated, technically savvy workforce. Since Poland joined NATO in 1997 and the EU in 2004, it has become a very attractive place for investment from across the globe. This was also aided by 40 billion euros invested in Polish infrastructure by the EU, which will continue as the EU has promised another 106 billion between 2014 and 2020. Add to this one of the highest literacy rates in the world (99.7%), and you could say that it’s a pretty good bet that Poland will grow and prosper.
The skilled labor and the logistical advantage Poland offers helped in large part to supercharge the German auto industry in the 90s; in fact, these advantages have allowed some German auto parts to be manufactured cheaper in Poland than in China. The German auto industry can trace much of its success to its factories in Poland and has invested heavily in its eastern neighbor. German auto and truck makers currently employ over 10,000 workers in Poland in several modern plants. This has spawned a large number of subcontractors who provide precision machining and other ancillary services, as well as a robust steel industry. Despite the fact that Poland has no national auto brand, automotive parts are their leading export, comprising almost half of the annual GDP. This is helped by auto manufacturers such as Volkswagen, GM, Daewoo, and Fiat.
Poland continues to attract investment by major corporations; 3M, for example, has been in Poland for over 20 years and operates nine manufacturing plants. One of the newest plants manufactures products for the aerospace industry, such as adhesives and thermoset protective films, and services clients of AAMD (Aerospace & Aircraft Maintenance Division), including Airbus, Bell, and Boeing. Aerospace has become a major player in Poland's manufacturing boom. So much so that the Podkarpacie region of Poland, near the southeastern city of Rzeszow, has been named ‘Aviation Valley.’ This is the home of Polish Aerospace, dating back to the 1930s. Today it includes some of the biggest names in the industry, such as Sikorsky, Pratt & Whitney, MTU, Hispano-Suiza, Avio, Gardner Aerospace, and over 100 others. This represents 80% of Poland’s Aerospace industry and over 23,000 jobs. These examples are only a part of the Polish economy; there is also a growing R&D and high tech sector, shipbuilding, agriculture, appliance manufacturing, and even a fashion industry which includes a Hugo Boss shoe factory.
My original intent in writing this piece was to find parallels and lessons learned that would help American manufacturers. However, American manufacturing problems such as the shortage of skilled labor, which I recently wrote about, are societal issues. Finding parallels in Europe or anywhere else for that matter can be fuzzy at best; we're just too big, dynamic, and unique for solutions that might work in a smaller, less ethnically diverse country. But if you like a good underdog story, Poland is it.
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