Big Business Bets On Education, Turning Factories And Corporate Campuses Into Schools

Tired of looking for workers and not finding enough of them with the right skills, some of the world’s largest businesses are partnering with local governments to train the next generation of American workers.

General Electric teamed up with the city of Cleveland to create the MC2 STEM High School, which brings students onto GE Lighting’s corporate campus for their sophomore years. GE employees serve as mentors, and students get practical experience creating lights and working with high-tech manufacturing machines.

Founded in 2008, the program is off to a strong start. Its graduation rate is 95%, compared to just 60% in the Cleveland Metropolitan School District as a whole.

South Carolina’s technical schools have partnerships with dozens of companies, including Timken , Michelin, Caterpillar and Coca-Cola . BMW teamed up community colleges near its South Carolina plant to create an apprenticeship program. The 14 BMW Scholars making up the program’s first class graduated in 2012, and all of them were given full-time jobs.

“I will be your No. 1 employee,” South Carolina Governor Nikki Haley told BMW executives last year. “My job is to make sure you’re successful. My job is to bring in the suppliers that you need, that we continue to have the trained workforce that you need, and together we will make sure that we are continuing to make great, quality cars.”

In Brooklyn, IBM partnered with the city of New York to create the Pathways in Technology Early College High School, where students earn both high school diplomas and associates degrees at graduation, putting them in position for entry-level jobs at IBM. In October, President Barack Obama visited the school and called it a model for the nation.

It’s about time businesses rethink their approach to education, says Harvard Business School professor Jan Rivkin, who argues that globalization has made businesses less focused on education in their communities.

“Businesses have got to be engaged in partnering with educators to be sure that people are trained to succeed in the 21^st century economy,” he says. “Historically, when business was rooted in local areas they had very strong incentives to make sure the schools, suppliers, infrastructure and pools of skilled labor in those locations were very strong. But when you can move from place to place, incentives for reinvesting in any place are going to decrease.”

Companies are risking their own future when they become nomads hunting for the best tax breaks without investing in local economies, Rivkin says. Instead, companies must expand globally while investing locally.

Some foreign companies are doing just that, offering innovative worker-training programs at their U.S. facilities. ThyssenKrupp, a German company with a major manufacturing presence in the United States, started a program during the depths of the recession that sends its American engineers to Germany and its European ones here.

Think of it as paid study abroad. In the short term, it’s costing the company. Workers are less productive in foreign countries, but ThyssenKrupp is looking at it as an investment for the future that will help its employees communicate better with co-workers across the Atlantic and suppliers all over the world.

“You have to be successful internationally,” says Fabian Schmahl, CEO of ThyssenKrupp Bilstein of America. “If you want to succeed as a company, you have to think a little bigger. You have to be bold in what you do, and you’ve got to take some risks.”

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