Nick Pinchuk: Heroes of our Time – Restoring the Dignity of Work in America
An interview with Matt Kirchner and Nick Pinchuk, Chairman and CEO of Snap-on
I have heard today’s guests speak a number of times, the first time at an event honoring our mutual friend, Dr. Bryan Albrecht, on being named his community’s distinguished citizen of the year and on two more occasions thereafter. Every single time today’s guest leaves me amazed. The TechEd Podcast is all about securing the American Dream for the next generation of workforce talent. And there is perhaps no greater champion for American manufacturing, for American manufacturing talent, for the genuine value of the American worker and for the dignity of work than today’s guest.
My name is Matt Kirchner. I am your host for The TechEd Podcast, and today we are joined by Nick Pinchuk, the Chairman of the Board and the Chief Executive Officer of Snap-on. Now, Snap-on is a company that is very, very well known to our audience. It is a worldwide brand dedicated to the calling, to the vocation of making and fixing. And they live out that dedication by providing a broad array of unique productivity solutions. Now while today’s guest Nick Pinchuk holds Masters and Bachelors of Engineering degrees from Rensselaer Polytechnic Institute and an MBA from Harvard Business School. I am going to tell you that he is one of the most down to earth and genuine leaders you will ever meet. It’s an honor to introduce him to our audience. Mr. Nick Pinchuk, you are an incredibly busy person, and it means the world to The TechEd Podcast to have you joining us today.
Well, thank you for that very kind, but I’m afraid very hyperbolic introduction. You know, so I’m just a toolmaker really, actually, you know, that happened to land in the right place in Wisconsin. It really worked out very well for me. So I’m very pleased to be at Snap-on. It’s a great company. I’m pleased to be here. You know, I do believe that – I’m going to say it many times on this podcast – that the upskilling of the American workforce is the seminal issue of our time. I see no path to prosperity without achieving that for America. And the people on this broadcast are some of my favorite people, because they are the agents of that upskilling.
Why Are the People Who Do the Work So Important?
Without question, and no doubt your humility lives on. You’ve done amazing things and true to form you are, as we suggested, down to earth and genuine. We so much appreciate that. Now, Nick, I mentioned in the introduction, that I’ve heard you speak several times, and I’ve never been disappointed. You know, what’s amazing to me is you’re as comfortable – and I’ve seen it – talking earnings guidance on CNBC as you are chatting with the people, as you put it, in the garages, in the factories. I want you to begin by telling us why your relationships with the people who actually do the work of manufacturing are so very important to you.
Well, you know, Snap-on is a company that if nothing else is founded and rooted in the idea of the dignity of work. We have the greatest respect for those people. And it becomes…when you spend a lot of time at Snap-on, you see how important they are. In fact, this is a special time. You have people on the show – you know, listening to the show – who are responsible, as I said, the agents of upskilling the American workforce. And what they do, and the upskilling American workforce has never, ever been more important.
If you don’t believe that consider this: you know, we’re all going to go home and have dinner. And yet that food was vended to us by a grocery clerk, or delivered by a truck driver, who can’t work from home. It was loaded by a warehouse worker who can’t work from home. Produced and processed by a factory worker who can’t work from home. Supported by people who keep those mechanisms going, and in our case, the critical mobility going. In other words, the people who are in technical careers are the very people who are maintaining our world, keeping our society from disintegrating while we engage in defeat the virus. They have never been more more important, and it’s never been so evident really!
You know, isn’t it ironic that the people sometimes we, the general population, refers to as having settled for the consolation prize of our society, are the very people we turn to when the skies have been the darkest. They wrote books, there’s been a lot of books – Freedom’s Forge, The Engineers of Victory – written about American men and women who maintained our industrial substrate so we could win the one war we could not afford to lose: that is World War II. Well, they’re going to write books about this era. They’re going to write them about those people who kept our society from disintegrating. And they are the very people you just referred to that I get a chance to talk to, that I get the privilege to talk to all the time. They are the heroes of our time. And you know, if this time doesn’t point out to Americans that we need to keep nurturing that strength, I don’t know what will.
What Really is the “American Dream”?
Without question, and if you’ll permit me just a brief personal interlude, I couldn’t agree with you more as we head through this worldwide pandemic. And I will tell you that, you know, I got, it’s almost been a year since the world started in some ways shutting down. And you know, I did the same thing as a lot of folks did for that first 30 days. You weren’t quite sure what was going on, you’re holed up in your house a little bit more than otherwise. And I can tell you, it just felt weird to me, having the Amazon driver delivering the groceries or the packages to my house, knowing that there were all these people that were risking, at that time, their you know, their lives, in some cases, to be able to bring those products to us. It just didn’t feel right. And so I got back into the workforce, I got back into the field way sooner, I think, than a lot of people did. In part because these folks that are out there, really living out the true American Dream. And I’ve heard you speak in the past about maybe some misperceptions of what that dream is.
You know, we talk about it all the time here at The TechEd Podcast, Nick, about securing the American Dream for the next generation of STEM and manufacturing talent. Tell us about how you see that dream – the true American Dream – being lived out by your employees at Snap-on every day?
I’ll tell you what, you said it correctly. We’ve been at work every day. We haven’t missed a day. And the reason is, it hits us because we are associated with the warehouse people and the factory workers. And they’ve been at their posts every day, how can we not be here? How can we face them? Now, we have people who work from home; about 70% of our white collar workers work from home. But in fact, the leadership of this company has been here. And for this very reason, as you articulated, that’s one of the things we have done.
In terms of the American Dream, people are writing about this. Tyler Cowen – you know, The Average is Over – he talks about the disintegration of the American Dream, or the fact that it’s gotten away. But that’s not it. The American Dream has gone nowhere. Our estimate, our view of what the American Dream is, has changed, in my view. You see, now we think the American Dream is you become a university president or a CEO, or an attorney, or a physician, or a pundit or somebody in Washington. That was never the American Dream. And if you want to live out one of those jobs, as you know, I think you might find them not so dream-ish, you know, that’s okay.
But in fact, the American Dream has always been the ability to keep your family warm, and safe and dry, and to have pride and dignity in what you do. And one of the things that visits upon us at Snap-on when we visit factories, or visit repair garages, or visit flight lines, is the people, the Americans who labor on those tasks, have the ability to keep their families warm and safe and dry. They live well, not extravagantly, but they live well. And they have pride and dignity in what they do. This is an important thing. And so I think one of the things we have lost here is, is that we want to keep expanding those jobs. Part of that is upskilling the American workforce, matching the curriculums in schools to what’s really needed, you know, in the flightline, and in the factory and in the garages.
But also, keep reinforcing the idea that these are not the consolation prizes of our society! They are in fact that American calling that delivers us in the darkest of days. That’s something we need to impress upon people. You know, I was in Washington – I love to tell this story – I was in Washington, speaking to one of these magazines, a very respected magazine. And people in the audience were very intelligent and educated people. And they’re sitting around and I say, people often view technical jobs – welders and repairman and mechanics – as the consolation prize. And they looked at me with a certain level of incredulity. And then I asked them: how would you feel if your son or daughter, niece or nephew told you, they were going to be a welder in a Snap-on factory? And you could have heard a pin drop in that room. Because you knew what they thought. They think those are the jobs that other people’s kids do. But in fact, they’re great jobs. It’s part of Americana.
We’ve lost the respect for the dignity of work, and we need to restore it. So one of the things we need to do is keep insisting that people I would say, talk the walk. Speak of these jobs as they’re important. Sometimes I hear things about, you know, people go to college, and it costs so much money and they’re burdened with debt. And that’s a problem. I don’t want to address that point. But inside that is something that says you have to go to college, you have to go to a four year college, and it just ain’t true. You can have a great life without it. In fact, Liberty Economics, one of the elements of the New York Fed publishes data that says that, you know, yes, if you go to a university and get a four year degree, you’re going to on average have a million to a million and a half dollars more earnings lifetime. But the problem with that is Warren Buffett’s in that number. You know, people like Bryan Albrecht are in that number, you know, bringing it up, you know. But the thing is, if you look at the bottom 25% of university graduates, who have themselves dedicated those four years and paid all that money, they earn less than high school graduates. So it isn’t a delivery. That’s the thing.
So I believe the economics, the data is there to show that these are great jobs. And that is the American Dream. Our strength has always been that we can make and fix things. If you read historians, who try to answer the question about why is America ascendant over all the other countries in the Western world, and maybe most of the countries in Europe and Asia? It’s because we were built on a broadly-energized creation economy, as opposed to other countries, which had cash crops they could send back to Europe and import everything we want. That fact that broadly we could do things is what delivered us from evil, and will continue to do so. It’s just we have to keep upskilling our workforce to be able to match the challenges of the future.
Filling Jobs of Today vs. Preparing for Tomorrow
Well, and just a phenomenal message, Nick, certainly on the importance of upskilling. And there again, without even using the words, the dignity of work. You may know – our audience certainly knows – I spent 20-some years leading Midwestern manufacturing companies. So this podcast thing is something relatively new for me. I worked in the world of manufacturing. I saw lives fundamentally changed by people that came from every walk of life that you can dream of: high school graduates, people that maybe tried college, and it didn’t work out, people transitioning from incarceration. Incredible success stories of people that did the work of manufacturing and saw the magic that happens on the manufacturing floor, know the dignity and the pride that comes with seeing a product produced and looking back at the end of the day and saying, “I did that.” And I know that because I lived it for two decades. And that message is so very important.
You know, manufacturing technology, I was in an Industry 3.0 world, now we’re talking about industry 4.0, and that manufacturing technology is evolving. We have things like artificial intelligence, smart technology, robotics, data analytics, converging with the world of work. And given your passion for the American worker, I’m curious about how you feel manufacturers should respond to the advent of these new technologies.
Sure. I just want to say I have to tack on to your comments about manufacturing. One of the things I love: people ask me often how I evaluate myself. I evaluate myself by looking at the Snap-on parking lot. And so if I preside over the upscaling of the parking lot at Snap-on, I feel pretty good. And I can assure you, it has been upscaled over the years at all our factories and so on. So that makes me feel pretty good. It seems like the people who work here are doing really well.
You know, and I think that’s true about manufacturing in general. People talk about the idea that, oh, we have this business of income inequality and so on. Well, not really at the manufacturing level. Manufacturers make good money, you know? And they live good lives. And also people who are in repair garages, the technical careers are terrific in that situation.
And yes, there’s a question. Okay. What about the future? I’m an engineer, a mechanical engineer. In fact, I worked on the Viking probe that landed on Mars in 1976. So I am somewhat unimpressed by the current landing. Given that that one was 44 years ago. So my point is, I would offer this: if you’re a CEO, you live in two worlds. The investors – they live in the world of tomorrow. Wall Street is all about tomorrow. And so you hear them talking about all this stuff in the future. Education in a lot of ways is about tomorrow. But a manufacturer, the associates, and the customers are about today. So part of the task for me is to balance those.
And, you know, we see the changes. We’ve put dozens and dozens of robots just in our Milwaukee plant. But we haven’t reduced employment at all. In fact, we’ve expanded employment. In the Atlantic Monthly, Derek [Thompson] wrote an article about world without work. The subtitle of this article was, “The robots are coming! The robots are coming!” Sort of a play on Paul Revere, you know. But in reality, he closes the article by saying, we won’t see the next car repairman, a robotic car repairman for many, many, many, many, many years. And that’s right. So nonrepetitive tasks, which have to do with customization of products, insulate you from all that change.
But I think there’s a way to think about this. You see, I’ve been around long enough so that I know that forecasted singularities are common. Many do not come to fruition. And those that do proceed to the present in uncertain time constants. So I am very uncomfortable with the idea of building for the jobs of tomorrow. I don’t know when those jobs are going to come. By the way, there are 473,000 open jobs today in manufacturing that we can’t fill. So I’m looking to fill the jobs of today. Not necessarily tomorrow, I’ll take care of tomorrow when it comes.
You know, if you want to, if you want to talk about the speed of technology, I will tell you this is that some people asked me, when did you want to become an engineer? I know the exact date: May 21, 1961. Yuri Gagarin for Russia had orbited the Earth. John F. Kennedy stood before a podium and said, we’re going to the moon by the end of the decade. That’s when I decided to enlist in Americana. And we made it to the moon. At that time, 50% of the trials to launch a satellite had blown up on the launching pad. Satellites overhead for America were the size of a grapefruit. And yet we went to the moon in eight years. How long we had the iPhone? 14 years. So in other words, we’re not so intimidated by new technology. We put it in, but I don’t think there’s any reason to get excited about it.
What we realize is – here at Snap-on – is we want to go to tomorrow, but the path to tomorrow leads right through today. So my message for educators are I want the jobs of today, tomorrow will take care of itself, as far as I’m concerned. And we’ll train and we’ll adjust. And we do this; we have training in each of our organizations. So that’s the way I see it. And I think it’s not going to impact manufacturing or any technical jobs. Because what’s going to happen is there’s going to be more customization. We hear that all the time. That’s the characteristics of this information revolution is that we’re gonna have more customization, and therefore it’s going to be hard to robotize those technical jobs. There’s going to be more and more of them. That’s our experience.
And that’s a perfect answer and talking about that inspiration of becoming an engineer. And you know, the John F. Kennedy speech – by the way, one of my favorite speeches probably in history. And I’ll add to your example, because I use this example all the time. He said, we’re going to go to the moon. But we’re going to go not just because it is easy, but because it is hard.
And that American spirit and saying that, look, this isn’t going to be an easy pathway. And there are risks and there will be risks to human life and safety, there will be risks to the competitive spirit that we may not stay ahead of the folks that we’re trying to get ahead of and stay ahead of in other countries. But we did it. We did it because it was hard. And we did it because of the American work ethic and American ingenuity. And I really appreciate that example that you just shared with our audience.
Think about it. They did it in two thirds of the time we’ve been using the same iPhone.
Absolutely incredible. It’s a lesson of if we set our mind to it collectively as a nation, what it is that we can accomplish.
What Makes America Unique?
And that really leads into the next question, Nick, that I have for you. Now you do business all over the world – I think at last count over 130 countries, across the globe. You see all kinds of cultures. You see all kinds of political environments. You see all kinds of workers. In your mind – in the same sense that America was unique back in the days of John F. Kennedy, and in terms of accomplishing that great goal of getting to the moon and putting a man there – are we still unique as a country?
Absolutely. This is the greatest country in the world. I don’t care about politics. I suppose that people might say I’m maybe taking a side or something like that. No, this is the greatest country in the world. And I know because we have factories all over the world. And I traveled to many of them. You know, if you think about it, we have twice as much paved highway; we have more freedom, more range of opportunity than any place in the world, even today. There are 15 million people waiting to get in for green cards. That’s three times as many as any other country. So those people must know something. Now, of course, there are problems. But there have been problems since I was a kid. The problems change, but there are always problems and we work on them.
The one thing has changed is, you know, years ago in the 60s and certainly at the turn of the century. One of the things is you know, that America’s ascendance – I like to say this all the time – is based on two things: the brilliance of the few and the efforts of the many. And you have brilliant few like like Henry Ford or Professor Bodeen, who invented the transistor. But they couldn’t have brought those inventions – either the assembly line or the transistor – to fruition alone. They had to get commercial amplifiers and they chose the greatest commercial amplifiers of the day: the American workforce. The idea of Americans and their dedication and commitment and energy was ascendant.
The difference today, I think, is that other countries have modernized and become more educated. And so when you go to our factories in Shanghai, or Minsk for San Paulo, you see dedication and energy and capability. So that’s why the upskilling of the American workforce clearly becomes the most differentiating factor. In the competition to be the amplifier of those inventions, those innovations, we need to be better educated, more capable, able to take more variation, which is the most important thing. Let others do the standard and repetitive stuff. The robots might do that anyway. But variation is what we’ll be able to do and that has to do with the capability.
I like to say at Snap-on – we say this all the time – people talk about process, and process is important. We have an ingrained in our blood. But the difference is instinct, the intellect of the people that are able to adjust and deal with that 20% of situations where you can’t predict them. They’re not standard. That makes the difference. We think the American workforce is still the greatest in the world. You know, I love to say this quote. And so I apologize for repeating it again, because I said it many places, but I will again: people look at our future, and they wonder about the American prosperity. And they say that the American worker is a question. I say the American worker is the answer. Because if we upskill them, they will defeat anybody; they will defeat anybody. And that’s an important thing.
We find that at Snap-on. Snap-on, we make in the markets where we sell and our biggest sales are in America. So when you see a Snap-on van rolling around – and we have 3,500 of them floating around the US – 80% of what we sell off of there is made in America, right here. And a hand tool is like 50% labor. And somehow we’re able to do that. And it’s because of the capabilities of our people. We train them. And we get them to be able to deal with that variation. That makes us competitive.
Now, for us, I just had to add one last thing to roll in. A big company like Snap-on can train their own. But if you look at American manufacturers – there are 243,000 American manufacturers – only 3,900 have more than 500 people, 75% have less than 25 people and they cannot train their own. This is why community colleges have such a great role. Such great importance, because the soul of American manufacturing; the soul of the makers and fixers have to do with those small little points of light, less than 500 people, less than 25 people, or employing people and dealing with those variant tasks. And they need the training out of community colleges. And if they can be upskilled we’ll continue to be prosperous.
How Should Manufacturers Think About Upskilling Their Workforce?
And your answer there Nick actually elicited two questions for me. One of them is about our technical colleges, and we’ll get on that in just a moment. While we think about the importance of upscaling the American workforce – and you talked about upscaling meaning putting more vehicles in your parking lots. And I will tell our audience – they probably already know this – you drive by a manufacturing parking lot that is upscaling, and there’s not just a lot of vehicles, but a lot of nice vehicles. Because those people are being rewarded incredibly well for their hard work and for their intelligence and for the value that they’re adding to our economy. We need to continue to upskill those people as well. You’ve touched on that several times in our discussion today. In general, are American manufacturers looking and thinking about their role in upskilling the workforce the right way? Or do they need to change how they think about that?
Gee, I think American manufacturers are receptive to this kind of thing. I think there are a couple of problems. I think one is we have generally an in-house schooling, usually in cooperation with the local community college, in our facilities all over. And we have a number of different programs to try to keep our people rolling. But I think all manufacturers are looking to do that. First and foremost, though, they’re looking to fill the 473,000 jobs they can’t fill right now. So it’s not even a matter of upskilling the people in our own factory, they’re trying to find this.
And the first thing is – the first step there, I think – is to try to match the curriculum. And I think business and education, community colleges need to work together. And this is why I like the path to tomorrow leads right through today. We’re talking about the skills of today. The skills of tomorrow…talk to me about it tomorrow. I need to fill my jobs today, and therefore I want you to match those things. Now Bryan Albrecht – the brilliant Bryan Albrecht, I might add. He should be governor, by the way. I would say I’d say Bryan Albrecht should be governor.
I’d vote for him.
I vote for him. But anyway, he and a bunch of Snap-on people came up with the National Coalition of Certification Centers. The idea that companies would band together with a group that would certify certain procedures and use a certain Equipment around the country and various community colleges. Now I’m proud to say, you know, we’ve done over 200,000 certifications. And we now have more than 600 colleges that are doing Snap-on certifications, and 630 in the whole system. Efforts like that I think are very important: to try to match the curriculum to what the local businesses actually need. This is absolutely important. And so I think American manufacturing is receptive to that. And if they are not, they’re crazy, because they’re not filling our jobs. And they got to know that they have to have people that have some runway to change over the future. Things will change. They have to keep training their people adjusting their people, and they want to adjust to that.
How Can We Change Society’s Perception of Tech Ed?
So matching that curriculum to the needs of the employer. So very important, third party certifications like NC3, and I know you’ve been a huge proponent, as has your entire company, really, really important as well. The other thing I always wonder about Nick, is how do we change the perception of Americans about the role of technical education? Many of us understand the great things that are happening at places like Gateway and in technical and community colleges all over the country. But are there things we can do to change that perception of the role of Tech Ed?
Well, I think we’re winning that battle from time to time. I, you know, I have hopes with the new administration. You know, President Biden’s wife is teaching at community college. So I think that he would be fertile ground for trying to do this. I’ll say a couple of things. One is we have to act ourselves, like these jobs are special. You asked me about talking to the people in the factories. One of the things that Snap-on is about: we recognize that the Snap-on brand is the outward sign of the pride and dignity that professionals take in their jobs. And when we talk to professionals, or we market to them, we always market in a way that they are doing something special. We want to help them do that something special. And I think that people in technical colleges or anybody who wants to support this idea of expanding our technical base ought to keep that in mind. And management is always the idea of walk the talk. Well I say: you have to talk the walk. Actually I learned this in Vietnam is when people look for leaders, and they look for them to keep reinforcing that a certain concept is true. I think people who would try to reinforce the idea or restore the pride and dignity of work ought to keep reinforcing that; all they talk about.
Secondly, I think we ought to demand our leaders speak that way. We ought to demand that they speak this way. You know, there’s a lot of discussions about oh, yeah, I just slighted this group or that group? Well, technical education really is an important group. I mean, the people in technical careers are an important group. And sometimes leaders slight them in things like, you know, ways in which they don’t even realize. Like you got to go to college; we have to fund four year degrees. Baloney! You don’t have to do that. And that in itself is hurtful to the cause. We need to kind of do that.
And then secondly, we want to get direct support for upskilling from the government. And my suggestion is we need to demand that they not only endorse what they support in thought, word and deed. To have a guy, look, every idea that comes into my office is a good idea. All the crazy stuff gets eliminated before it comes in. Really, it all gets eliminate everything is good. Same with people in Washington or in state capitals. But you can’t support them all. You can endorse them all as good ideas, but you can’t support them all. Because you don’t have the capital, you don’t have the energy, you don’t have the focus. And so you need to select certain things. And we have to kind of insist upon that: that leaders of this country do more than endorse things. They support them. And do not sacrifice the interest of technical education on the altar of what they consider to be higher priorities because we believe this is the highest priority.
One of the things I would say to your audience is – I love to say this audience as I speak to – do they actually believe upskilling the American workforce is the highest priority? If they do not, then we are lost.
Without question. And I can tell you at The TechEd Podcast for sure, that is our highest priority. We’ve designed an entire mission around securing that American Dream for the next generation. And upskilling both our current workforce and our future workforce -absolutely integral to helping people accomplish that dream, Nick, as you defined it, which is being safe and dry.
This is the most difficult thing, because unless we can get people to have their dignity and respect back. Unless we act like that, people will try to gravitate toward other professions. And that is what draws people to other professions and many times as the Liberty Economics shows in the data, they waste their lives doing it. They’d have a much better life and a much more satisfying life if they went to community college and got a skill.
How Should Education Prepare for the Future?
Perfectly said. We’ve got time for one more question with today’s just phenomenal guest: The Chairman the CEO of Snap-on, Mr. Nick Pinchuk. Nick inasmuch as our audience is comprised of so many technical educators across the United States, in some cases from from outside of the United States, what is one thing you would tell our nation’s technical education community that they should put at the forefront, as they plan for the future of their programs?
I think they should seek cooperation with local businesses – particularly manufacturing – but any local businesses, so they match their curriculums. And the thing is, is going to school about an education or about a career? Is it about creating a life or just creating awareness? I believe it’s about creating a life; it’s a rite of passage. So they should kind of look at that. I think this goes together.
It’s not what I would ask them to focus on. It’s what I really asked them to remember. What they do, what these great people do, has never been more important. They can see it written across the landscape of America and the world, in this years of the great withering. A once in 100 year challenge. And yet the people who are technically educated rose to create the substrate that allowed our society to maintain itself. Even as so many people have had difficulties, we’ve maintained our society, because of what you do. I want you to remember that. What you do is never been more important and more urgent, we want to keep that going. Because it is, after all, under somewhat of an attack. People say the future is a future without technical education; don’t believe it. It’s not about that. You have to be confident in that.
It’s not for me to lecture to you, I just want to make sure you understand that there are others that realize that what you do is so important. And I would like you to carry that out. And imbue that on your students, because they will be the heroes of the next crisis. You ought to tell them that they are special. You’re special yourself and you ought to tell your students that they also are special. That’s my message to them.
Special and heroes of the next crisis. We’re gonna leave it right there, Nick. I couldn’t have said it better myself and I’m not going to try. Thank you so much. Nick Pinchuk, Chairman, CEO of Snap-on for being with us for being with our audience here on The TechEd Podcast today.