Siemens PLM will give more than $1 billion of in-kind software grants for manufacturing programs at community colleges and universities in Virginia. Students will have access to the same Siemens product lifecycle management software used in global manufacturing.
The series of in-kind grants was established as a result of an industry need for skilled workers and is designed to support the state's largest industrial employer, Newport News Shipbuilding, a division of Huntington Ingalls Industries, and other companies with local ties such as Rolls-Royce. The grants are part of ongoing workforce development collaboration among community colleges, universities, and organizations; the Virginia Manufacturers Association; and the Southern Virginia Higher Education Center -- an organization that provides workforce training to the rural population.
The educational grant program in Virginia is the latest in a series of grants Siemens has given to schools in an attempt to create a skilled workforce for manufacturers. Bill Boswell, senior director of partner strategy at Siemens PLM, told Design News:
Our in-kind academic grant program has been in place for 12 years. In an attempt to get our technology into the hands of students, we have given more than 12,000 grants over the years. The goal is to create a pipeline of highly trained students who know PLM technologies, so our customers can find that next-generation workforce. The reason we're doing this in Virginia is we have universities, community colleges, and customers in the area.
Siemens is trying to combat a global dearth of workers skilled in manufacturing technology. "There are 10 million engineering shortages and unfilled manufacturing jobs around the world," Boswell told us. "The majority of those shortages are in India and China, but the US comes in third. A lot of those jobs require skilled production workers who get their information in 3D. We need people who know how to use this technology."
Concentrating on a particular state in order to meet its skilled-worker needs is not new to Siemens PLM. "We have actually done a few educational grant programs that were state-oriented. We did one for Massachusetts. We worked with Massachusetts' economic development to help them get certifications in place," said Boswell. "That program involved $650 million in grants, and it included technical high schools and community colleges."
The growing need for skilled plant workers in the US is fueled in part by the tapering off of outsourcing and the reshoring of US manufacturing. "Manufacturing jobs are coming back onshore as we see more and more advanced manufacturing. States are trying to attract more manufacturing, so we're seeing more requests for educational support," said Boswell. "We work with our customers to help us find the opportunities. More and more, states are coming to us with a consortium of schools they would like us to support."
While $1B may be the "commercial value" of the gift, it will not be the "writeoff" value to the government for tax purposes. The writeoff has to be justified by the cost basis, not on some assigned value of the software. This is for sort of obvious reasons. Any company could effectively wipe out all profits by giving things away and assigning higher than cost basis values to them.
For example, I could pay some developer $5000 to write some software. I could try to sell (license) the software for $1000 per copy. I could give away 10 licenses to some college, and try to write off $10,000. That won't fly. I would have to prove that I have $10,000 of unrecovered cost in the software. (you have to actually spend money to write it off)
If Siemens isn't actually spending $1B to give the software away, they can only write off what they can show as cost basis.
Battar, there really is value involved here. This is not play money. It is not what the company forgoes, but the commercial value of the "gift".
While I fully support this type of activity, the reality is that the companies could take workers with the required background and train them is using the 3D software. That is what companies used to do.
By Siemens PLM giving the money in software to colleges, the company is establishing a future work force that is capable of taking technology to another level. The move also tends to fill the lack of engineering workforce by making sure all the jobs are taken by highly skilled workers not just students who have graduated as engineers. Manufacturing in plants will be taking place at a high rate.
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