An Interview with Hernan Luis y Prado - founder of Workshops for Warriors
7investing

An Interview with Hernan Luis y Prado – founder of Workshops for Warriors

Advisor: Daniel Kline

As we sit on the eve of Veteran’s Day, Dan Kline welcomes Hernán Luis y Prado, founder and CEO of Workshops for Warriors (WFW), Workshops for Warriors is a State-licensed, board governed, fully audited 501(c)(3) nonprofit school that trains, certifies, and helps place Veterans, Wounded Warriors, and Transitioning Service Members into advanced manufacturing careers. Students earn nationally recognized portable and stackable credentials.

The program addresses two major needs. First, it helps fill open manufacturing jobs. These are positions that companies need to fill in order to manufacture within the United States. Second, Workshop for Warriors helps veterans find a successful career path after their military service ends.

Why is this important for investors?

 

There are expected to be 2.4 million open highly-skilled manufacturing jobs in the U.S. over the next decade. WFW has partnered with companies including Ford (NYSE:F) Qualcomm (NASDAQ: QCOM), Boeing (NYSE: BA), and many others to help train veterans to fill those rolls.

This shortfall, however, is a bigger looming problem for American manufacturers than one non-profit can fill. Understanding what’s being done, where demand stands, and what still needs to be done may change how you view manufacturing and the changing job market — two key areas for investors to focus on.

A Navy veteran himself, Hernán understands how veterans can help solve this problem and why it’s important for the U.S. to build back its manufacturing capacity.

Interview timestamps:

0:02 Introduction

0:45 What are the problems that Workshops for Warriors is addressing?

2:06 Discussion of training and the education system in the U.S.

2:47 How did Workshops for Warriors start?

4:20 Hernán talks about the risks he took to start the program.

5:26 How long did it take to get the first success for WFW?

6:45 Do American companies agree that more manufacturing needs to be domestic?

8:45 How does WFW work with U.S. companies?

10:10 WIll American-made goods cost more?

11:11 How far has WFW come?

13:06 Are we at an inflection point for how companies hire people?

14:30 Is the college degree going to become less relevant when it comes to hiring?

16:14 Closing

 

Transcript:

Dan Kline  0:02

Welcome to the 7investing podcast. I’m Dan Kline, Lead Advisor for 7investing. And I’m honored today to be joined by Hernan Luis y Prado, founder of Workshop for Warriors, an organization that provides quality training, accredited STEM educational programs and opportunities to earn third party nationally recognized credentials to enable veterans, transitioning service members, and other students to be successfully trained and placed in their chosen advanced manufacturing career field. Hernan, thank you for joining us today.

Hernan Luis y Prado  0:34

Dan, thank you so much for what you do, not only for our veterans, but for everyone in the nation that wants to invest in, you know, to solidify a better financial future for themselves and their family.

Dan Kline  0:43

So we’re talking today, because Veterans Day is coming up, and that gives us a timely hook. But I’m always thrilled to be able to talk to you, and I want to get into what your organization does. But first, I want to get into the sort of dual demands that caused you to create it. Let’s start with the first part of the equation. The lack of qualified workers for highly skilled manufacturing jobs in the US. How big a problem is this?

Hernan Luis y Prado  1:05

It is a tremendous problem. We have 2.4 million unfilled jobs that will be unfilled over the next 10 years, with over half a million that are currently unfilled. So if you look at this demand signal from the American economy that desperately needs to have critical manufacturing jobs filled, and we’re seeing it right now, and it’s COVID, right? We don’t have facemasks, we can’t produce vaccines, we have medication that is being outsourced. This is an opportunity that America can embrace, to bring manufacturing back to the United States and retain her manufacturing independence. That’s one of the sides of this perfect storm. The other one is you have over a million veterans that are leaving the service over the next five years. What a perfect pool of talent to get this core group of people that have already proven that they can serve, that have demonstrated they have integrity, that demonstrated that they know how to show up on time, give them accelerated training, an opportunity to earn nationally recognized credentials, and then put them into careers throughout America.

Dan Kline  2:05

Is this a fault of how our education system is set up that we’re just not set up to train for these types of jobs?

Hernan Luis y Prado  2:14

Well, America has done this before. We’ve done it in World War One. We’ve done it in World War Two. It’s not such a fault as a change of focus. We’ve been really focusing on a university college education, we’ve been focusing on the service sector on the financial sector, and services and financial sectors are great. But the underpinnings of every advanced societies as the Egyptians has been, a very robust, competent and advanced manufacturing capability. And we are at risk of losing that this is our opportunity to regain it before it slips away from us.

Dan Kline  2:47

So I want to get back to this. But let’s go into sort of your origin story. We’ve talked before on another platform, but a lot of our audience here does not know your organization. So take us through the Genesis. You didn’t start out wanting to do this, you sort of in a very risky way came to it. Why don’t you tell us that story?

Hernan Luis y Prado  3:03

I’m happy to the I’m a Navy combat veteran, I served in Iraq and Afghanistan, I love the Navy, I would have stayed in 40 years if I could. But when I came back from one of my combat tours, I saw so many veterans and friends who were struggling to find purpose as they transitioned to civilian life. And I thought, what a shame. You’re intelligent, motivated and resourceful people that were desperate to contribute somehow. And they wanted to continue serving their country. They just didn’t know how. And I thought, well, we’ve got to do something. And finally, we had this inflection point in 2008, where we sold everything that we had to start Workshops for Warriors and provide opportunities for these men and women, and also solve the advanced manufacturing crisis that’s hurting American competitiveness. So we are at this critical moment now. And I’m happy that in 2008, when we started it, that we were really seeing that this was happening, it just got accelerated faster than we thought. But it’s key to have Workshops for Warriors as right now we’re the only credit and training infrastructure that can be nationally scalable. And that’s really what we’re interested in is growing this national training pipeline.

Dan Kline  4:20

So most people who sell everything they have in the pursuit of a dream, it’s a for profit dream. You sold everything you have to start a nonprofit. What was kind of the business plan there? How did you think was business gonna pay for it? Where you’re gonna get government to pay for it? Was the military gonna pitch in sort of what was your thinking as you started this?

Hernan Luis y Prado  4:39

Originally, I thought this was something that made so much sense that I would start it, someone would see it, they’d pick it up, and I could go back to the Navy. That was originally when I thought because that was in the Navy until 2013. So I did this while I was in active duty, and I thought somebody will definitely pick this up. But it turns out, it’s almost like if you were to provide free roadwork, if somebody just started building a highway from Washington, DC to San Diego. And, you know, every day you pass by and said, “Hey, great job, great job. Can you build a spur to Texas?” You know, I just thought somebody would take over and they haven’t yet. So until they do, I will be doing this.

Dan Kline  5:20

So those first few months could not have been easy. How small did it start? How did you scale up? And sort of when did you have your first success where you found a veteran, and you got him into that first job?

Hernan Luis y Prado  5:32

So it was a lot longer than that. It was literally years before we had a success, because nobody would even look at you until you had dozens of people through your program. And there are 45,000 nonprofit organizations in the US, (and) about 2% of them have revenues of over a million dollars a year. So until you get to the stage where you’re big enough, and you have enough data to support the efficacy of your programs, you’re really just kind of churning, you know, relentlessly moving forward on your mission. But, you know, I’ve luckily I have a really data driven life. And I’m an engineer by training. So it was important for us to have clear metrics, clear goals, but it took us a couple of years to really start getting traction.

Dan Kline  6:17

So you’re solving two problems. One is that obviously these veterans are great workers who need a place and need the training and are clearly going to do a good job. I’ve hired veterans, they’ve always, you know, been all the things you said. They know how to get to work on time, they know what they’re supposed to do, they come in a little bit more mature than I would think your typical worker. But the second problem here is one of kind of national security, if all of our manufacturing is done overseas, that puts us at great risk. Have you seen American companies sort of embrace that at least some of their capacity needs to be here?

Hernan Luis y Prado  6:52

So I have. The challenges is it’s not a simple solution. And Americans are pretty smart. But this is an issue that is happened over the course of 70 years. Literally the the spigot for American advanced manufacturing training was turned off about 70 years ago. And now it’s a very complicated issue where not only do you not have the right training pool, because the median age of our workers until recently was 58 years old, you have almost like a bathtub effect of very young people entering the workforce. And then more senior people exiting, and there’s a huge gap in between them internally. We call this a silver tsunami of people that are exiting with no one to fill their place. So you need to simultaneously create an expanded training pipeline that’s nationally scalable and repeatable, which is what Workshops for Warriors does. And then for companies, you need to bring back a lot of the manufacturing equipment, and technologies and infrastructure that you needed. So the government subsidizes national shipyards, but all of their vendors are manufacturing companies. And they also need to be subsidized that will create almost like a New Deal 2.0 to find a way to rebuild America’s manufacturing engine. And that’s what we’re on the cusp of.

Dan Kline  8:11

My family business does significant sales with that. With scaffolding, when they they dry dock nuclear subs, they have to destroy all the scaffolding after. It’s very low margin, and very few companies will do it. It is tricky, tricky business to do. But it is a company that makes steel scaffolding in New Hampshire that buys when we don’t make from another company in Zelienople, Pennsylvania. Two very small companies, not a lot of capacity to do that type of work. So this is near and dear to my heart. So do companies work with you? So I know one of the things is you can get someone sort of a minimal level of training, they get a job and they keep training as they go, how many different companies do you work with? And sort of how do you communicate sort of what are the needs? And you know, what should people be training? Do they help you design the training? That’s a long question, so I’ll let you answer.

Hernan Luis y Prado  9:02

It is and let’s see. In short, the the diversity of our partners really speaks volumes to the severity of the issues that we’re facing as a nation, and the issues that Workshops for Warriors is solving that we partner with Reliance Steel and Aluminum Company, with Ford Motor Company, General Dynamics, JP Morgan, the Boeing Corporation, Facebook, Verizon, Walmart, SpaceX, Tesla, Marathon, many more. Not only as donors, but as employers for our graduates, because they know that for every dollar spent on their manufacturing job, $2.74 is organically generated in our economy. And that for every manufacturing jobs that’s created in America, 20 additional jobs are created to support that job. So the key thing is when we’re creating jobs, we partner with some of the biggest names in the world because our goal is to train, certify, and place people with nationally recognized credentials, because they generate significant economic impact. And businesses across every industry realizes.

Dan Kline  10:14

How much of the challenge is getting the general public to understand that that making things here doesn’t necessarily mean they’re going to be, you know, three times the price.

Hernan Luis y Prado  10:25

You know, that is, that’s a great point. There will be an initial bump in pricing. But that can easily be overcome with like your purchase agreements, or with Americans realizing that everything worthwhile takes a little effort, and takes a little time. And until we can re shore our manufacturing capability, until we can expand our national training pipelines, it’s gonna, it’s gonna make it so that every American has to put their shoulder to the wheel, it has to help a little bit. And that’s by voting with their dollars to pay a little bit more for something until that small business is able to generate enough capital or amortized equipment, or get a bank loan, then that’s what we need to do that.

Dan Kline  11:13

So let’s talk a little bit about your successes. Started from nothing. Where are you now? How many people are you training in a given year?

Hernan Luis y Prado  11:20

So we train about 200 people a year through our program, and with enough funding from some of your listeners, we’re pushing forward on a $11 million expansion that will be completed in October 2021. That will enable us to go from 200 graduates per year to 486 graduates per year. That’s literally 11 months from now. And there’s a huge demand signal. We have over 16,000 job offers for every one of our graduates, and 1.1 million veterans that are leaving that want to join our program. So our biggest pain point is growing that throughput.

Dan Kline  12:01

So tell our listeners tell our viewers depending how people are watching this, if they want to help, even if it’s a small donation, or maybe we’re lucky, maybe the CEO of a big company is watching. If somebody wants to get involved, they want to make a donation, they want to help they want to help you scale this, what can they do?

Hernan Luis y Prado  12:17

They can go to WSW.org. And they can donate knowing that 85% of all monies earned, go straight to training programs, and they can also call at 619-550-1620 to donate. Or if you’re a veteran or active duty person within six months of leaving the service, call and see how you could potentially enter into one of our classes. The more people we put through the program, the more we’re able to rebuild America. And that’s our goal to rebuild American manufacturing one veteran at a time.

Dan Kline  12:53

So let me ask a question I mentioned. We have two veterans on our team. And they’re both, you know, people who came up in the ranks in terms of being financial analysts as well. But do you think in this sort of day and age where I think we’re seeing some hiring changes, we’re seeing Google being willing to hire people based on certifications that they’ve created? We’re seeing IBM being really willing to hire people without traditional degrees. Do you think more companies should just be open to the idea of bringing in a veteran and you’re getting, you might have to train the person, but you’re getting someone who understands how to train, they’ve gone through lots of specialty trainings throughout their military career?

Hernan Luis y Prado  13:31

I could not agree with you more, you know, veterans are an amazing talent pool. We’ve literally never had a complaint from any of our employers from hiring a veteran, because you have people that are the top 1% of Americans that were able to actually be eligible for admission into the Department of Defense. They’ve made it through, they were discharged. And that’s a good word. That means that they separated from the service on with an honorable discharge. These are people that are proven their commitment to serve, they’ve proven that they can show up to work on time, drug free, that can commit to your vision, and they can communicate well. So these people are great. All they need is relevant training, nationally recognized credentials, and they take off. And again 94% of all of our graduates have been placed and retained in full time jobs.

Dan Kline  14:23

So this is a bigger problem than you can solve alone. Does -I know this is a big question. I’m not a giant believer in the American education system. I went to college. It probably wasn’t the right choice for me. I’m much more of a worker than I am a doer. Do you think like business in general we need to be questioning this? Whether apprenticeships and other sorts of trainings, and trainings like yours could be an exception. I struggle with this because I have a son who’s not as academically bent as my wife is, who has a PhD, and I’m pushing him towards like, go be a plumber, go do something where like you’re out and about. You don’t want to sit at a desk, you don’t want to want to. Is there a prejudice we have to get over or a societal change we have to make we’re so much value is placed on the college degree?

Hernan Luis y Prado  15:10

That’s the that’s a great question. And the answer is that it takes everyone. Like works out for you specifically. Focuses on advanced manufacturing, training, vocational training, because we want to be the vanguard that helps rebuild America. But there is a tremendous need for colleges, vocational schools, trade schools, junior high’s that will build up all of the other people that need to supplant the people that are about to retire, and to help bolster, strengthen and advanced America’s manufacturing sector. It really takes everyone and I think companies are seeing right now that the the idea of bringing somebody in that has some type of nationally recognized credential is is very, very helpful, and that they might not need that college education to do a job that could be could be filled as somebody that has some type of accelerated training that culminates in a credential that tests the retention and application of knowledge, and we’re seeing more and more of that

Dan Kline  16:11

Hernan. Thank you for doing this. We’re been talking with Hernan Luis y Prado. He is the founder of Workshop for Warriors. This is a great organization. Hernan, once again, as we close out here, just tell people where they can find you on the web.

Hernan Luis y Prado  16:23

Thank you so much. We’re located at WSW.org And we welcome emails at info at WFW.org, or call us at 619-550-1620. And again, our goal is to rebuild American manufacturing one veteran at a time. We’ve been doing this since 2008. And thanks to the generous support from individual donors and organizations, we’ve grown to become the number one advanced manufacturing training school for veterans, wounded warriors and transitioning men and women. Thank you Dan, and your listeners, thank you so much for having us on

Dan Kline  17:02

And Hernan I would say thank you for your service but the reality is that sounds like it’s you already served, you’re continuing to serve, this is just a different type of service. You’re doing something very valuable for the nation and and I thank you for it. That’s going to be our show. Thank you for watching. This was the 7investing podcast you might be watching this on video. So it’s also a videocast. We do this every Tuesday and Thursday. Monday, Wednesday and Friday. I host 7investing Now – our live show. So please join us across all of social media, our YouTube channel, and of course check out 7investing.com/subscribe to get access. You give us $17, we give you our seven best stock picks a month. We’re a small team. You get one on one one, not one on one group meetings with us, private meetings where we can really answer your questions. We can’t give you personal investing advice, but we could certainly answer your questions about the markets about trends again. For Hernan, I am Dan Kline, we’ll see you down the road. Thank you