Manufacturing companies are facing a "ticking timebomb" of ageing workers and lack of skilled apprentices entering industry, it has been claimed.
Drastic action will be needed to address the looming skills shortage if British firms are to move up the value added chain and compete, the Midlands branch of the Engineers Employers Federation said.
More than half of the engineering and manufacturing firms in the region face this problem, which will worsen unless urgent action was taken, the EEF added.
Ian Smith, chief executive of the EEF West Midlands, said: "It is a great concern that not enough engineering apprentices are being trained.
"There is a demographic time bomb ticking away. Many of the staff are closer to 50 than 40.
"The proposed changes to age discrimination laws may help some firms a little by allowing them to keep employing older staff, but we are not putting enough trainees into the system."
Mr Smith said around 2,000 apprentices needed to be trained in the Midlands every year, which was nowhere near being realised, while more government help was needed.
He said: "We are only training about 300 a year. It is a huge gap."
Bill Nicholls, director of training and education at the EEF West Midlands, said manufacturing had a higher proportion of older workers than almost any other sector.
He said: "The Learning and Skills Council published a report in 2004 which revealed that more than 30 per cent of workers in manufacturing were aged over 45. This figure is probably more like 50 per cent now."
Mr Nicholls said the problem had been triggered by the embrace of new technology and increased competition from the Far East.
He said: "Firms need fewer people than they used to, so they are trying to hang on to their more experienced staff.
"The danger is, what happens when these people retire? Engineering and manufacturing is not seen as particularly light work and most people do retire at 65. There will not be enough people coming in to take their place." Mr Nicholls said the problem affected more than half of the engineering and manufacturing firms in the region.
He added: "Companies tend to think they are not big enough to take on an apprentice. There are some at certain small companies but not enough. On other occasions, the firms have been going through periods of uncertainty, which tends to give off the message to managers 'do I need the long-term three or four year training. We might not be here at the end of it all."
The British commitment to long-term training paled when compared to our European rivals, Mr Nicholls said.
"I visited the Audi factory in Nuremberg last month. That company employs 50,000 people, 3,000 of whom are apprentices.
"All the large companies in Germany have this, Siemens, Audi, VW, BMW. Our large companies don't.
"MG Rover, for example, before it collapsed had 6,000 employees but only 88 apprentices. Really, we are not in the same league when it comes to thinking about skills.
"It is very damaging for the long term. There is belief that just enough is good enough, rather than investing in proper training and development of their workforce."
The costs need not be prohibitive, with group training schemes and links with education providers, while many of the apprentices proving their value over and over again, said Mr Nicholls.
He said: "For the first nine months of the training the investment is simply a weekly wage, and as soon as an employees is employed, they start to repay the outlay.
"Firms benefit from training their own staff. It is about the quality of the products they produce but also it means they can use their people in a more flexible way in the firm.
"If the staff have more skills, it means they can work on higher quality products which is exactly what UK manufacturers need to do.
"We need to compete as a knowledge based economy. That is the future - design-led with high quality, high value products. We cannot compete on cost any more. We need investment in new equipment, technology and machine tools, but also in the workforce."