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Small Manufacturers on Hold

November 1, 2003
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LIVONIA, MI-As the Bush administration prepares to release a manufacturing initiative, small manufacturers are urging the administration to support one of the U.S. Department of Commerce's own programs-the Manufacturing Extension Partnership (MEP)-and to maintain MEP as an essential component of the administration's effort to bolster the competitiveness of American manufacturers.

According to MEP, the United States has lost more than 2.3 million manufacturing jobs since the recession began in March 2001, and more than half of those jobs have been lost since the recession officially ended in November 2001. American manufacturers are losing work to competitors in low-wage countries and are looking for ways to make themselves more competitive.

"MEP services are either not offered by anyone else, or they tend to be priced beyond our means," says Rolf Albers, chairman and CEO of Albers Manufacturing Co. (O'Fallon, MO). "Our ability to create and maintain sustainable manufacturing jobs in Missouri and the rest of the United States is at stake and organizations like the Missouri Manufacturing Extension Partnership are desperately needed."

Secretary of Commerce Donald Evans recently singled out innovation as the competitive advantage of American manufacturers, noting that manufacturers have adopted lean manufacturing techniques, reached zero-defect quality targets, provided customers with value-added products and learned new management methods for their supply chains.

"MEP works with small manufacturers to achieve the very strategies identified by the Secretary," says Mike Wojcicki, president of the Modernization Forum, the group that oversees the MEP system. "Independent studies show MEP clients reduce costs and achieve lean and quality improvements at a far greater rate than other small manufacturers. MEP offers a hand up, not a hand out, so our smaller manufacturers can compete with companies overseas."

MEP has received approximately $106 million in federal funds for each of the past five years. The administration has recommended cutting funding to less than $13 million next year, which would end federal funding to MEP centers in all but two states. Congress restored funding for MEP last year, but has yet to determine funding for fiscal year 2004.

According to the MEP, thousands of manufacturers have written the president pleading for MEP support and the official response has been that "[t]he original legislation that created the MEP program called for a phase-out of federal monies to MEP centers after the six years of funding." However, Congress eliminated the sunset clause in 1998.

"That's not a very defensible position. The president surely wants Congress to lift the sunsets on his tax cut packages. Congress took decisive action to repeal the sunset provision for MEP funding back in 1998, because of MEP's incredible results for small firms," states Wojcicki. "With his manufacturing initiative, the president has a chance to show our small manufacturers and their workers that he's serious about helping them."

MEP forms a network of centers with 400 locations across the country and Puerto Rico providing technical assistance and business support services to America's small manufacturers. These not-for-profit centers employ more than 2,000 professionals who work with manufacturers to help them adopt and use the latest and most efficient technologies, processes and business practices.

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