MEP funding bid Increase still in limbo

May 24, 2010
| By Pete Daly |
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Michigan Congressmen Vern Ehlers and Gary Peters are hopeful for another chance soon to get a bill passed in the House to increase funding for the federal Manufacturing Extension Partnership program.

The proposal, which would reduce MEP cost to the states and to the small- to mid-size manufacturing companies that use it, was in the America COMPETES Reauthorization Act that failed to pass the House last week.

The COMPETES package of legislation promotes U.S. manufacturing, supports high-tech R&D and would help improve science and math education. It failed to get out of the House in mid-May due to partisan wrangling over issues not related to the MEP funding; an opponent did not want funding in the bill to pay salaries of federal employees caught looking at pornography on their government computers.

The bill was suspended while amendments were added to limit the bill's programs to three years instead of five, and to include the language about pornography and government employees that was demanded by House Science and Technology Committee ranking member Ralph Hall, R-Texas. The suspension process required passage by two-thirds of members present, not a simple majority. It failed to get the two-thirds majority.

Both Ehlers and Peters, a Democrat from Oakland County, are also members of the House Science and Technology Committee. Their proposal is to increase MEP funding from $125 million this year up to $184 million by 2015. It would also reduce the matching amount that the states and participating companies would have to pay for MEP services, from the current 66 percent down to 50 percent.

“Even though the MEP program is primarily to help the smaller manufacturers, it also has a real impact on the larger manufacturers because if the smaller ones aren’t making the parts properly, the large manufacturers are really having problems,” said Ehlers.

Due to the budget shortfalls within state governments, “I think we’ve seen about 23 states that have either decreased or eliminated MEP funding because of the cost share structure,” said Peters. “This will make it easier for states that are particularly hard hit, like Michigan, and business located in those states, to get the funding they need.”

MEP, which has been used by a number of West Michigan manufacturing companies, is administered by the National Institute of Standards and Technology, an agency of the U.S. Commerce Department. It was launched 20 years ago as a national network with thousands of specialists who work with small and mid-sized manufacturing companies to enhance business growth, improve productivity and expand capacity. It does that by focusing on continuous improvement methods, technology acceleration, supplier development, sustainability and workforce training.

Ehlers likens MEP to the federal government’s venerable Agricultural Extension Service, which in Michigan is administered by Michigan State University and provides farmers with the latest research and information on new technology.

According to information compiled by Ehlers and Peters, on a national basis MEP has been credited with the creation of 57,000 new jobs and more than $10 billion in sales per year in recent years.

“When someone discovers new manufacturing techniques which really improve the efficiency of manufacturing operations, that’s the sort of thing you want to share with all the other manufacturers as quickly as possible, and make sure that Michigan continues to be competitive, compared to other American manufacturers,” said Ehlers.

In West Michigan, the MEP program is available through the Michigan Manufacturing Technology Center-West, which is located at The Right Place offices in Grand Rapids.

Bill Small, regional vice president of Technical Services at MMTC-West, said companies that qualify for MEP help have manufacturing plants that employ no more than 500 people.

MMTC-West serves 17 counties, from the Indiana border up to Newaygo and almost as far east as Lansing. Small said there are about 3,500 manufacturers in that area that could qualify for MEP help; last year about 465 of them used it. Michigan is in the top 10 states that are the most active users of MEP, he said.

Mark Lindquist, president of Rapid-Line Inc. on the Gezon Parkway in Wyoming, said the MEP helped his company “dramatically” a few months ago when management saw a need to diversify into new markets.

“We had a fair amount of automotive business a few years back. In the downturn, that kind of went away,” he said.

Rapid-Line, founded in 1926, is a contract manufacturer of parts for a variety of types of industrial companies, including furniture. It employs about 95 people.

Office furniture was hurt, too. Lindquist noted that some of the traditional large customers for the major office furniture makers in West Michigan were financial and insurance corporations — businesses which took major hits in the Wall Street crisis of 2008 and 2009.

Lindquist, who is the current chair of the Manufacturers Council hosted by The Right Place, said Rapid-Line paid about $4,500 for the services of a marketing expert from the MMTC in Plymouth, with the state of Michigan and the federal government each picking up a third of the total cost, which was about $15,000 dollars.

“We used Tim Ford” of the MMTC, said Lindquist. “I would characterize him as an Internet marketing genius, or close to it.”

Kathy Lindquist, sales manager at Rapid-Line, said Ford worked with them on a marketing strategy to find new customers, which relied heavily on use of the Internet. Those new customers are “outside of our traditional market area,” she said.

The methods Ford helped Rapid-Line develop and implement are “very hands on, and it worked right away,” she added.

Mark Lindquist said Rapid-Line had to downsize as the recession kicked in a couple of years ago but business began improving during 2009, bringing the company back up to normal employment levels by the start of 2010. His company is adept at producing “specials” for the office furniture industry, which became more frequent as some of the large traditional customers were replaced by smaller companies.

Lindquist, who said he has been involved with The Right Place for about 20 years, said there are about 40 companies that participate in the Manufacturers Council and practically all of them have used some of the MEP services.

In prior administrations in Washington, said Lindquist, the MEP “was always the program to cut. The Obama administration is at least behind trying to help manufacturing.”

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