Federal Funding Cuts Threaten Georgia Tech Program That Assists Small- and Mid-Sized Manufacturers

Federal funding for the Manufacturing Extension Partnership (MEP) - in Georgia managed by Georgia Tech's Economic Development Institute (EDI) - was cut 63 percent under an appropriations bill passed by Congress.

"Through our state funding, Georgia Tech will continue to provide assistance, but our ability to help Georgia's small- and mid-sized manufacturers will be significantly reduced," warned Larry Alford, director of EDI's business and industry services. "This program has demonstrated its effectiveness in saving jobs and protecting the nation's manufacturing base, so we don't understand why it is being cut at such a critical time."

The program, which provides technology-driven assistance in such areas as quality standards, lean enterprise, information technology and energy management, has enjoyed strong support from manufacturers in Georgia.

Jimmy Lindsey, human resources director at Bob's Candies, says support from Georgia Tech and the MEP has been invaluable to his company. A 300-person operation in Albany that manufactures hard candies, Bob's Candies sought assistance from the Georgia MEP in implementing lean enterprise techniques.

"We went from having to shut down in 2002 to having one of the best years ever in 2003," Lindsey said. "Georgia Tech's training and assistance has played a large role in that transformation. We went from unprofitable to profitable."

The single most important assistance program for manufacturers, MEP has received strong support from Georgia's congressional delegation across party lines. Both Senators Saxby Chambliss and Zell Miller supported the program's continued funding, and six of Georgia's 13 representatives signed the "Dear Colleague" letter circulated to members of Congress. Nationally, 58 senators and 203 representatives signed the letter, with an additional 43 representatives signing individual letters of support.

"Small and medium businesses provide Georgia and our nation innovation and most of our jobs," said Sen. Saxby Chambliss (R-GA). "If we are serious about building up our economy and creating jobs, we must ensure our small and medium-sized businesses can compete globally. MEP is a cost-effective program that works and continues to be helpful to Georgia businesses."

As governor, Sen. Zell Miller (D-GA) worked to increase both the breadth and accessibility of the program.

"I've seen firsthand how Georgia Tech's Economic Development Institute works to support entrepreneurs and attract new companies," he said. "It provides an invaluable resource for hundreds of small- and medium-sized manufacturers across our state."

In Georgia during 2002, MEP assistance helped companies create or retain more than 1,300 jobs, invest more than $33 million, cut $13 million in unnecessary costs - and increase or retain $61 million in sales. Nationally, MEP assistance helped manufacturers create or retain nearly 42,000 jobs.

Prior to the cut, the national MEP program was receiving $110 million per year to support a network of 60 centers with 400 locations across the country. The Bush Administration recommended slashing MEP's funding to $13 million. The $328 billion omnibus appropriations bill approved by Congress contains just $39.6 million for the program.

The Administration believes that MEP centers should be self-sustaining, with manufacturers paying market price for services. But Alford says that's unrealistic because many small companies - especially those in rural areas - can neither afford nor find the kinds of assistance that Georgia Tech provides through the MEP program.

"We serve as catalysts, providing an independent perspective to help companies implement lean manufacturing techniques or adopt quality systems," he explained. "If this program is eliminated, many small manufacturers will not have access to assistance that can make a real difference in their ability to be competitive and grow."

Between 2000 and 2002, Georgia lost 63,900 manufacturing jobs, and 60 manufacturers closed their doors for good. In terms of layoffs, the number of Georgia manufacturers slashing employment increased from 44 companies in 2000 to 110 companies in 2002. Nationally, the manufacturing sector has lost 3 million jobs in the past three years.