Outreach Program for Businesses May Get Major Boost
Federal officials are expected to announce grants today to establish or expand 18 manufacturing outreach centers across the country, including four in Southern California.
Business development officials said the centers, which offer consulting and problem-solving services to a broad array of manufacturing businesses, are important economic tools.
“They have a very high value and most manufacturers should use them,” said Jack Kyser, chief economist for the Economic Development Corp. of Los Angeles County. “They would be swooning over the results they get.”
More than 1,500 companies have received assistance through the Southern California center since it opened in Hawthorne in late 1992. An in-house study of the first 50 clients showed that they added an average of 26 jobs, increased sales by 18% and shaved $200,000 from annual materials handling costs by following advice from the center’s specialists.
One grant will fund a new center in San Diego. The other area grants will permit significant expansions of small branches in Orange County, Ventura County and the Inland Empire. The branches are part of the Southern California center in Hawthorne.
The funding completes efforts begun in 1993 to establish a network of manufacturing assistance centers in all 50 states and Puerto Rico.
Officials of the Commerce Department’s National Institute of Standards and Technology, which is awarding the grants, were guarding details--including the dollars involved--until this afternoon’s announcement by Commerce Secretary Mickey Kantor. His comments are expected to put a political spin on things by pointing out as President Clinton’s reelection campaign moves into high gear that all but seven of the nation’s manufacturing technology centers have been started under the Clinton administration.
Sources say, however, that the Orange County center will receive $12.9 million over six years to boost staffing in the Anaheim center to 24 consulting engineers, up from five.
Other grants will provide funding for 12 new consultants to the Ontario office for a total of 13 and add three consultants to the Ventura office for a total of five. The Hawthorne center, which has 47 consulting engineers and 15 support staff, is not slated to receive additional funding.
The San Diego grant will fund a new Manufacturing Extension Center with seven consultants as well as additional manufacturing consultants for two sister organizations. The new center will replace the federally funded San Diego High Technology Resource Center, which specialized in defense industry conversion issues.
Southern California manufacturers who have used the Hawthorne center generally say they have received invaluable assistance.
“I engaged them when I bought this business in 1993 to advise me on strategic planning,” said Charles Deischter, owner and chief executive of Micro Precision Swiss, a Rancho Santa Margarita medical equipment maker. “Since then, I’ve grown from 15 employees to 45 and I had $850,000 in sales in 1993 and expect to hit $3 million this year.
“I would have got there, but the advice from the center got me that substantially faster and with a lot less pain,” he added.
Among other things, the center’s consultants advised Deischter to invest in computer-controlled production machines so he could meet the tight tolerances demanded by purchasers of medical equipment.
The expansion of the Southern California consulting program has long been needed, economic development specialists say.
“Los Angeles County is the No. 2 manufacturing center in the nation behind Chicago, in terms of employment, and Orange County is ninth,” Kyser said. “We’ve lost a lot of jobs, but manufacturing sure hasn’t gone away. When you add it all up, we’re still the biggest [manufacturing] region in the country.’
Manufacturing employment in the region has shrunk dramatically in recent years. Citing defense cuts, the general recession and tough state environmental and business regulations, Southland manufacturers have trimmed payrolls by 252,200 jobs since July 1990. But the six major Southern California counties still have more than 35,000 manufacturing businesses with almost 1.1 million employees.
The Hawthorne center now receives more than 300 calls a month for assistance--mainly from Orange and Los Angeles counties. And although most don’t go beyond that initial contact, more than 1,500 manufacturers in Southern California used the center for major consulting services in its first 3 1/2 years in business.
“This is a good example of how a region can develop critical [services] to help it compete in retaining and attracting businesses and jobs,” said Timothy Cooley, vice president of strategic planning for the Orange County Business Council.
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California Manufacturing Technology Center
* Headquarters: Hawthorne, (310) 355-3060
* Orange County office: Anaheim, (714) 535-1801
* Funding: Federal and state.
* Purpose: Provides affordable and objective consulting services to manufacturing firms with 500 or fewer employees.
* Services: Full operations analysis with list of high- priority projects to implement , or assitance in solving specific problems. Example: equipment purchases, facility layout, waste and scrape materials management, shipping plans. Goal is to improve competitiveness, productivity, sales and quality while reducing costs.
* Cost: $50 to $125 an hour, depending on size of company and complexity of project. Most projects require at least 80 hours.
Source: California Manufacturing Technology Center
