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Something to Build On : O.C. Center Included in U.S. Expansion of Manufacturing Outreach Program

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TIMES STAFF WRITER

Federal officials are expected to announce grants today to establish or enlarge 18 manufacturing outreach centers across the country, including one in Orange County.

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.”

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Since it opened in late 1992, the Southern California Center has facilitated assistance for more than 1,500 companies, many of them from Orange County, where manufacturing began recovering from the regional recession earlier than in other areas.

An in-house study of the first 50 clients of the Hawthorne center 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.

“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.

In addition to the Orange County branch office expansion in Anaheim, the grants will fund a new center in San Diego and permit small branches in Ventura County and the Inland Empire to expand. 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.

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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 U.S. 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 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 in the Ontario office for a total of 13, and add three consultants in 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.

Among other things, the center’s consultants advised Micro Precision’s Deischter to invest in computer-controlled production machines so he could meet the tight requirements demanded by purchasers of medical equipment.

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The center also helped him streamline his inventory system and computerize Micro Precision’s management and administrative systems. Deischter said he recently retained the center to develop a system for improving manufacturing processes by using statistical data to predict when to do things like purchase raw materials and change production tools.

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,” said Kyser. “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.

In Orange County, manufacturing employment has fallen to 205,300 from 244,000 in July 1990. But in the past year, manufacturers in the county have added 500 jobs to their payrolls.

The California Manufacturing Technology Center in Hawthorne now receives more than 300 calls a month for assistance--mainly from Orange and Los Angeles counties. And while 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.

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“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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