California's Manufacturing Jobs at Risk, U.S. Administration's Budget Exposes Weak Support for Small Manufacturers.

Business Editors

LOS ANGELES--(BUSINESS WIRE)--Feb. 12, 2004

While indicating support for the U.S. Department of Commerce's Manufacturing Extension Partnership (MEP) in its recently released manufacturing strategy, the U.S. Administration proposes to fund the program at a third of its traditional funding level in FY 2005. The President's budget proposes $39.19 million for MEP in its FY 2005 budget request that was sent to Congress. The amount represents a 63 percent cut from the FY 2003 funding level. MEP has been funded at roughly $106 million for six years.

A majority of Congress has indicated support for full funding of the MEP citing its success in bolstering the competitiveness of America's small manufacturers. Both the FY 2004 budget and the FY 2005 request will severely curtail the activities of MEP -- a highly acclaimed public-private partnership that provides technical assistance and business support services to America's small manufacturers. California's MEP center has shown outstanding success in providing specialized services to California's large aerospace and defense supply chain. Last year, over 2,700 high paying jobs were directly attributed to the center's efforts.

California Manufacturing Technology Consulting (CMTC), California's MEP center, works directly with small and mid-sized manufacturers in the state to help them adopt new technologies and modern business practices in order to grow business and provide good, high-paying jobs for American workers. The MEP program has been an extremely effective federal, state, and private partnership. A study by the U.S. Census Bureau found that MEP clients experience productivity gains more than four times greater than comparable firms.

"The proposed funding cut will dramatically affect California's manufacturers, and in turn, the California economy," says David Braunstein, President and CEO of CMTC. "Our capacity to improve manufacturing and keep high-paying jobs in California and the U.S. decreases by 2/3rds when our funding is cut in 2/3rds. California's companies are not only being hit with the high costs of doing business in California, but also with competition from such low-wage countries as China. Our manufacturers need services that will increase productivity, decrease costs, and increase profits -- all of which will allow them to compete nationally and globally. This is the only way California jobs and businesses can be saved. We hope the Administration takes another look at this vital program and what it does for the state and national economy."

These cuts come on the heels of growing recognition and appreciation for the program. Last week, a Harvard University group named MEP as one of the nation's 50 best and brightest government programs as a semifinalist for the Innovations in American Government awards. Independent publisher BizBest selected MEP as one of "The 100 Best Resources for Small Business" in its 2004 publication. This fall, an independent review by the National Academy of Public Administration (NAPA) determined: "the MEP program...is the only federal program designed specifically to help small manufacturers, and positioned to help create an infrastructure for providing support to these firms as the U.S. economy moves through enormous economic transition."

About California Manufacturing Technology Consulting

A private, nonprofit corporation, CMTC was established in 1992 to provide high-value consulting services to California's high-tech and traditional small and medium-size manufacturers to increase their competitive advantage through improved methods of management and manufacturing. CMTC's regional teams cover Los Angeles, the Inland Empire, Orange County, Ventura/Santa Barbara County, the San Fernando/San Gabriel Valley, the San Joaquin Valley and San Diego/Imperial County. For more information, visit www.cmtc.com.