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February 04, 2002 01:00 AM

State support is crucial to site selection

Steve Toloken
Assistant Managing Editor
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    When Connecticut's government decided in February 2001 to make plastics one of its targeted industries, the decision proved a windfall for the plastics industry, which received state funds to hire a full-time director for its training programs and support for other programs.

    Contrast that with the experience of injection molder Nypro Inc. across the border in Clinton, Mass.

    In 1999, Nypro asked a Massachusetts worker training agency for a $50,000 grant. Nypro got approval two years later, after rewriting the grant three times. The company said the process was frustrating, and, by the time approval came, its needs had changed and it turned the money down.

    The different experiences highlight a factor sometimes overlooked when selecting a site for a factory - how easy is it to work with state and local agencies?

    While factors like customer location, labor availability or total manufacturing costs understandably are more important when picking a new plant location, industry officials and site selection experts say that if a government specifically is recognizing plastics as a key industry, that can pay dividends.

    Some states put plastics on a short list of industries they want to recruit or support, sometimes known by its economic development buzzword, a cluster.

    ``Plastics, by and large, is still a blue-collar industry,'' said John Boyd, president of site selection firm Boyd Co. Inc. in Princeton, N.J. Recognition from state officials ``gives these groups more standing when they compete for state funds against more high-tech industry,'' he said.

    Florida, for example, made plastics one of its targets for economic growth, and that decision has helped steer training funds, industry officials say.

    Without that recognition, it would have been more difficult to get the $400,000 that Florida has spent to train workers using the Society of the Plastics Industry Inc.'s satellite-based training program, the Plastics Learning Network, industry officials said.

    ``In the case of Florida, there are specific tangible benefits that come out of being a specific target,'' said Rick Sturgis, director of SPI's Southern Regional Office in Greenville, S.C. ``If a state puts plastics in its cluster strategy, that is when things start to happen.''

    Assessing a state or a region's friendliness to industry is, of course, very subjective, and many areas can tout their strengths for plastics. Within the same state, one agency can be helpful, and another can be unfriendly. And some local development or work-force agencies can focus on plastics, even if their states do not.

    Worker training is key

    One key area to look at, industry officials say, is worker training.

    States have had much more authority to run training programs since 1998, when Congress passed a sweeping revision of the country's job training program.

    The law, the Workforce Investment Act, set up local boards to direct agencies, and said those boards had to have at least 51 percent membership from industry. It also refocused some federal dollars to make it easier for companies to get money to train current workers, rather than focusing government money entirely on training those trying to enter the labor force.

    Florida and New York, for example, are easy to work with for worker training funds, said Gary Moore, director of work-force development at SPI in Washington.

    ``The best ones are where you have a simple application and you are using an approved provider of training, and the approval of the training is relatively simple,'' Moore said. ``New York and Florida, my experience so far is, they make it simple. They have people who will walk you through the process. ... They're not there to be police.''

    By contrast, California and Massachusetts are more difficult to deal with for worker training funds, according to Moore. Those states set up cumbersome regulations, and then wonder why companies, particularly small businesses, do not apply and money goes unspent, he said.

    SPI officials say four states have recently agreed to pay for training using SPI's satellite-based training program.

    New York, North Carolina, Pennsylvania and South Carolina will provide varying degrees of funding for SPI's Plastics Learning Network, Moore said.

    New York is setting up four centers throughout the state that will be downlink sites for PLN, and is making state funds available to pay for half of the cost of training, including wages. North Carolina agreed to fund most of the training for 40 students at two colleges in the western part of the state.

    Pennsylvania set aside money to use a Bucks County Community College downlink site and pay 70 percent of the cost of training. That is open to companies statewide. And South Carolina agreed to use funds targeting economically struggling areas to pay for half the cost of PLN training.

    ``In all four of those, the money is in hand,'' Moore said.

    Nypro was looking for WIA money to split the cost of developing basic molding, math and English classes for a Web-based employee program.

    The company first applied to the Massachusetts agency implementing the program in 1999, rewrote the application three times and got approval in 2001, only to turn down the money because its needs had changed, said Nypro spokesman Al Cotton. He serves on the statewide board in Massachusetts that implements the WIA, and he serves on a local work force in the north central part of the state.

    ``It was extremely cumbersome,'' Cotton said. ``The issue really is one of many more rules than necessary, and in some cases rules that are not really easy to understand.''

    Cotton said the government agency was well-intentioned, but he argued that ``a state like Massachusetts had an activist government for so long, and they have all these rules.''

    Massachusetts Gov. Jane Swift recently appointed herself co-chair of the state's work-force board, which Cotton said he interprets as recognition from the state that problems need to be addressed.

    A spokeswoman for the Massachusetts Department of Labor and Workforce Training, which administers the WIA funds, said federal programs can have cumbersome rules attached. The state has its own training-fund program that is designed to be simpler, and the agency always is trying to streamline its rules, she said.

    An October study by the General Accounting Office found that agencies still are struggling to implement the WIA system.

    ``The results have been extremely mixed,'' said Garry Powers, a principal in economic development consulting firm Concurrent Technologies Inc. in Columbia, S.C. ``The WIA is supposed to push decision-making down to the regional level. In any given area, you can have ... good leadership, and not go very far [away], and it's not good.''

    Business representatives can involve themselves on local boards. The GAO also reported that the business members on WIA boards sometimes questioned whether government agency workers ``have sufficient understanding of the environment in which business representatives operate.''

    One plastics industry executive who serves on his local work-force board said the experience has been valuable but somewhat frustrating.

    ``It is interesting to see the good things that can happen when you get money into a community and use it for retraining,'' said Joe Martella, human resources manager at Nicholas Plastics Inc. in Allendale, Mich. He serves on the Ottawa County Workforce Development Board.

    ``The frustrating thing from my point of view is, at least in Michigan, there are so many rules and regulations,'' he said.

    Seeking state support

    Beyond looking at worker training programs, companies can gauge an area's friendliness for plastics by examining whether states support local plastics industry associations.

    Ohio's industry trade group, PolymerOhio Inc., has been in flux for a year, but industry officials are finishing up a report that will specify what emerging technologies and research the state should help support, said Sharell Mikesell, executive director of PolymerOhio.

    He believes Ohio's government does not give enough support to plastics, supplying $5 million to $10 million a year in aid, including training centers for plastics, programs to commercialize polymer technology and general support for industry groups, he said.

    By comparison, the state spends $100 million a year on agriculture and $80 million a year on coal, he said.

    But Mikesell said that is not really the state's fault. The industry does not do a good enough job telling the state what it needs, which is where the soon-to-be-released report on emerging technologies will provide direction, he said.

    Interviews with industry officials indicate that many of the states putting plastics in their cluster of targeted industries are in the South. Mississippi, for example, is finishing up a report that probably will recommend that plastics be adopted as one of the clusters to target, according to Bill Sisson, a University of Southern Mississippi researcher who is working on the report.

    Some industry officials caution that cluster status, while important, does not automatically translate into something big.

    ``As far as a wealth of resources being poured on industry - not always,'' said Rudy Underwood, director of the Southern region for the American Chemistry Council and the American Plastics Council, in Atlanta. ``To me, it's better than not being recognized.''

    Tightening state budgets will dry up some resources, too. State grants for training are being held up in Connecticut while the state's budget crunch is addressed, said Ray Seeley, chairman of the Connecticut Plastics Council and president of injection molder PTA Corp. in Oxford, Conn. But the CPC's state funding for administrative costs does not appear to be in trouble, he said.

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