Injection molder FPI Thermoplastic Technologies hit a wall five years ago. One of its major customers, a large U.S. retailer, moved its work to China, taking one-third of FPI's business.
The 120-employee company, according to President Sebastian Murray, was in ``dire financial circumstances'' and headed toward bankruptcy, until it turned toward a government-funded small-business consulting center, the New Jersey Manufacturing Extension Partnership.
Murray waded into a spirited debate over U.S. government policy June 8, testifying before a Senate committee hashing out what role Washington should play in boosting competitiveness among manufacturers. More than 2 million U.S. manufacturing jobs have been lost since 2000.
Murray, who sits on the board of the New Jersey MEP, thinks government needs to fund efforts like the nationwide MEP centers. But the program is controversial: The Bush administration is seeking to chop its funding.
``We would be out of business today if not for MEP,'' Murray told the Senate. ``The MEP forced us to change how we thought and how we ran our business.''
He said low-cost MEP consultants helped the $15 million company reduce inventory costs by $500,000 a year, raise per-employee sales by more than 50 percent since 2000 and grow sales 30 percent this year.
The Bush administration this year proposed trimming funding for MEP nationwide from $109 million to $47 million, the third time in four years it has proposed cuts. In previous years, Congress wound up restoring the funding.
The administration said the cuts this year are needed because of tight budgets, and it said MEP could raise fees. But Democrats at the Senate Commerce Committee hearing pounced on those assertions and said the tax cuts approved by the Bush administration and Congress are starving valuable programs.
``We really don't have a national plan,'' said Sen. John Kerry, D-Mass. ``I don't see the administration grabbing on to this with the kind of urgency it ought to.''
But Al Frink, assistant secretary for manufacturing and services in the Commerce Department, said Bush is pursuing a range of policies to help manufacturers - from an energy bill, to tort and medical-liability legislation, to boosting funding on intellectual property enforcement by 25 percent since 2001.
The Bush administration issued its manufacturing plan in January 2004, and since then, 21 of its 57 recommendations have been implemented, Frink said. The 22nd, for a government interagency working group on manufacturing, will be announced in a few weeks, he said.
But others are calling for stronger efforts.
Call for new models
The National Innovation Initiative, a group of 400 business leaders, academics and government officials, said the United States needs to develop new models of manufacturing, including taking advantage of trends toward more customized manufacturing, collaborative relationships for research and technologies like biomaterials.
G. Wayne Clough, NII co-chair and president of Georgia Institute of Technology, told the hearing that the United States is falling behind in educating technology workers. Tighter U.S. visa rules are making it tougher for technology students to enter the country, and other countries are offering more opportunities for them.
He said U.S. manufacturing is not unique. Manufacturers around the globe lost 22 million jobs between 1995 and 2002. But he said the U.S. lagged most of the rest of the world in manufacturing growth from 2000-04, behind developing nations in Asia but also trailing Western Europe and Japan.
One area where U.S. government policy has hurt manufacturing, he said, is in engineering research and development funding.
A presidential advisory council noted recently that federal funding for engineering and physical science research - key for manufacturing - has declined, while other areas, like nanotechnology, have increased, Clough said. He praised the Bush administration for putting funding into nanotechnology research, but said the government needs a more balanced approach to R&D.
Frink said the administration has boosted federal R&D funding to record levels, up 45 percent since 2001. But Kerry said much of that increase has come in weapons research, not the kind of basic work that boosts business competitiveness.
Murray said he thinks government assistance is important, like the $1 million low-interest loan FPI got from the Small Business Administration to buy robots to help make the firm globally competitive.
``The government owes something to U.S. manufacturing,'' Murray said in an interview after the hearing. ``I've been to China, and it just isn't a level playing field.''