Shirt Sleeves

Washington, Apr 2 -

Congressman Joe Knollenberg defended the Manufacturing Extension Partnership (MEP) today in testimony before the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies.  He argued strongly for the growth and expansion of the highly successful program.  In his remarks, Congressman Knollenberg highlighted two local firms that have been able to achieve significant results as a result of MEP.

“With Michigan’s economy struggling so mightily,” said Knollenberg, “I simply cannot imagine ending an economic program this successful.”

MR. KNOLLENBERG: Mr. Chairman and members of the Subcommittee, thank you for the opportunity to testify today about fiscal year 2009 funding for the Manufacturing Extension Partnership, or MEP. 

To say that the manufacturing sector is important to my district and to the State of Michigan is an understatement.  In my district alone, there are more than 1,500 manufacturing entities, and 93% of them have less than 100 employees.  My district also includes the headquarters of over one-fourth of the 100 largest auto suppliers in North America.  In the state of Michigan, over 15,000 small and medium-sized manufacturers are the industrial foundation of metropolitan centers and anchor good jobs in smaller cities and towns. 

The manufacturing sector in this country faces many challenges.  There are several major issues that we and other policymakers at the federal level need to address to improve the business environment for manufacturers to help make them more competitive.  We are working on those, but they will take time.  

The MEP program has a direct impact on thousands of small and medium-sized manufacturers each year.  I believe we should focus on programs that reap large rewards for our manufacturers and have strong bipartisan support.  That is why I have made funding of the Manufacturing Extension Partnership one of my top priorities in the fiscal year 2009 Commerce, Justice, and Science Appropriations Bill.

As you know, the MEP is a federal-state-private network of 59 centers with over 350 locations in all fifty states.  These not-for-profit centers work with small and medium-sized manufacturers to help them adopt and use the latest and most efficient technologies, processes, and business practices. 

The MEP Center in my home state, the Michigan Manufacturing Technology Center, or MMTC, helps Michigan’s small and medium-sized manufacturing companies become more competitive and remain that way.  Founded in 1991, MMTC has six offices in Michigan, with 55 staffers in the state.  I have heard from numerous companies throughout Michigan that have benefited from MMTC’s services. 

Allow me to tell you about one such company, Universal Tube Inc.  Universal Tube is a family owned and operated company that specializes in precision tube bending, tube fabrication, and brazed tubular assemblies.  Founded in 1980, Universal Tube employs 199 individuals and is located in my district in Rochester Hills, Michigan.  I recently had the pleasure of visiting their facility and left quite impressed, particularly with the improvements spurred by their work with MMTC.

Universal Tube manufactures products that are used in a variety of applications, including automotive, refrigeration, and household appliances.  While Universal Tube was employing some LEAN principles in its manufacturing process before its relationship with MMTC began, it was looking for guidance on how to further streamline its operations without the trial-and-error approach to LEAN it had been using in the past.

MMTC’s work with Universal Tube to employ more LEAN principles and techniques is ongoing and data showing results is incomplete.  However, after an initial assessment was performed in December, 2007, an initial cost savings of more than $400,000 was identified as a direct result of its work to streamline operations.  It is my hope that Universal Tube will be able to continue its work with MMTC to improve its operations in order to eliminate waste, increase productivity, and create more high paying jobs in the community.

Another example of the positive effect MMTC has on manufacturers is Total Door, located in my district in Oakland County, Michigan.  Total Door is a privately owned company that has manufactured doors and related hardware for over thirty years.  In fact, their facility, with over 50 full-time employees, represents one of the last remaining American manufacturers in the door industry.  Total Door’s products can be found in hospitals, schools, hotels, and many other commercial buildings throughout the country.

Total Door has experienced increased success primarily because of its efforts joint efforts with MMTC to expand its facility, add machinery, and teach LEAN principles to its employees.  The effort to expand operations while simultaneously streamlining its current operations allowed Total Door to increase its production by almost ten percent.  This added more than $514,000 to its bottom line in 2007, the year after working with MMTC.

The additional revenue has prompted Total Door to reinvest this capital in new technology and research and development projects.  This reinvestment is a perfect example of how MEP helps manufacturers streamline their operations and solidify their position in the global market, ultimately enabling companies to provide stable jobs and deliver consistent economic impact in their communities.

Universal Tube and Total Door are just two examples of the effect MEP has on manufacturers nationwide.  In fiscal year 2007 alone, MEP helped generate or retain over 52,000 jobs and more than $6.765 billion in sales, and stimulated $1.65 billion in economic growth through increased client investments in modernization.  Additionally, MEP clients reported over $1.115 billion in cost savings directly attributed to the program’s assistance.  MEP is a proven commodity in the manufacturing sector and is invaluable to our small manufacturers.  As vital as this program is to our manufacturers, fiscal year 2009 funding is vital to MEP.

As you know, MEP was funded at a level of $89.6 million in fiscal year 2008 omnibus appropriations bill.  President Bush’s fiscal year 2009 budget request reduces the program to $4 million, or a decrease of 95 percent.  The reduction in funding will effectively kill the MEP program.  This will force MEP centers to close and will cause smaller manufacturers to miss out on significant increases in sales and cost savings.  It will also cause potentially greater job losses, something my home state of Michigan, in particular, simply cannot bear.

For these reasons, Mr. Chairman, I respectfully urge you and your colleagues on the subcommittee to appropriate $122 million for MEP for fiscal year 2009.  This is the authorized level in the recently enacted America COMPETES Act (PL 110-69). 

As I have outlined today, the results speak for themselves, as the federal investment in MEP directly produces results that help American families and the American economy. 

I simply cannot imagine ending a program that works and works this well.