New Jersey Manufacturing Woes, Possible Solutions Examined by Pascrell at Congressional Field Hearing
Republican House Committee Chair joins lawmaker to hear
plight of local manufacturers; look at programs offering assistance
PATERSON - U.S. Rep. Bill Pascrell, Jr. (D-N.J-8), Ranking Member of the House Small Business Subcommittee on Tax, Finance, and Exports, today held an official Committee field hearing in the City of Passaic to examine the many challenges facing manufacturing companies and ways government can provide assistance to strengthen this critical sector of our economy. Joining Pascrell at the hearing was Subcommittee Chairman Rep. Pat Toomey, (R-PA), a diverse array of regional manufacturers, and representatives from various government agencies.
Specific programs discussed included the Department of Commerce's Manufacturing Extension Program, the SBA's Small Business Development Centers Program, and the Department of Defense's Procurement Technical Assistance Centers Program.
"This hearing gave us a unique opportunity to understand what our local manufacturers are going through, the specific challenges they face in growing their business and creating jobs, and what we can do to offer assistance at the federal level," Pascrell stated. "If we do not hear from the real folks directly, then we're not doing our job. We need the facts, the stories, and the real-life implications of what's happening in this most critical sector of our economy so we can strengthen it."
According to a Bureau of Economic Analysis Study, manufacturing contributed 29 percent of the nation's economic growth [i.e., real Gross Domestic Product (GDP) adjusted for inflation] between 1992 and 1997. This is the largest of any sector. By comparison, services contributed 19 percent; transportation and utilities, 10 percent; and finance, insurance and real estate, 13 percent.
The nation's 380,000 small manufacturers represent over 98% of the nation's manufacturing enterprises, employ 12 million people, and supply more than 50% of the value added in U.S. manufacturing. According to a 1997 Census Bureau report, there are over 11,000 manufacturers in New Jersey, employing over 410,000 people. Over 65 percent of these manufacturers are not only small, but employ fewer than 20 people. The New Jersey Department of Labor estimates that manufacturing jobs represent 12 percent of the statewide employment.
"We have already lost too many jobs in manufacturing to ill-conceived trade agreements and a lack of a comprehensive manufacturing policy in this nation," Pascrell said. "In tough economic times, it is even more critical that we provide federal assistance through programs that have proven to work for local companies. This affects real people, working hard everyday, and is central to our overall economic prosperity as a nation."
The first panel to testify at the hearing consisted of local manufacturers. They included Mike Patel, President & CEO of PPI/Time Zero, and electronics assembly company; John Watson, President of Premium Color Graphics, a lithograph printing company; Jack Yecies, President of Herman W. Yecis, Inc., an electronics components company; and Cliff Lindholm III, President of Folstrum Company, a defense contractor.
Panel Two allowed the Committee to hear from Technical Assistance Representatives on ways in which local manufacturers can receive assistance. They included Bob Loderstadt, President of New Jersey Manufacturers Extension Program; Burt Rashkow, Manufacturing Mentor at the New Jersey Small Business Development Center; and James Mitchell, Assistant Director of the New Jersey Procurement Technical Assistance Center.
The Department of Commerce
Manufacturing Extension Program
There are currently 61 Manufacturing Extension Program Centers operating in all 50 states and Puerto Rico, and they provide technical and managerial assistance to small and medium manufacturers. Centers offer expertise, needs evaluation, application demonstrations for new production technologies, training, and information dissemination. Larger, regional organizations use federal, university, and private sector technologies, knowledge, and skills in providing improved manufacturing techniques designed to increase efficiency and quality and to decrease costs. Current Fiscal Year 2002 support is $106.5 million. For FY2003, the Bush Administration's recently released budget requests $12.9 million for the MEP, an 89% reduction.
The Small Business Administration
Small Business Development Centers
There are currently 58 small business development centers -- one in every state (Texas has four), the District of Columbia, Guam, Puerto Rico, Samoa and the U.S. Virgin Islands -- with a network of nearly 1,000 service locations. In each state there is a lead organization which sponsors the SBDC and manages the program. The lead organization coordinates program services offered to small businesses through a network of subcenters and satellite locations in each state.
Subcenters are located at colleges, universities, community colleges, vocational schools, chambers of commerce and economic development corporations.
In 2000, New Jersey Small Business Development Centers:
- Provided over 5000 clients with one-on-one counseling,
- Trained over 14,000 potential and established business owners during 690 workshops and conferences, and
- Assisted New Jersey small businesses in obtaining approximately $15 million in loans and $20 million in contracts.
Department of Defense
Defense Procurement Technical Assistance Program
Since 1985, the Department of Defense's Defense Logistics Agency has operated the Defense Procurement Technical Assistance Cooperative Agreement Program (PTAC). DLA partially funds 91 centers that are located in 45 states and Puerto Rico. The centers provide training and counseling on marketing, financial, and contracting issues at minimal or no cost - offering important tools for small and medium manufacturers that would like to contract with the government. For example, PTACs provide:
- One-on-one counseling and procurement technical assistance to help a company market its products and services to the government, as well as to respond to government solicitations.
- Introductory workshops and seminars to initiate small businesses with government procurement processes.
- A bid-match service to provide individualized government-wide procurement opportunities specific to a company's products and services.
- Counsel to prime contractors regarding the development of subcontracting plans, including promoting the use of small, disadvantaged, woman-owned, and veteran-owned businesses.
- Counsel to subcontractors regarding marketing to prime contractors and developing bids and proposals.
Since 1986, New Jersey businesses have received over $200 million in government contracts as a result of the assistance provided by the New Jersey Institute of Technology's Procurement Technical Assistance Center.