Peters And Ehlers Introduce Bill To Protect Manufacturers In Struggling States

Press Release

Congressman Gary Peters and Congressman Vernon Ehlers announced today they have introduced legislation to help Michigan businesses continue to participate in the Manufacturing Extension Partnership Program (MEP). The MEP requires matching investments from the state and businesses, but as a long and deep recession continues to take its toll, states like Michigan and small manufacturers are finding it hard to meet their cost share requirements. Peters and Ehlers' legislation (H.R.4393) authorizes a reduction of the state and industry match required for states and manufacturers to ensure they will not lose access to the critical support MEP provides. Forty other Members from both parties have already cosponsored Peters and Ehlers' legislation.

"The recession is threatening to strip Michigan manufacturers of MEP support at the very time they need it the most," said Congressman Peters. "This legislation will ensure that manufacturers will continue to have access to the critical support MEP provides. Of the seven million jobs lost in the recession thus far, over two million have been from the manufacturing sector. MEP has a proven record of creating jobs, and preserving and strengthening MEP should be a top priority as Congress continues its effort to revive the economy. I am very grateful to my friend Congressman Ehlers for partnering with me in introducing this bipartisan legislation."

"MEP has helped hundreds of Michigan small businesses cut costs and remain globally competitive over the past two decades, and in today's economy, manufacturers need this type of support more than ever," said Congressman Ehlers. "This bill will help ensure the participation of manufacturers who need to improve processes, reduce waste, and train workers to use new equipment. Helping our manufacturers to be successful is among the most important things we can do to help turn Michigan's economy around."

"MMTC is pleased and grateful that Congressmen Peters and Ehlers so clearly understand the threat to our smaller manufacturers posed by the fiscal problems of many of our industrial states," said Mike Coast, President of the Michigan Manufacturing Technology Center, Michigan's MEP affiliate center. "By reducing the match requirement for MEP funding, the federal government can keep its valuable support flowing to states in fiscal distress, where the need is likely to be greatest."

Currently the costs of the MEP's services are shared between the federal government, state government and industry, with the federal government contributing one-third and states and industry contributing the remaining two-thirds. In other words, every federal dollar contributed to the MEP is matched 2-to-1 by state governments and industry.

However, the economic recession has strained many state budgets, and at least 23 state MEP centers reported a decrease or elimination of state MEP funding in 2009. If a state decreases or eliminates funding for the MEP, the cost-share burden is shifted to small manufacturers who are unlikely to be able to afford increased contributions during an economic downturn. This significantly jeopardizes the ability of MEP centers to match federal funds and risks the loss of MEP services in these areas, potentially causing even greater economic hardship in hard hit manufacturing states.

Peters and Ehlers' bill would reduce the participant match from 66 percent to 50 percent, and give the Secretary of Commerce the authority to reduce the match further if circumstances necessitate such action. An adjustment to the federal cost share in the MEP will greatly alleviate the burden on state budgets and small manufacturers, preserve MEP's ability to provide critical services to small manufacturers, and create much needed manufacturing jobs.

The Manufacturing Extension Partnership is a national program that delivers critical services to small and midsized manufacturers, providing access to public and private resources that enhance growth, improve productivity, and expand capacity. The program is available in all 50 states, and was credited with creating or retaining 57,000 manufacturing jobs in 2007 and increasing or retaining $10.5 billion in sales for participants.

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