The American Mold Builder
Fighting global competition requires resources that may be beyond the reach of small- to midsize manufacturing companies. As far back as 1962, the US government attempted to level the playing field with the Trade Adjustment Assistance for Firms (TAAF) program. The program offers matching funds – $75,000 from TAAF and $75,000 from the company receiving funding – to increase the competitiveness of US companies.
According to a 2017 Congressional Research Report, “The Trade Adjustment Assistance (TAA) programs were first authorized by Congress in the Trade Expansion Act of 1962 to help workers and firms adapt to import competition and dislocation caused by trade liberalization… TAAF provides technical assistance to help trade-impacted firms make strategic adjustments to improve their global competitiveness.”
Eleven TAAF centers across the US work with manufacturing companies to develop and implement projects that strengthen their organizations and increase their competitiveness. But, many mold builders have never heard of it – and the Great Lakes Trade Adjustment Assistance Center (GLTAAC) wants that to change.
Matching funds for development through TAAF
“We’re one of 11 centers around the country, and we manage the Michigan-Ohio-Indiana region,” said Scott Phillips, senior project manager for GLTAAC. “We are part of the Economic Growth Institute at the University of Michigan, and we’re funded by the US Department of Commerce.”
As Phillips explained, the TAAF program has been around since the early 1970s, but its reach has always been small. “We typically work with one to two dozen new companies a year,” he said, “and across the US, all the centers together usually are working with 500 to 600 companies in total.”
Nationally, the program receives less than $15 million per year in funding. The program is open to all types of companies, and though almost all are in manufacturing, the predominant type of manufacturing served by the TAAF centers varies based on location.
“The centers are structured so that the companies accepted into the program can get the specific type of assistance that is needed,” explained Phillips. “In our area, we work with moldmakers, plastics processors, and tool and die manufacturers. In the northwest, the center may work with more salmon fishers or in Texas, it could be small food processors.”
Phillips, whose job is focused on outreach, works to find companies that fit the program and can meet three criteria for qualification, based on level of sales, level of employment and the degree to which imports have impacted the company. First, sales must be down 5% over a recent period of time. Second, employment head count must be down 5% over the same period of time. Finally, evidence must be presented that shows the impact of competitive imports. “Typically, that means the company must show that the purchase volume of at least four customers is down,” Phillips explained. “We need to speak to two of them, and at least one of them must validate the fact that purchases are down because they’ve been resourced to an offshore company.
“In a five-minute phone call, we can almost always figure out if a company is eligible because the criteria are pretty straightforward,” he continued.
Once the company has taken the first steps toward qualification, GLTAAC submits a petition on its behalf for review in Washington, DC. GLTAAC also makes a site visit to talk with the client and perform an assessment of the business.
“We work with the company to decide on the best way to use $150,000 over five years,” explained Phillips. “Half of that – $75,000 – is a grant from the program to match $75,000 in funds from the company.”
Helping manufacturers compete
TAAF is designed to meet the needs of the manufacturer, so its funding parameters are fairly broad. “If you’re a small company and all of a sudden you’re confronted with additional foreign competition, you probably don’t have the internal capabilities to deal with it,” said Phillips. “The program allows manufacturers to bring in outside service providers to build their capabilities and competitiveness.”
Examples of projects to be undertaken could include sales lead generation, market research aimed at diversification into new markets, productivity improvements, ERP or MES implementation, management training, succession planning and more. Capital expenditures are one limitation – equipment and building additions cannot be funded.
GLTAAC staff help companies assess where best to focus their efforts. “When we go in to create a spending plan, we begin with a site assessment,” said Paul Crossley, senior project manager. “We look at all functional areas: management, sales and marketing, financial, production and support services, such as human resources and information technology.”
The assessment includes interviews with company leadership to help form a high-level picture. As the plan develops, follow-up calls with department heads and other staff members occur to help GLTAAC dig deep into what the company is doing and where the opportunities are for improvement.
“Part of what we do is help companies figure out what they need to do, what they have the internal capabilities to do and where they need outside help,” said Phillips.
Crossley added, “Our function is to come in and help them define what is needed. We’ll make recommendations based on what we see, but ultimately the company decides what it wants to do. Our function is to provide information based on our experience.”
Once a plan is finalized, it must be submitted for approval. Then implementation mode begins. The program allows five years to identify the scope of work, chose an outside solution provider and create a three-way contract among the solution provider, TAAF and the client. Before the contract can be finalized, parameters for the outside provider must be met, including proof of outside expertise, a set project duration and the definition of clear deliverables.
As the project progresses, the plan is able to adjust. “We are working with distressed companies,” said Phillips. “A plan that is developed today may not be perfectly meaningful and useful a year later. We have up to two years to redesign the plan as the company’s needs change.”
Michiana Global Mold benefits from TAAF
Michiana Global Mold – located just down the road from Notre Dame University in Mishawaka, Indiana – provides injection molds for the plastic and rubber industries. The company services the automotive, electronics, medical and military markets in its 25,000 square foot facility, taking great pride in its employees’ extensive experience and problem-solving capabilities.
Five years ago, President and Chief Operating Officer Eric Karaman heard about the TAAF program. “One of our customers told us about it,” he said. “The customer had participated in the program and had nothing but good things to say. So, we went through the application process, and now we’ve been engaged with GLTAAC since 2016.”
At Michiana Global Mold, TAAF funding has been used for several activities related to business development. “We’ve used funds to support cold calling and lead generation efforts,” said Karaman. “The first thing we used funding for was to use a head hunter to try to find a sales representative. That wasn’t successful for us, so we moved into a lead generation service.”
When working with the TAAF program, the manufacturing company is able to choose its own outside vendors. “The most important part is the cultural fit between the company and the consultant,” said Phillips. “Some companies already know a consultant and have a prior relationship. However, some companies don’t have that knowledge or previous relationship, so we can provide three or four potential providers if needed.”
Karaman expanded on this, saying, “We were able to choose our own vendor. We told them exactly what the relative factors were for the program, because the vendor has to be a party to the agreement. The vendors bill half of their costs to Michiana and half to GLTAAC.”
Crossley added, “There’s a due diligence process, and our function is to oversee that, but we’ll defer to the company unless we see a mismatch.”
TAAF funds also helped Michiana Global Mold to hire a business development person to take the lead generation activities to the next level. “Our business development person takes the leads from the lead generation company and runs them to ground by following up with phone calls and information,” he added. “We’ve employed this strategy for about a year and a half, and it’s been successful in helping us add new customers.”
By freeing up resources and bringing in outside expertise, the TAAF program works to give manufacturers an advantage by letting them focus on the daily work. Crossley commented, “There are only so many hours in a day, and these small companies need boots on the ground. GLTAAC helps these companies on many levels in a strategic way, but we also help them with outside resources to give their management team the time to do the strategic work.”
GLTAAC tracks data to show that the work it does is impactful and helps companies stay in business. “We have a 97% five-year survival rate,” said Phillips. “We track sales and employment – our companies typically have significant sales and employment growth while in the program and after.”
After several years of cooperation between Michiana Global Tool and the staff at GLTAAC, Karaman said, “I’m highly supportive of this program. Working with the people at GLTAAC has been terrific. It’s not a terribly cumbersome process, and they help you every step of the way.”