Manufacturers eligible for federal grants

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Steve Cowles is looking forward to the future.

The president of Peak Robotics, a Colorado Springs firm that manufactures robotics and other automation equipment, is expanding the company’s reach and broadening its appeal thanks in part to a federal grant.

Although Peak Robotics for 15 years has worked primarily to provide automated machines to electronics and semiconductor firms, the company also will make customized products for the emerging market in biotechnological and pharmaceutical companies.

“In the pharmaceutical companies, they are finding new drugs and discovering new drugs,” Cowles said. “There are thousands of tests every day. It’s a time-consuming process, testing new samples every day, trying to find the next new drug. The way to do that efficiently is with robotics.”

In the biotech sphere, too, Cowles is angling for his company to get a piece of the action. DNA analysis is sometimes done on a high-volume scale, and the nature of DNA testing requires thousands of technical steps amid thousands of samples.

Unlike human personnel, “the automation provides accuracy, doesn’t get tired, and, as long as it’s set up right, doesn’t make mistakes,” Cowles said.

Peak Robotics owes its business rebirth to Trade Adjustment Assistance, in which matching funds from the federal government are available to any manufacturer who can prove that his business has been impacted negatively by globalization.

Although Trade Adjustment Assistance has been available since it was signed into law in January 1975, most people don’t know what it is or how to get it.

In the early 1970s, as the country was relaxing tariffs on imports, large multinational corporations began to create products more cheaply using overseas labor and factories. Unable to compete against the flood of inexpensive imports, the Trade Act of 1974 in part sought to keep small and medium American businesses afloat with Trade Adjustment Assistance for Firms.

Because of annual funding from the U.S. Department of Commerce, the assistance can still be used today.

“We had a metals fabrication firm here in the Springs, and they used to make frames for computers,” said George Boutin, the executive director in the Office of International Affairs at the Greater Colorado Springs Chamber of Commerce. “The firm had a big contract with a major computer company, but the company sent the work to a Southeast Asian country. The company lost 50 jobs, about half of its work force.”

Boutin refers business owners to Tanya Bahr-Torline at the Rocky Mountain Trade Adjustment Center in Boulder. Boutin works as a conduit to get Colorado Springs business owners in touch with federal funds they may be entitled to. Most TAA recipients are manufacturers – those who are most directly impacted by NAFTA and other trade agreements.

For Peak Robotics, its clients – electronics and semiconductor firms – were moving overseas.

“Initially we were a high-tech business involved in disc-drive manufacturing and semiconductor equipment,” Cowles said. “Our customer base shrank because of manufacturing processes moving overseas, which qualified us for this particular grant.”

Funded through the Department of Commerce, 12 not-for-profit organizations carry out the Trade Act in so-called Trade Adjustment Centers across the country. The office in Boulder is run by Edvard Hag.

“The maximum for federal matching funds is $75,000, the minimum is $22,500. It depends on the size of the firm,” Hag said. “Smaller firms with less than $1 million in sales will qualify for the smaller amount, while a larger firm with $10 million in sales would qualify for the larger amount. We use a scale based on the size of the firm.”

It isn’t easy to score funds from the government. Because most business owners don’t have time to plow through the endless paperwork, the center’s salaried employees work to secure the government grants.

“We’ll complete the application for them, then we submit it to the Department of Commerce,” Bahr-Torline said.

Before even filling out the application, a phone interview is scheduled to ask questions that determine whether the business is a good candidate for the program. “We don’t waste the time of people who won’t make it,” she said.

To make the cut, businesses have to demonstrate that their problems correlate to overseas trade. The figures must show revenue loss, and the firm must have lost employees, or a major contract for work.

“The criteria are tied to import competition,” Hag said. “The firm must answer our questions with yes, our sales our down; yes, employment is down; yes, there is an increase in imports for similar products. If all those things are the case, they should be approved.”

Although the application itself comes at no cost to the business owner – annual grants from the Department of Commerce cover those costs – the business owner will have to cough up half the amount needed to secure the business’ footing in the global marketplace.

At this point, once the application is approved, Trade Adjustment Center employees work to put the money to the best possible use. Each client is assigned a project manager, who has a minimum of a master’s degree in business administration and 15 years of experience in the private sector.

Bahr-Torline said the value to the client is two-fold; not only is the manufacturer approved for matching federal funds to get his company back on its feet, he has the opportunity to talk shop with someone who has a great deal of experience. “Having that objective third-party perspective is very valuable to them,” she said.

With the project manager, a plan of attack is created. Does the company need a better product (usually not the case) or simply a better marketing and sales angle (more often the case)?

For some of their clients, the road to improved competitiveness means revamping marketing, or addressing weaknesses in manufacturing, engineering, information technology or quality.

“Say a company has come out with a new product. We will work with them to find an outside consultant,” Bahr-Torline said. “Training, Web site development, creation of brochures, market research projects. Whatever they need. We just want these companies to succeed.”

It isn’t a quick process. Companies have to be in it for the long haul, as most will be involved with the Boulder program for two to three years.

Most of the first year is spent filling out the application, receiving approval and securing a project manager. The project manager may begin the “plan” – visualizing how the grant money can be used most efficiently for the biggest gain.

By the second year, “it’s actually doing the project, bringing the consultants on. (At that point) the companies are seeing the results they want from the project,” Bahr-Torline said.

One of the purposes of the Trade Act of 1974 was to protect American industry and workers against unjust or adverse import competition by providing adjustment assistance to industries, workers and communities vulnerable to or wounded by increased imports.

“It’s related to the negotiations with our U.S. trade agreements with foreign countries. NAFTA, for example, has benefits for the United States as a whole,” Boutin said. “But the fact is that some people lose their jobs in the U.S. while others gain from the agreement. The idea is to help those firms who lose business to adjust to the new situation.”

Not to be confused with Trade Adjustment Assistance that is available to workers laid off because of outsourcing – a sometimes criticized program created by the Trade Act of 1974 that is funded through the Department of Labor – TAA for Firms is available only to businesses, usually manufacturers.

The primary role of the Trade Adjustment Center is, therefore, to be an advocate for interested firms. The center simpl
ifies the firm’s participation in the program by preparing the application and guiding the firm through each phase of the program.

“The projects are customized based on the individual firm. The funding is cost-shared; the company pays half of the money of the project,” Bahr-Torline said. “It’s not welfare. At that point, they’re serious at doing things they believe in.”

And Cowles is serious.

“We’re headed in a different direction now,” he said. “This money will help us redirect our sales and marketing. We’re going to be updating the Web site, and working with an industrial designer on a new product look.”