Help for Arizona manufacturers hurt by pandemic

The Arizona Commerce Authority is putting out a call to Arizona manufacturers hurt by the pandemic. It has a program to help. 

Companies hit hard by disruptions, layoffs, furloughs, loss of business and other setbacks due to Covid-19 are encouraged to apply for emergency assistance through the agency’s Manufacturing Extension Partnership (MEP). 

Through the partnership, companies can receive subsidized or reduced rates for assistance in areas like rebuilding customer demand, overcoming supply chain disruptions, reassembling their workforce, and identifying new markets. 

“There’s close to 5,000 manufacturers in Arizona and a lot of them need help but most of them don’t know that this kind of help is available to them so they don’t seek outside resources, especially the small companies that need it most,” said David Garafano, executive director of the program.

Many small manufacturers suffering setback 

Garafano said small manufacturers have been hardest hit. The goal is to bring them back to their pre-pandemic levels. 

“In some cases we’ve seen companies that have seen their demand completely dry up. For example, when all of the airlines stopped flying, a lot of the aerospace work in the manufacturing supply chains stopped,” he said. “We saw furniture companies where 80 percent of their demand just evaporated. It was gone.” 

Among the services MEP can assist companies with are:

• Strategic planning and identification of new markets
• Rebuilding customer demand
• Overcoming supply chain disruptions
• Financial and cash flow management
• Lean manufacturing and continuous improvement
• Staffing, training and workforce development
• Maintaining a safe workplace in a COVID-19 world
• Cybersecurity risk assessment and compliance planning

Bargain rates for top level expertise and analysis 

Through the MEP program, companies pay reduced rates for top level expertise to help them improve their business and operational performance. Customized solutions and hands-on assistance are provided by a network of third party service providers and the program’s team of seasoned manufacturing and professionals.

“The one thing that’s so much fun about the AZ MEP is that we’re just here to help,” said Garafano, who has more than 30 years experience in manufacturing and business in leadership positions with companies such as AT&T, Lucent Technologies, Celiant, Andrew and ON Semiconductor.

This emergency assistance is being made possible through the federal CARES Act. Arizona is receiving $730,000 to help these struggling companies get back on their feet. So far, $350,000 has been approved for 118 companies. 

Why manufacturing is so important to Arizona 

Arizona has seen steady uphill growth in the sector since 2013. One of the biggest benefits of that growth has been higher paying jobs. 

In 2019, there were an average 177,000 manufacturing employees with an average annual compensation of $87,387, according to the National Association of Manufacturers (NAM).  

Manufacturing is also a revenue producer for the state. Manufacturers produced $20.93 billion in manufactured goods exports in 2019. Of that, $9.84 billion was from free trade agreement partners like Mexico and Canada. Small businesses comprised 88 percent of all exporters.

The bulk of manufacturing output in Arizona comes from three sectors: computer and electronics, aerospace and other transportation equipment, and fabricated metal products.

Pandemic changed landscape for manufacturing 

Many sectors have seen dramatic disruptions including Arizona’s most profitable, aerospace and defense. 

So far, companies seeking assistance have needed a variety of services including rebuilding their workforces and finding new uses for their operations and equipment as demand has dried up, Garafano said.  

“Probably one of biggest things we’re doing with these companies is a lot have been hurt financially by the pandemic and they don’t always have a CFO or a higher level finance person, so we’re bringing in CFO people to do analysis on the company and help them understand their cash flow,” he said. “They were healthy and the pandemic made them unhealthy, so we can help them build a plan to get healthy again.”  

Relief needed to make it through the new year    

Allison Gilbreath, executive director of the Arizona Manufacturers Council, said there is a great need for aid for the industry right now. Not only are many industries flailing but other federal covid relief programs are about to dry up.  

“The manufacturing industry in Arizona was hit hard by the Covid-19 pandemic,” Gilbreath said. “Our members were faced with tough choices in 2020 and most manufacturers anticipate pandemic-related challenges well into 2021.”

For more information or to apply for assistance through the MEP program, go to: Arizona MEP emergency assistance program.