1. Trade Adjustment Assistance for Firms
TAAF
Trade Adjustment Assistance for Firms
Slide 1 (MATAAC Front Page)
Good morning,
Thank you for that introduction. It’s a real pleasure to be here among- sycophant that I am- the cream of the crop for West Virginia Economic Development.
As mentioned, my name is Geoff Lucks and I’m a Project Manager at MATAAC.
I want to thank especially David Lieving who has been my rockstar down here. He’s already introduced me to a few companies that I think we’ll be able to help. Not to get too sappy here but it is heartening to see what good can come from proper relationships. So thank you, David.
I’m here today to talk about the program that I work for, MATAAC, which is an abbreviation from the somewhat unwieldy name, the MidAtlantic Trade Adjustment Assistance Center. It’s a mouthful, I know, we didn’t get to choose it but it will make sense in a second.
MATAAC facilitate the growth of small manufacturers who have been injured due to foreign trade in two ways: we provide for them technical assistance (and I’ll get into what that means in a minute) and, here’s the big one, we provide Federal Grant money for business development projects. In other words, we get manufacturers Federal Grant money for specific projects to grow their business.
Geoff Lucks
Project Manager

2. 11 REGIONAL CENTERS NATIONALLY
Slide 2 (Map of TAACs)
We are one of 11 regional non-profits across the United States, representing all 50 states. MATAAC in the MidAtlantic region, represents Pennsylvania, Virginia, Maryland, New Jersey, Delaware, and West Virginia. And DC, though most of their manufacturing is of hot air.
But I work more-or-less under the executive branch through the Economic Development Administration which is, in turn, under the US Department of Commerce.
We are a non-profit, however, and I’ll get to how that works in a minute.

3. MATAAC’s Reason for Coming
Who we are, what we do, how we can help the economy of West Virginia
Proper consideration of MATAAC: When to call
Slide 3 (Reasons for coming)
Just a few preliminary remarks.
I’m really here for two reasons- the first and most obvious reason is to tell you all who we are, what we do, who we help, how we help them, and how we can help the economy of West Virginia. That’s the first and obvious reason.
However, equally if not more important, I think is for me to convey how and when I would like you to think of MATAAC. That is, when speaking to manufacturers, when going through your portfolios, when encountering specific situations or hearing key phrases. I’d like to impart onto you a certain awareness of the existence of this program, such to the extent that when you hear these key things, these key phrases, MATAAC is the first thing that pops into your head.
You see, every client we get is more or less brought to us by an MEP, a consultant, an economic developer. We don’t do a whole lot more than liaising with those types to develop leads. The reason that I say this is that we have found that the singularly biggest driver of our ability to help clients is not based off of more understandable factors like areas with depressed manufacturing, or a locales where the head of a supply chain suddenly disappears. It’s driven by the extent of our relationship with a certain MEP, consultant, or economic developer.
So the second of my main points today is to really drive home how, why, and when to think of MATAAC and in so doing, greatly help the economy of West Virginia.
Help us help you, as the cheesy phrase goes.

4. GENESIS Imbedded within the Trade Act of 1974
Designed to assist firms to adjust to the impact of growing imports resultant from trade barrier reductions
Slide 4 (Some background)
Okay, some quick background.
Trade Adjustment Assistance for firms was imbedded within the Trade Act of We’ve been around that long. Essentially what was happening in the Trade Act of 1974 was a bunch of free trade agreements were being passed and, though very good for the economy of the United States, was also the genesis of some increased competition for manufacturers. So Trade Adjustment Assistance was born.
Now, that was the birth of Trade Adjustment Assistance but I don’t want you to get too hung up on the “trade” aspect of it. I’ll get to more of that in a minute but the trade aspect of it, from our perspective, is most definitely not the most important criterion for a manufacturer to take part in our program.

5. MISSION Firm stabilization Global competitiveness upgrade
A TRADE REMEDY
Firm stabilization
Global competitiveness upgrade
Prevent catastrophic layoffs in the first place
Slide 5 (Mission)
So what is our program.
The mission of MATAAC is essentially threefold. For small manufacturers in the United States, we provide firm stabilization, global competitiveness upgrade, and the prevention of catastrophiuc layoffs in the first place.
Okay, great, but what does that mean in practice. Essentially what trade adjustment assistance does is once we can prove a firm has been quote unquote “trade injured” MATAAC is able to provide that small manufacturer- small being very loosely defined as, say, 100 million in sales or less- provide that small manufacturer with up to $75,000 in Company-matched Federal Grant funds to be used towards business development projects. I’ll get more into that in a minute but that includes basically everything that is not considered ongoing business expenses- salaries, inventories, property insurance, electricity, none of that. We pay for any new business development project- ERP systems, new marketing development, website development, CAD/CAM training, anything like that.
But I’ll get more specific in a bit.

6. CRITERIA TO QUALIFY A negative impact on sales
A negative impact on labor
A demonstration that imports figured importantly in events 1 and 2
Slide 6 (Criteria to qualify)
Now, how does a firm get into our program so that they can be privy to those funds.
MATAAC and the company has to prove- prove to DC- that the firm is quote unquote “trade-injured,” How we do this is three fold:
We have to show a decrease in sales, a decrease in labor, and that foreign trade figured importantly in events 1 and 2. Now, notice I didn’t say a specific number of dollars or percent decrease in sales, or what decrease or impact on labor means, or what labor even means- is it hours, is it total employees?

7. CRITERIA TO QUALIFY, cont.
Vagueness on sales
Vagueness on labor
When in doubt, call us!
Slide 7 (Criteria to qualify, cont.)
We leave this deliberately vague because it goes back to my second reason for being here- in effect, trying to get you to think about MATAAC in the right terms.
There are guidelines that the EDA uses such as a 5% decrease in total sales or a 5% decrease in total employees that would qualify this company as being trade injured, but the fact of the matter is- there are dozens and dozens of combinations of factors that would be considered by the EDA as satisfactory for establishing trade injury.
In other words, when you hear phrases like “sales have been slow lately” or “we just lost a pretty big account” or “we’ve had to lay a few people off” or “we’ve had to cut back on officer’s salaries” or even as ridiculous as “our gross weight of total shipments has decreased by 4% over the last 18 month” though I don’t think anyone’s ever said that to me, those are the only criteria that you should be concerned about.
When in doubt, call us. Let us figure out their eligibility
Finally, how we define “trade injury.” Basically, every product made by every manufacturer in the United States has what’s known as an HTS code associated with it. In fact, they usually have multiple HTS codes associated with multiple products. And what we do is simply find one HTS code that shows a trade deficit in that product.
THAT’S. IT. That’s it.

8. THE PROCESS -Establish the case for Trade Impact
Certification
-Document strengths, weaknesses, solutions & develop a PLAN of ATTACK
Assessment
Slide 8 (The Process)
Now, onto how the program itself works.
You can see here it is essentially a 3-step process. First, the certification. This is what I spoke about earlier regarding the decline in sales and labor and imports factoring materially.
This is essentially what it takes to get in. Once they’re certified as trade-injured, they’re officially in the program. But the funds haven’t become available yet. In order for the fund to become available, we must do our assessment. This comes in the form of what’s known as an Adjustment Plan or a Recovery Plan.
The Adjustment Plan is more or less a plan of attack. What we do is begin with interviewing the key people in the company. Once that is done…
We look at at LEAST four years of financial statements…Basically we do a full analysis of the company. This functions in many roles not the least of which is to try to get them to change their behavior.
…we do a manufacturing review where we… We do a marketing review… a systems review…
Once the Adjustment is written, we ship it on down to DC for approval.
After it’s approved, the funds become available and this is the Implementation. In other words, the firm can start doing projects.
They pick their own consultants and determine their own projects.
-Execute series of projects using outside expertise
Implementation

9. THINGS TO REMEMBER $75,000 maximum grant
Dollar-for-dollar match by the firm
Used for knowledge-based projects
Not assets
Not salaries
Not expenses
In virtually all cases, the client tells us what they want to do & who they want to do it

10. TYPICAL PROJECTS FUNDED
MANUFACTURING
MARKETING
ISO/QS 9000 Preparation & Registration
Market Research
ERP/MRP
Marketing & Sales Strategy
Quality Assurance
Advertising/Sales Promotion/Brochure Design
Product Development, Design & Testing
Web Site Development
Product Certification (CE Mark, UL etc.)
Distribution Analysis & Development
Operations Analysis
Distributor & Sales Representative Search
Manufacturing Technology Review
Sales Force Management Programs
Productivity Improvement
Product Line Evaluation
Product & Process Engineering
Analysis of Competition
Production Planning, Scheduling & Control
Export Development
Inventory Management
Customer Service Analysis
Statistical Process Control
FINANCIAL AND GENERAL MANAGEMENT
Work Methods and Standards
Management Development
Facility & Equipment Review, Selection & Layout
Managerial Finance
Cellular Manufacturing Design & Implementation
Profit Planning/Cash Management/Budgeting
CAD/CAM Selection & Implementation
Debt Restructuring
Material Handling Methods
Cost Management
INFORMATION TECHNOLOGY
Quality Management
MIS Development
Strategic Planning
Hardware/Software Evaluation & Recommendation
Expansion, Diversification & Divestiture Studies
System Conversion & Enhancements
Organizational Analysis
Custom Programming
Human Resources Planning & Executive Search
Integrated Manufacturing Systems
Customized Training Design & Implementation
Electronic Data Interchange (EDI)
Compensation & Incentive Programs
Office Automation • E-Commerce
Succession Planning
Software Customization
Core Strategic Redirection
Etc.

11. Results
Improved competitiveness is, by definition, growth in market share. Growth in at least three of four key metrics defines share growth:
Sales
Operating earnings
Employment
Productivity
The proportion of MATAAC’s portfolio achieving at least 3 out of 4?
2009 – 30%
2010 – 44%
2011 – 48.4%
2012 – 58.2%
We define success in the program as “Improved Competitiveness.” This is what the program was designed to do and we believe how we test that should reflect that design.
How do we define, “Improved competitiveness.” Well, we define that by growth in market share. And we define growth in market share, in turn by that firm achieving success in three of the four key metrics you see here.
See, we track every company that goes through our program. We ask them their sales numbers, their operating earnings, and their employment. We can tell productivity through sales and employment.
It’s important to remember that every firm that enters into our program is failing in some way. They have at best flat-sh sales and at best flat-ish employment.
As you can see, by 2012, a few years after the financial crisis, over 58% of our companies have achieved 3 out of the 4 metrics. And each one of these companies was failing when it entered.
In other words, this program works.

12. And here you can see the aggregate of each one of the companies
And here you can see the aggregate of each one of the companies. I know you probably can’t see those numbers but…
Return on Human Capital is one of the more esoteric criterion

13. Trade Adjustment Assistance for Firms
Thank you!
TAAF
Trade Adjustment Assistance for Firms
Geoff Lucks
Project Manager