Hartford Business Journal

12 Hartford Business Journal • July 13, 2020 • www.HartfordBusiness.com By Sean Teehan steehan@hartfordbusiness.com A state innovation fund that underwrites key manufacturing industry programs has run dry, raising concerns over how to continue initiatives designed to grow and train Connecticut's manufacturing workforce, which is under intense pressure from the economic fallout of the coronavirus pandemic. Connecticut's $75-million Manu- facturing Innovation Fund was cre- ated in 2014 to pay for programs — like apprenticeships and incumbent worker training — aimed at grow- ing jobs and helping the sector deal with a major workforce shortage. Now, only $2.5 million remains, and all of that money has already been allo- cated, causing top industry leaders to urge lawmakers to replenish the fund. The state legislature was poised to take up the issue this year, before COVID-19 forced the 2020 legisla- tive session to end months early. With the state economy and fi- nances in disarray, it's unclear if and when lawmakers will be able to save the fund going forward. "I don't think any of us are under the illusion that getting anything will be easy," said Colin Cooper, Connecticut's chief manufacturing officer, an official state government position. "I don't think it's realistic to think that we'll have an agree- ment on [funding the MIF] in the short [legislative] period between now and the end of the year." Manufacturers across the state have cited workforce development initiatives like apprenticeships and incumbent worker training, as well as the Manufacturing Voucher Program — a matching state grant of up to $50,000 for equipment purchases and other investments — as critical to the sector. "The Manufac- turing Innovation Fund has been a really integral part of manufac- turing success since its incep- tion," said Kelli- Marie Vallieres, an MIF board member who is also CEO of sister companies Sound Manufacturing and Monster Power Equipment in Old Saybrook. "[My companies] have utilized the voucher pro- gram, and did the incumbent worker training program." For now, Cooper said he and others are doing their best to find available money to fund programs most important to the industry, as manu- facturers and policymakers say the state shouldn't lose focus on a sector that could help lift Connecticut out of a coronavirus-induced recession. For example, the state has redirect- ed $5 million from the Manufacturing Assistance Act — which provides loans for infrastructure projects and other investments — to the Manufac- turing Voucher Program, Cooper said. Some of that money has gone to manufacturers assisting in the pro- duction of critical COVID-19-related equipment and supplies. But it's not a long-term fix, he added. "I think the needs are as great as I've ever seen them, and the resources are under great strain," Cooper said. Center stage The voucher program isn't the only MIF-supported initiative critical to manufacturers, industry leaders say. Vallieres, who also serves as co- chair of the Governor's Workforce Council, said workforce develop- ment programs are also critical to the sector, which accounted for 153,400 jobs in Connecticut at the end of May, according to the state Department of Labor. "Manufacturing has kind of taken a center stage because it is one of the largest economic industries in the state, and we contribute a lot to the economic stability of the state," Vallieres said. A 2019 Connecticut Business & Industry Association survey found that 60% of in-state manufacturers ranked recruitment, retention and hiring qualified staff as their most immediate and significant needs, and the number of manufacturing work- ers set to retire over the next decade will outpace the number of younger people entering the industry. The fact that some manufacturers are struggling during a time when many residents are out of work dem- onstrates the need for MIF-supported initiatives like the Step Up program, which subsidizes new employee sala- ries up to 90% for six months, while that worker is still in training. Chris Jewell, co-owner of Bozrah metal-fabrication manufacturer Col- lins & Jewell Co., said his business has used Step Up to hire inexpe- rienced employees who they then trained. Without the subsidy, the company — which employs 92 peo- ple — probably would have passed on some good workers because they wouldn't have taken the financial risk associated with training some- one who might not work out. "I personally think manufactur- ers saw the most value in Step Up because [the subsidy makes them] willing to stick their necks out Funding Gap CT's $75M Manufacturing Innovation Fund runs dry as industry's needs grow Manufacturing Innovation Fund results by fiscal year 2015 2016 2017 2018 2019 Cumulative totals Board-approved funds $26,829,000 $5,347,200 $11,594,865 $14,442,678 $2,404,622 $60,618,365 Companies 120 299 478 383 395 1,675 Jobs retained/created 0 1,911 2,585 4,917 4,925 14,338 Employees trained 1,400 1,360 4,554 7,077 5,797 20,188 Apprentices 0 108 134 151 107 500 Source: 2019 MIF Annual Report Chris Jewell, Co- owner, Collins & Jewell Co. Kelli-Marie Vallieres (right) is the CEO of sister companies Sound Manufacturing and Monster Power Equipment. An employee works a machine at Berlin medical- implant manufacturer TOMZ Corp., which has used state- funded programs to train workers. PHOTO | CONTRIBUTED PHOTO | HBJ FILE

• Cover