Michigan automotive suppliers and manufacturers invited to business diversification summit, chance for $10,000 state matching grant

By Melissa Burden | The Flint Journal
September 1, 2009

FLINT, Michigan -- Tim Johnson has seen his predominately automotive-related coatings business drop from more than $5 million in annual sales to less than $2 million over the past year and a half.

Flint Journal file photo

Tim Johnson, co-owner of Universal Coating Inc. in Genesee Township, shows a sampling of products they have coated in this 2005 file photo.

Universal Coating Inc., the Genesee Township phosphate, high-heat and decorative coatings company he co-owns, had to lay off 60 employees during that time as business fell off by 75 percent.

"We knew we needed to do something to get away from the stranglehold that the automotive industry had on us," Johnson said. "We went up and down with their roller coaster they were on."

Earlier this year, Johnson attended a Michigan Economic Development Corp. hosted diversification summit to learn more about what it would take to diversify into the aerospace industry.

Johnson has received a matching grant from the state of Michigan and has been able to bring specialists in to help him obtain required certification to do work in the aerospace industry.

"Once we get all the approvals needed ... then we start the long process of just getting into companies, just to try to get the quotes," Johnson said. "(It's) probably going to be, unfortunately, two to three years before we eventually even see any real, large jobs starting to come through from it."

Flint Journal file photo

In this 2005 file photo, Universal Coating Inc. co-owner Tim Johnson holds some of the parts the Genesee Township-based company coats. The company is trying to diversify into the aerospace industry after losing much of its automotive business.

Michigan manufacturers can learn more about diversifying into aerospace, medical devices, defense and homeland security, and wind/solar energy at a summit scheduled Sept. 16 at the Sarvis Center in Flint.

Marlene Nicol, director of Michigan Manufacturing Technology Center-Genesee Valley that works with small- and medium-sized manufacturers, hopes 100 people representing manufacturers will attend, many from Genesee and Lapeer counties. In late August, about 20 people were signed up.

The summits, under way for several months and scheduled through the end of the year, have attracted more than 2,000 attendees from 1,000 companies, said Bridget Beckman, a MEDC spokesperson.

With automotive bankruptcies, the recession hitting and the prospect of much more job loss, the MEDC saw the need to ramp up its outreach efforts to auto suppliers and manufacturers and push diversification into the four emerging industries, Beckman said.

The industries have growth possibilities in Michigan and also can help retain jobs, Beckman said.

"There's several companies that with some slight modification to their lines, they can mold or manufacturer parts that would be used to build a wind turbine," Beckman said.

Diversification Summit • What: Michigan auto suppliers and other manufacturers can hear from various speakers about how to diversify into wind/solar energy, aerospace, medical devices, and defense and homeland security. You also can learn more about how to qualify for an up to $10,000 matching grant from the state to help you diversify. • When: 8 a.m.-2:30 p.m. Sept. 16. • Where: Sarvis Center, 1231 E. Kearsley St., Flint. • Cost: $50 per person (includes materials and lunch). • Details: www.MichiganAdvantage.org/ Diversification • Sponsors: The Genesee Regional Chamber of Commerce, Michigan Economic Development Corp., the Michigan Manufacturing Technology Center and other partners. • Register: Call Karena Hamlet, (810) 600-1440 or log onto www.thegrcc.org/ economic_development/ summit/summit_form.html

Companies attending a summit are invited to complete a survey about their ability to diversify into one of the emerging markets. Companies the state deems successful to diversify can receive up to a $10,000 matching grant from its Economic Development Job Training program.

The funds are intended to speed up the diversification process for Michigan businesses and cover things such as quality and specific sector certifications, sales and marketing, Web development and market studies.

Two Flint-based companies, Genesee Packaging and Security Packaging/SCM, also are involved in the diversification program and are receiving training to grow business in the defense industry, said Dustin Frigy, program director of the Procurement Technical Assistance Center at the Genesee Regional Chamber of Commerce.

At the end of August, the state had approved 93 companies for training under the diversification program and had an additional 300 companies under consideration, Beckman said.

"We need to diversify our economy, so this is an opportunity to get a leg up," Nicol said. "(I would) encourage them to take every opportunity they can to find other industries they're suited to work in."

Johnson, whose company has less than 20 employees but is slowly hiring back workers, said that summit presenters paint a rosy picture of diversifying. But Johnson cautions that the process takes a long time and you can't simply flip a switch and start making money.

Universal Coating has done work for the military in the past and Johnson said the aerospace industry has additional capacity needs.

Johnson said the future is bright for Universal Coating, which remains committed to the automotive industry and hopes to branch into aerospace "and all the different markets that are out there that need the high quality specialty coatings."

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