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Trade Adjustment Assistance for Firms Program Fiscal Year 2010 Annual Report

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Start Preamble

AGENCY:

Economic Development Administration, Commerce.

ACTION:

Notice.

SUMMARY:

This annual report is submitted in accordance with Section 1866 of the Trade and Globalization Adjustment Assistance Act (TGAAA) of 2009, which was included as subtitle I (letter “I”) of title I of Division B of the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5, 123 Stat. 115, at 367). Section 1866 of the TGAAA directs the Secretary of Commerce to submit to Congress an annual report on the Trade Adjustment Assistance for Firms (TAAF) Program by the 15th of December each year. The TAAF Program is one of four Trade Adjustment Assistance (TAA) Programs authorized by the Trade Act of 1974 (19 U.S.C. 2341 et seq.) (Trade Act).

Administered by the Department of Commerce's Economic Development Administration (EDA), the goal of the TAAF Program is to help economically distressed U.S. businesses develop strategies to compete in the global economy. In general, the program provides cost-sharing technical assistance to eligible businesses to create and implement targeted business recovery plans, called Adjustment Proposals under the program. Firms contribute a matching share to create and implement their plan.

Technical assistance is provided through a nationwide network of eleven EDA-funded Trade Adjustment Assistance Centers (TAACs), which are either non-profits or university-affiliated. The TAACs provide assistance to firms petitioning EDA for certification of eligibility under the program and in the development and implementation of business recovery plans.

Firms that completed the TAAF Program in FY 2008 report that at completion, average sales were $10.3 million, average employment was 73, and average productivity was $140,977 (sales per employee). One year after completing the program (FY 2009), firms report that average sales increased by one percent, average employment decreased by 10 percent, and average productivity increased by 11 percent. The Bureau of Labor Statistics (BLS) reported that nationwide for the manufacturing industry in FY 2009, average employment decreased 12 percent and average productivity increased by 4 percent. Two years after completing the program (FY 2010), firms report that average sales decreased by 14 percent, average employment decreased by 16 percent, and average productivity increased by 3 percent. BLS reported that nationwide for the manufacturing industry in FY 2010, average employment decreased 12 percent and average productivity increased by 9 percent.

Overall, there has been an increase in the demand for the TAAF Program in FY 2010, as demonstrated by the increase in the number of petitions for certification and Adjustment Proposals submitted to EDA for approval. In FY 2010, EDA approved an additional 114 petitions, a 53 percent increase as compared to FY 2009; and approved an additional 93 Adjustment Proposals, a 54 percent increase as compared to FY 2009.

The addition of TAAF staff resources facilitated EDA's ability to improve processing time for petitions and Adjustment Proposals in FY 2010. Although there was a spike in petitions and Adjustment Proposals, EDA successfully met the 40-day processing deadline to make a final determination for petitions accepted for filing; and the 60-day processing deadline for approval of Adjustment Proposals as required in the TGAAA. In fact, the average processing time for petitions has started to decline below the 40-day requirement and the average processing time for Adjustment Proposals is below 30 days.

ADDRESSES:

Trade Adjustment Assistance for Firms Division, Room D100, Economic Development Start Printed Page 4615Administration, U.S. Department of Commerce, Washington, DC 20230.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Bryan Borlik, Director of the TAAF Program, 202-482-3901.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Table of Contents

Introduction

Program Description

Program Initiative

Results/Findings

Data for This Report

(1) The Number of Firms That Inquired About the Program

(2) The Number of Petitions Filed Under Section 251

(3) The Number of Petitions Certified and Denied

(4) The Average Time for Processing Petitions

(5) The Number of Petitions Filed and Firms Certified for Each Congressional District of the United States

(6) The Number of Firms That Received Assistance in Preparing Their Petitions

(7) The Number of Firms That Received Assistance Developing Business Recovery Plans (Adjustment Proposals)

(8) The Number of Adjustment Proposals Approved and Denied by the Secretary of Commerce

(9) Sales, Employment, and Productivity at Each Firm Participating in the Program at the Time of Certification

(10) Sales, Employment, and Productivity at Each Firm Upon Completion of the Program and Each Year for the Two-Year Period Following Completion

(11) The Financial Assistance Received by Each Firm Participating in the Program

(12) The Financial Contribution Made by Each Firm Participating in the Program

(13) The Types of Technical Assistance Included in the Adjustment Proposals of Firms Participating in the Program

(14) The Number of Firms Leaving the Program Before Completing the Project or Projects in Their Adjustment Proposals and the Reason the Project Was Not Completed

Conclusion

Introduction

This report is provided in compliance with Section 1866 of the Trade and Globalization Adjustment Assistance Act (TGAAA) of 2009, which was included as subtitle I (letter “I”) of title I of Division B of the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5, 123 Stat. 115, at 367). Section 1866 of the TGAAA directs the Secretary of Commerce to provide an annual report on the Trade Adjustment Assistance for Firms (TAAF) program by the 15th of December each year. Section 1866 of the TGAAA states:

IN GENERAL.—Not later than December 15, 2009, and each year thereafter, the Secretary of Commerce shall prepare a report containing data regarding the trade adjustment assistance for firms program provided for in chapter 3 of title II of the Trade Act of 1974 (19 U.S.C. 2341 et seq.) for the preceding fiscal year.

This report will provide findings and results to the extent that the data is available on the following 14 measures:

1. The number of firms that inquired about the program.

2. The number of petitions filed under section 251.

3. The number of petitions certified and denied.

4. The average time for processing petitions.

5. The number of petitions filed and firms certified for each congressional district of the United States.

6. The number of firms that received assistance in preparing their petitions.

7. The number of firms that received assistance developing business recovery plans (Adjustment Proposals).

8. The number of Adjustment Proposals approved and denied by the Secretary of Commerce.

9. Sales, employment, and productivity at each firm participating in the program at the time of certification.

10. Sales, employment, and productivity at each firm upon completion of the program and each year for the two-year period following completion.

11. The financial assistance received by each firm participating in the program.

12. The financial contribution made by each firm participating in the program.

13. The types of technical assistance included in the Adjustment Proposals of firms participating in the program.

14. The number of firms leaving the program before completing the project or projects in their Adjustment Proposals and the reason the project was not completed.

Program Description

The TAAF program is one of four Trade Adjustment Assistance (TAA) programs authorized under the Trade Act of 1974 (19 U.S.C. 2341 et seq.) (Trade Act). The responsibility for administering the TAAF program is delegated by the Secretary of Commerce to the Economic Development Administration (EDA). TAAF program provides technical assistance to manufacturers and service firms affected by import competition to help the firms develop and implement projects to regain global competitiveness.

The mission of the TAAF Program is to help U.S. firms regain competitiveness in the global economy. Import-impacted U.S. manufacturing, production, and service firms can receive matching funds for projects that expand markets, strengthen operations, and sharpen competitiveness through TAAF. The program provides assistance in the development of business recovery plans, which are known as Adjustment Proposals under Section 252 of the Trade Act, and matching funds to implement projects outlined in the Adjustment Proposals.

The TAAF Program supports a national network of 11 non-profit or university-affiliated Trade Adjustment Assistance Centers (TAACs) to help U.S. manufacturing, production, and service firms in all fifty states, the District of Columbia, and the Commonwealth of Puerto Rico. Firms work with the TAACs to apply for certification for TAAF assistance, and prepare and implement strategies to guide their economic recovery.

The other TAA programs are TAA for Workers, Farmers, and Communities, which are administered by the Departments of Labor, Agriculture, and Commerce through EDA, respectively.

Exhibit 1: TAA Programs

Start Printed Page 4616

Program Initiative

As noted above, the TAAF Program provides technical assistance in the development and implementation of Adjustment Proposals. Projects are aimed at improving a firm's competitive position. Specifically, funds are applied toward the cost of consultants, engineers, designers, or industry experts for improvement projects in targeted areas that can better a firm's position, such as engineering, information technology, management, market development, marketing, new product development, quality improvement, and sales. Funds are not provided directly to firms; instead EDA funds TAACs and TAACs pay a cost-shared proportion of the cost to secure specialized business consultants.

To certify a firm as eligible to apply for adjustment assistance, the Secretary must determine that three conditions are met:

1. A significant number or proportion of the workers in the firm have been or are threatened to be totally or partially separated;

2. Sales and/or production of the firm have decreased absolutely, or sales and/or production of an article or service that accounted for at least 25 percent of total production or sales of the firm during the 12, 24, or 36 months preceding the most recent 12, 24, or 36-month period for which data are available have decreased absolutely; and

3. Increased imports of articles like or directly competitive with articles produced or services provided by the firm have “contributed importantly” to both the layoffs and the decline in sales and/or production.

Exhibit 2: TAACs and Their Respective Service Areas

Start Printed Page 4617

The main responsibilities of the TAACS include:

  • Assisting firms in preparing their petitions for TAAF. Firms are not charged for any assistance related to preparing a petition.
  • Once a petition has been approved, TAACs work closely with firm management to identify the firm's strengths and weaknesses and develop a customized Adjustment Proposal designed to stimulate recovery and growth. The program pays up to 75% of the cost of developing an Adjustment Proposal and the firm must pay the rest. EDA must approve all Adjustment Proposals to ensure they conform to statutory and regulatory requirements.
  • After an Adjustment Proposal has been approved, company management and TAAC staff jointly identify consultants with the specific expertise required to assist the firm.
  • Under the TAAF Program, EDA shares the cost of Adjustment Proposal task implementation. For an Adjustment Proposal in which proposed tasks total $30,000 or less, EDA will provide 75 percent of the cost and the firm is responsible for the balance. For an Adjustment Proposal in which proposed tasks total over $30,000, EDA and the firm share the implementation costs evenly; EDA pays 50 percent of the total cost and the firm pays 50 percent. Due to limited program funding, EDA limits its share of technical assistance to a certified firm to $75,000. After a competitive procurement process, the TAAC and the firm generally contract with private consultants to implement the Adjustment Proposal.

There are three main phases to receiving technical assistance under the program. The phases are (1) petitioning for certification, (2) recovery planning, and (3) project implementation.

Exhibit 3: Program Phases

Start Printed Page 4618

Phase I—Petitioning for Certification

The first step to receiving assistance is the submission of a petition to EDA to be certified as a trade impacted firm. This petition is Form ED-840P “Petition by a Firm for Certification of Eligibility to Apply for Trade Adjustment Assistance” and any supporting documentation. Certification specialists within the TAACs generally work with the firm at no cost to complete and submit a petition to EDA.

Upon receipt of the petition, EDA performs a thorough analysis of the petition and supporting documents to determine if the petition is complete and may be accepted. EDA is required to make a final determination on the petition within 40 days of accepting a petition.[1]

Phase II—Recovery Planning

Certified firms then work with TAAC staff to develop a customized Adjustment Proposal and submit to EDA for approval. Once an Adjustment Proposal has been submitted, EDA is required to make a final determination within 60 days.

Phase III—Adjustment Proposal Implementation

The firm works with consultants to implement projects in an approved Adjustment Proposal. As projects are implemented and if the firm is satisfied with the work, the firm will first pay their match to the consultant, and then send a notice to the TAAC stating that they are satisfied with the work and that they have paid their matching share. The TAAC will then pay the Federal matching share. Firms have up to five years from the date of an Adjustment Proposal's approval to implement it, unless they receive approval for an extension. Generally, firms complete the implementation of their Adjustment Proposals over a two-year period.

Results/Findings

Data for This Report

The data used in this report was collected from the TAACs as part of their reporting requirements, petitions for certification, and the Adjustment Proposals submitted by the TAACs on behalf of firms. Data from these sources were recorded into a central database by Eligibility Reviewers at EDA. Results for average processing times and the number of approved and denied petitions and Adjustment Proposal were derived by EDA.

(1) The Number of Firms That Inquired About the Program

In FY 2010, TAACs received 3,446 inquiries about the TAAF Program.

Exhibit 4: Inquiries about the TAAF Program by TAAC

TAACNumber of firms that inquired about the TAAF Program
Great Lakes106
Mid-America137
MidAtlantic376
Midwest82
New England163
New York State134
Northwest806
Rocky Mountain351
Southeastern42
Southwest280
Western969
Total3,446

(2) The Number of Petitions Filed Under Section 251

(3) The Number of Petitions Certified and Denied

(4) The Average Time for Processing Petitions

In FY 2010, 305 petitions were filed under Section 251 of the Trade Act, up an additional 27 petitions, a 10 percent increase compared to the number of petitions filed in FY 2009. EDA certified 330 petitions, up an additional 114 petitions, a 53 percent increase compared to the number of certifications in FY 2009. Petitions are certified on a rolling basis throughout the year. Petitions certified in FY 2010 may be the result of those filed or accepted in FY 2009; and petitions filed or accepted in FY 2010 may not result in certification in FY 2010.

The addition of TAAF staff resources facilitated EDA's ability to improve processing time for petitions in FY 2010. Although there was a spike in petitions, EDA successfully met the 40-day processing deadline to make a final determination for petitions accepted for Start Printed Page 4619filing as required in the TGAAA. In fact, the average processing time for petitions has started to decline below the 40-day requirement.

Exhibit 5: Petition Activity: FY 2008-FY 2010

FYNumber of petitions filedNumber of petitions accepted for filingNumber of petitions certifiedNumber of petitions deniedAverage days between acceptance and certificationAverage days between filing and certification
2008189190188045N/A
200927824421614489
201030532533004074
% Change (2009 to 2010)10%33%53%N/A(9)%(17)%

Exhibit 6: Petitions Filed by TAAC: FY 2008-FY 2010

Exhibit 7: Petitions Accepted by TAAC: FY 2008-FY 2010

Exhibit 8: Petitions Certified by TAAC: FY 2008-FY 2010

Start Printed Page 4620

Exhibit 9: Petitions Filed, Accepted and Certified by TAAC: FY 2010 2

TAACNumber of petitions filed 2Number of petitions accepted for filing 2Number of petitions certified
Great Lakes141619
Mid-America263028
MidAtlantic575958
Midwest333640
New England535656
New York State222625
Northwest192221
Rocky Mountain171618
Southeastern333030
Southwest232523
Western81212
Total305328330

Exhibit 10: Petitions Filed, Accepted, and Certified by TAAC: FY 2010

Start Printed Page 4621

Exhibit 11: Firms Certified for TAAF by Industry: FY 2010

The majority of petitions certified for TAAF were submitted by firms in the manufacturing industry. Firms in wholesale trade and technical services rounded out the top three industries. Approximately 7 percent of firms certified in FY 2010 were service sector firms. Demand from service firms in FY 2011 is likely to increase at the same rate as FY 2010.

(5) The Number of Petitions Filed and Firms Certified for Each Congressional District of the United States

Exhibit 12: Petitions Filed by Congressional District: FY 2010

Congressional district(s)No. of petitions filed
AK
At Large1
AL
41
AR
11
24
32
AZ
51
61
CA
131
301
321
341
431
CO
12
22
33
41
51
CT
12
22
51
61
FL
101
211
221
241
GA
22
51
61
71
91
HI
11
ID
13
IL
32
41
53
63
81
101
131
144
161
171
IN
21
71
81
131
KS
12
22
31
42
KY
11
22
31
LA
22
33
61
71
MA
14
33
43
53
63
73
94
102
MD
Start Printed Page 4622
21
41
ME
13
23
MI
11
71
92
113
121
MN
32
41
51
61
71
MO
11
21
41
52
61
74
82
MS
11
MT
At Large3
NC
72
81
91
101
111
121
ND
13
NH
14
NJ
81
121
NY
11
31
82
202
221
256
264
271
282
292
OH
41
141
161
OK
15
21
33
OR
31
42
PA
33
41
52
61
73
82
92
102
118
121
132
158
163
176
181
196
RI
18
23
SC
22
31
53
62
SD
At Large1
TN
41
61
TX
31
124
131
151
UT
11
21
31
VA
41
61
VT
11
WA
41
52
62
72
92
WI
11
41
54
62
71

Exhibit 13: Petitions Certified by Congressional District: FY 2010

Congressional district(s)No. of petitions certified
AK
At Large2
AL
41
AR
11
24
32
AZ
41
CA
71
201
261
301
311
321
341
431
481
CO
11
22
33
41
51
61
CT
12
22
51
61
FL
101
221
241
GA6
22
31
51
61
91
HI
12
IA
31
ID
13
IL
32
42
53
64
71
82
101
131
145
161
171
IN
21
71
81
131
KS
12
21
31
42
KY
11
31
LA
22
32
61
71
MA
14
34
43
53
63
73
95
102
MD
21
Start Printed Page 4623
41
ME
13
23
MI
11
71
92
101
114
121
MN
22
31
41
51
61
MO
12
21
31
42
52
61
75
81
MS
11
MT
At Large5
NC
11
51
72
91
102
111
121
ND
11
At Large1
NH
15
21
NY
11
31
81
203
256
265
271
284
293
OH
31
41
81
101
141
161
OK
15
22
32
OR
31
42
PA
33
41
63
74
82
92
103
117
121
131
158
162
177
181
198
RI
18
23
SC
21
31
52
62
SD
At Large1
TN
41
61
TX
31
124
151
161
211
UT
11
21
32
281
VA
41
62
WA
41
52
61
73
91
WI
31
41
55
63

(6) The Number of Firms that Received Assistance in Preparing Their Petitions

In FY 2010, on average, 232 firms received assistance in preparing petitions per quarter. The total number of firms that received technical assistance varies each quarter as assistance is provided throughout the year. A firm receiving assistance in one quarter may continue to receive assistance in the following quarter.

Exhibit 14: Petition Assistance Activity per Quarter: FY 2010

TAACAverage No. of firms receiving assistance with preparing petitions (per quarter)
Great Lakes8
Mid-America61
MidAtlantic10
Midwest49
New England9
New York State15
Northwest15
Rocky Mountain21
Southeastern20
Southwest5
Western19
Total232

(7) The Number of Firms That Received Assistance Developing Business Recovery Plans (Adjustment Proposals)

In FY 2010, on average, 146 firms received assistance in developing Adjustment Proposals; and 690 firms received assistance in the implementation of Adjustment Proposal plans per quarter. The total number of firms that received technical assistance varies each quarter as assistance is provided throughout the year. A firm receiving assistance in one quarter may continue to receive assistance in the following quarter.

Exhibit 15: Adjustment Proposal Development Activity per Quarter: FY 2010

TAACAverage No. of firms receiving assistance with adjustment proposal development (per quarter)Average No. of firms receiving assistance with adjustment proposal implementation (per quarter)
Great Lakes458
Mid-America1463
MidAtlantic1385
Midwest1364
New England16103
New York State1330
Northwest561
Rocky Mountain1879
Southeastern2154
Southwest1654
Western1339
Total146690

(8) The Number of Adjustment Proposals Approved and Denied by the Secretary of Commerce

In FY 2010, EDA approved all 265 Adjustment Proposals that were submitted; an additional 93 business Start Printed Page 4624recovery plans, a 54 percent increase as compared to FY 2009.

Exhibit 16: Summary of Adjustment Proposals Approved: FY 2008-FY 2010

FYNumber of adjustment proposals approvedTotal government share (millions)Total firm share (millions)Total projected adjustment proposal costs (millions)Average government assistance per firm
2008139$7.9$7.5$15.4$56,835
2009172$10.3$9.8$20.2$59,884
2010265$16.4$15.6$32.1$61,958
% Change (2009 to 2010)54%59%59%59%3%

Exhibit 17: Adjustment Proposals Approved by TAAC: FY 2008-FY 2010

Exhibit 18: Adjustment Proposals Approved by TAAC: FY 2010

TAACNumber of adjustment proposals approved
Great Lakes24
Mid-America25
MidAtlantic29
Midwest40
New England48
New York State14
Northwest20
Rocky Mountain17
Southeastern23
Southwest16
Western9
Total265

(9) Sales, Employment, and Productivity at Each Firm Participating in the Program at the Time of Certification

The average sales, employment and productivity of firms certified into the program in FY 2010 was higher than that of firms certified in FY 2009. For the purposes of this report, productivity is defined as net sales per employee. Since the certified firms are in various industries, which have a variety of ways to measure productivity, sales per employee was chosen as the productivity measure. This measure is used because it can be generally applied to all certified firms.

Exhibit 19: Comparison of Average Sales, Employment, and Productivity at Firms at the Time of Certification: FY 2008-FY 2010

FYAverage salesAverage employmentAverage productivity
2008$13,081,99382$159,537
2009$10,338,42279$130,866
2010$19,137,139138$138,675
% Change (2009 to 2010)85%74%15%
Start Printed Page 4625

Exhibit 20: Summary Comparison of Average Sales, Employment, and Productivity for Firms at the Time of Certification by TAAC: FY 2010

TAACAverage salesAverage employmentAverage productivity
Great Lakes$35,127,822177$198,462
Mid-America10,265,21488116,650
MidAtlantic15,122,65589169,917
Midwest22,062,757114193,533
New England7,632,08051148,649
New York State14,585,42191160,279
Northwest8,720,39572121,117
Rocky Mountain43,725,204203215,395
Southeastern11,052,02168162,530
Southwest7,529,64536620,573
Western34,685,316196176,966
Total19,137,139138138,675

Exhibit 21: Summary of Sales, Employment, and Productivity at Each Firm Participating in the Program at the Time of Certification: FY 2010

Firm No.Sales ($)EmploymentProductivity ($)
—2118051509$5,333,04023$231,871
—21112495091,208,2587172,608
—21048029262,455,4613962,961
—21039068471,328,00010132,800
—208345031342,874,044185231,752
—207317563616,101,898137117,532
—206828752211,938,99931385,129
—205913672560,764,758181335,717
—20238745642,518,00021119,905
—20102361413,019,17825120,767
—2007895508613,9066102,318
—19978244644,171,40141102,795
—19904578707,559,3509877,136
—197358051045,487,13945799,534
—19582144887,467,36949153,429
—19563766751,780,6062474,973
—1941157067612,1245122,425
—18995323972,037,2574479,355
—1898904502315,272563,054
—18845515029,040,00058155,862
—18808430735,265,70841128,432
—18388777923,483,60931112,374
—182836928517,140,309162105,804
—17597583416,010,97150120,219
—17421772699,976,65362160,914
—174096009313,154,39045292,320
—174008629126,940,727147183,270
—17398425182,310,0682785,558
—170471541812,875,15217175,293
—16614851633,393,78031109,477
—16350695917,537,00051147,784
—15424483289,922,57812082,688
—15207013044,697,3107761,004
—14842229591,444,01411131,274
—14716612056,322,00040158,050
—146107351592,484,000302306,238
—1454186553282,778470,695
—14327383843,528,89033106,936
—142733416737,484,000359104,412
—1417226723983,0061189,364
—12817246034,028,00038106,000
—124343997422,596,95699228,252
—124142711010,487,391104100,840
—1187326382707,3414176,835
—11690453595,046,00043117,349
Start Printed Page 4626
—112922383810,578,429104101,716
—11287031111,354,6201496,759
—11263268682,212,06419116,424
—11169125765,470,62025218,825
—109745935892,988,380461201,601
—108613045026,260,884105250,509
—103862144114,126,803103137,153
—100432997117,601,176165106,674
—100024043315,690,666102153,830
—9991058492,547,00021121,286
—9952266504,930,00024205,417
—9479621164,549,56834133,811
—9349755614,495,54139115,270
—8853655633,121,6413491,813
—85703117811,353,00099114,677
—852461053932,3871436,520
—8430558801,606,3943644,622
—84016602510,585,95710997,119
—8069449839,609,07785113,048
—7945753051,406,8043468,935
—78848491215,056,348108139,411
—779297214108,005,394736146,746
—75977948943,715,000160273,219
—7261216341,660,14514118,582
—70233065412,073,75112596,590
—6925651386,173,76623268,425
—68113974413,963,91185164,281
—6743573475,304,00052102,000
—67280930910,311,62928368,272
—65490180610,811,00053203,981
—6222077793,122,0274176,147
—5918890872,346,2852379,900
—58572500516,463,96185193,694
—5603186124,131,68722190,664
—554924474171,103357,034
—550588573943,3481097,554
—5438093339,295,72825371,829
—50498995125,003,96678320,235
—43690958911,245,91233733,371
—429565845194,828824,354
—426260672677,4321256,453
—41326225816,722,097104160,789
—3703738382,195,09014156,792
—3568573498,882,30010584,593
—34788271210,155,48050819,991
—3347957662,737,5053188,307
—3346915522,927,56325117,103
—32524677516,232,121108150,297
—3223891373,344,28432104,509
—311586268939,8575187,971
—29771618334,926,049192181,509
—2637741284,637,86942110,425
—2293372621,529,8151884,990
—22271474710,140,68215764,590
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Start Printed Page 4628
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Start Printed Page 4629
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(10) Sales, Employment, and Productivity at Each Firm Upon Completion of the Program and Each Year for the Two-year Period Following Completion

Firms that completed the TAAF Program in FY 2008 report that at completion, average sales were $10.9 million, average employment was 73, and average productivity was $150,674 (sales per employee).

Between FY 2008 and FY 2009, one year after completing the program, firms report that average sales increased by one percent, average employment decreased by 10 percent, and average productivity increased by 11 percent. The Bureau of Labor Statistics (BLS) reports that nationwide for the manufacturing industry, average employment decreased 12 percent and Start Printed Page 4630average productivity increased by 4 percent.

Between FY 2008 and FY 2010, two years after completing the program, firms report that average sales decreased by 14 percent, average employment decreased by 16 percent, and average productivity increased by 3 percent. BLS reports that nationwide for the manufacturing industry, average employment decreased 12 percent and average productivity increased by 9 percent.

For the purposes of this report, data was reported only for firms where all data was available. Since the certified firms are in various industries, which have a variety of ways to measure productivity, sales per employee was chosen as the productivity measure. This measure is used because it can be generally applied to all certified firms. However, BLS' productivity measures relate output to the labor hours used in the production of that output.

Exhibit 22: Summary of Average Sales, Employment, and Productivity at Firms Upon Completion of the Program and the One-Year Period Following Completion

Program completionAverage salesAverage employmentAverage productivity
Completion (FY 2008)$10,999,20073$150,674
1st Year Following Completion (FY 2009)$11,079,46066$167,871
% Change 1st Year Following Completion1%−10%11%

Exhibit 23: Summary of Average Sales, Employment, and Productivity at Firms Upon Completion of the Program and the Two-Year Period Following Completion

Program completionAverage salesAverage employmentAverage productivity
Completion (FY 2008)$10,999,20073$150,674
2nd Year Following Completion (FY 2010)$9,498,47961$155,713
% Change 2nd Year Following Completion−14%−16%3%

Exhibit 24: Sales, Employment, and Productivity at Each Firm Upon Completion of the Program and Two-Year Period Following Completion

Firm IDAverage sales at completion (FY 2008)Average sales 1st yr following completion (FY 2009)Average sales 2nd yr following completion (FY 2010)Average employment at completion (FY 2008)Average employment 1st yr following completion (FY 2009)Average employment 2nd yr following completion (FY 2010)Average productivity at completion (FY 2008)Average productivity 1st yr following completion (FY 2009)Average productivity 2nd yr following completion (FY 2010)
FY08-01$39,390,601$37,698,350$21,692,925325275173$121,202$137,085$125,393
FY08-0510,630,00010,800,0004,800,000645538166,094196,364126,316
FY08-0328,400,00031,500,00025,150,000190180158149,474175,000159,177
FY08-045,130,0005,800,0005,325,204333531155,455165,714171,781
FY08-0216,500,00017,800,00017,000,000535556311,321323,636303,571
FY08-233,000,0002,000,0002,000,000252523120,00080,00086,957
FY08-247,500,0007,000,0007,020,687676565111,940107,692108,011
FY08-202,000,0001,000,0002,400,00021102295,238100,000109,091
FY08-254,200,0004,000,0004,200,000333133127,273129,032127,273
FY08-261,700,0001,100,0001,200,000999188,889122,222133,333
FY08-216,056,4585,500,0003,006,918273121224,313177,419143,187
FY08-283,070,0003,080,0002,300,000191815161,579171,111153,333
FY08-2210,200,0009,000,00010,000,000585557175,862163,636175,439
FY08-2718,750,00017,000,00018,500,000868085218,023212,500217,647
FY08-30275,000248,000229,00068745,83331,00032,714
FY08-29313,000416,000533,00022121214,22734,66744,417
FY08-343,081,0002,220,0001,597,00039252279,00088,80072,591
FY08-3117,500,00014,200,00010,900,00019516012089,74488,75090,833
FY08-323,210,0004,273,0004,637,00036413589,167104,220132,486
FY08-3618,592,00018,227,00016,852,000130105125143,015173,590134,816
FY08-37354,000859,0001,117,00057670,800122,714186,167
FY08-3330,000,00040,000,00040,000,000200100120150,000400,000333,333
FY08-3514,300,00014,200,00013,000,000383537376,316405,714351,351
FY08-386,500,0007,100,0008,400,000506880130,000104,412105,000
FY08-3937,000,00040,000,00043,000,00044042943984,09193,24097,950
FY08-417,500,0008,900,0009,400,000252931300,000306,897303,226
FY08-408,500,00010,500,00010,750,000152528566,667420,000383,929
FY08-44911,948881,669430,40120161145,59755,10439,127
FY08-421,972,4251,629,361945,420181414109,579116,38367,530
FY08-4319,493,38215,767,00019,000,000888686221,516183,337220,930
FY08-47520,610452,662301,63586565,07675,44460,327
FY08-494,250,0003,386,3461,818,408221915193,182178,229121,227
FY08-57769,184816,322674,25511111069,92674,21167,426
Start Printed Page 4631
FY08-562,960,7193,027,5762,292,15437373380,01981,82669,459
FY08-537,278,5836,535,8274,675,983433636169,269181,551129,888
FY08-526,160,6776,101,3634,593,196342627181,196234,668170,118
FY08-5441,000,00040,000,00022,500,000757075546,667571,429300,000
FY08-5529,000,00028,000,00018,700,000200204147145,000137,255127,211
Total10,299,20011,079,4609,498,479736661150,674167,871155,713

(11) The Financial Assistance Received by Each Firm Participating in the Program

(12) The Financial Contribution Made by Each Firm Participating in the Program

In FY 2010, firms received $8.7 million in technical assistance provided by the TAACs to prepare petitions; and in the development and implementation of Adjustment Proposals (often through business consultants and other experts). Firms participating in the program contributed $6.1 million towards the development and implementation of Adjustment Proposals. Funds are not provided directly to firms; instead EDA funds TAACs and TAACs pay a cost-shared proportion of the cost to secure specialized business consultants.

Exhibit 25: Summary of TAAF Program Financial Assistance by TAAC: FY 2010

TAACTAAC assistance to firmsAmount paid to consultants by the TAACsTotal TAAC assistance to firms (TAACs + consultants)Financial contribution by the firms
Great Lakes$196,060$677,560$873,620$646,809
Mid-America93,836466,399560,235466,399
MidAtlantic309,655910,5621,220,217910,562
Midwest178,428705,954884,382631,906
New England229,2491,283,1891,512,4381,256,739
New York State152,425366,230518,655271,104
Northwest53,257499,053552,310443,905
Rocky Mountain493,122433,261926,383433,261
Southeastern243,177514,935758,112495,659
Southwest128,997453,751582,748373,376
Western98,004183,943281,947170,524
Total2,176,2106,494,8378,671,0476,100,244

(13) The Types of Technical Assistance Included in the Adjustment Proposals of Firms Participating in the Program

Firms proposed various types of projects in Adjustment Proposals. Marketing/sales projects are geared toward increasing revenue, whereas production/manufacturing projects tend to be geared toward cutting costs. Support system projects can provide a competitive advantage by either cutting costs or creating new sales channels. Management and financial projects are designed to improve management's decision making ability and business control. More than half of all firms proposed to implement marketing/sales or production/manufacturing projects. Sample projects are listed below in Exhibit 26.

Exhibit 26: Characteristics of Technical Assistance in Adjustment Proposals: FY 2010

Project classificationSample types of projectsNumber of adjustment proposal projectsAdjustment proposal project costs
Financial• Accounting systems upgrade • Cost control tracking system • Automatic Data Processing development30$517,000
Management• Strategic business planning • Succession management • Management development791,987,100
Marketing/Sales• Sales process training • Market expansion and feasibility analysis • Web site design and upgrade22811,416,092
Production• Lean manufacturing and certification • New product development • Production and warehouse automation21511,918,300
Support Systems• Enterprise Resource Planning • MIS upgrades • Computer Aided Design software • Supply chain management software1626,984,400
Start Printed Page 4632

Exhibit 27: Adjustment Proposals by Project Classification: FY 2010

(14) The Number of Firms Leaving the Program Before Completing the Project or Projects in Their Adjustment Proposals and the Reason the Project Was Not Completed

In FY 2010, of the 102 firms that left the TAAF program, 57 completed the program and the remaining 45 firms left for the reasons listed below in Exhibit 28.

Exhibit 28: Summary of Firms Leaving the TAAF Program: FY 2010

Reason for leaving programNumber of firms
Completed Assistance57
Firm Filed Chapter 111
Firm Sold2
Inadequate Funds for Project Implementation4
Lost Interest in Program4
Out of Business11
Past 5-year Threshold23
Total102

Conclusion

TAAF effectively targeted small and medium sized firms FY 2010. The average sales, employment and productivity of firms certified into the program in FY 2010 was higher than that of firms certified in FY 2009. More than half of all firms proposed to implement a marketing/sales project or production/engineering project in their Adjustment Proposals.

Firms that completed the TAAF Program in FY 2008 report that at completion, average sales were $10.3 million, average employment was 73, and average productivity was $140,977 (sales per employee). One year after completing the program (FY 2009), firms report that average sales increased by one percent, average employment decreased by 10 percent, and average productivity increased by 11 percent. BLS reported that nationwide for the manufacturing industry in FY 2009, average employment decreased 12 percent and average productivity increased by 4 percent. Two years after completing the program (FY 2010), firms report that average sales decreased by 14 percent, average employment decreased by 16 percent, and average productivity increased by 3 percent. BLS reported that nationwide for the manufacturing industry in FY 2010, average employment decreased 12 percent and average productivity increased by 9 percent.

Overall, there has been an increase in the demand for the TAAF Program in FY 2010, as demonstrated by the increase in the number of petitions for certification and Adjustment Proposals submitted to EDA for approval. In FY 2010, EDA approved an additional 114 petitions, a 53 percent increase as compared to FY 2009; and approved an additional 93 Adjustment Proposals, a 54 percent increase as compared to FY 2009.

The addition of TAAF staff resources facilitated EDA's ability to improve processing time for petitions and Adjustment Proposals in FY 2010. Although there was a spike in petitions and Adjustment Proposals, EDA successfully met the 40-day processing deadline to make a final determination for petitions accepted for filing; and the 60-day processing deadline for approval of Adjustment Proposals as required in the TGAAA. In fact, the average processing time for petitions has started to decline below the 40-day requirement and the average processing time for Adjustment Proposals is below 30 days.

Start Signature

Dated: January 20, 2011.

Bryan Borlik,

Director, Trade Adjustment Assistance for Firms Program.

End Signature End Supplemental Information

Footnotes

1.  As of May 17, 2009, the deadline for making a final determination is 40 days. Before May 17, 2009, EDA had 60 days to make a determination.

Back to Citation

2.  Petitions are certified on a rolling basis throughout the year, therefore activity in these categories may not result in certification within the same FY. These totals represent the activity under each category within FY 2010.

Back to Citation

BILLING CODE 3510-24-P

[FR Doc. 2011-1583 Filed 1-25-11; 8:45 am]

BILLING CODE 3510-24-P