CLEVELAND — Concerns about the future of Ohio’s manufacturing industry are growing after an abrupt halt in millions of dollars in federal and state funding that support the Manufacturing Advocacy and Growth Network (MAGNET).
The pause in funding comes amid an ongoing audit of the U.S. Department of Commerce’s Manufacturing Extension Partnership program by the Department’s Office of Inspector General, but Magnet still hasn't been given a report.
For 40 years, the Manufacturing Advocacy and Growth Network — also known as MAGNET — has championed manufacturing, product development, staffing, and growth. Ohio ranks third in the nation for manufacturing.
“We help the small and medium manufacturers grow, get new technologies, figure out their next new products," said Ethan Karp CEO and President of Magnet.
But now, that work is in jeopardy. Karp tells News 5 that last Friday they were told $5.9 million in federal and state funding would be halted.
“It's incredibly detrimental to the work that we do, $5.9 million you do not replace with any other source immediately,” said Karp.
When he asked why, he was told it was because of an audit.
“The reasoning that we've been given, which is very little, is that there is an audit that will come out in some number of months, and that there are findings there that require suspension,” said Karp.
State officials also don’t have many answers. Rep. Jerry Cirino told us he hasn’t received any additional information about why the money was frozen.
“All we know at this point that I can share is that there is some investigation going on through the Commerce department in Washington by their Inspector General about some aspect of this program around the state," said Cirino.
While the explanation is unclear, the impact isn’t. MAGNET says the cuts could lead to layoffs and even facility closures.
“So within weeks, there will be 40 jobs at MAGNET, another 50 we estimate, across the state,” Karp continued. “MAGNET is one of six partners that is funded in this way through the state and through the fed our compatriots in other parts of the state are closing as early as this Friday.”
Companies that partner with MAGNET through their Manufacturing Extension Partnership say they’ll feel the impact, too.
“I’ll be quite honest, I was really ticked off,” said Jack Schron, president of Jergens Inc.
At Jergens, they build products for various industries. They test those products at MAGNET and get staff through the program, which will be challenging to do in the future without funding.
“We probably will have to ship it someplace else and get to slow the whole process down,” said Schron.
Alloy Precision Technologies will also be affected.
“Alloy makes custom-engineered products, which are called industrial bellows,” said Michael Canty, president and CEO of Alloy Precision Technologies.
They work with MAGNET to develop new concepts and manufacturing methods.
“We wouldn't do as much because we don't know yet who else in this area has the expertise, or do we have to go out of state, moving those jobs elsewhere,” said Canty.
Karp says they’ll keep working as long as they can — but this isn’t how oversight is supposed to work.
“Oversight is supposed to give you time to understand its findings, learn from them, rebut them, if you need to, and ultimately make changes, which we are happy to do. We can do none of that if there is no report and no information,” said Karp.
Cirino says he’s working with state leaders to see whether any relief is possible. But if the funding isn’t restored, MAGNET says the state could lose millions of dollars — and thousands of jobs.
