In a move to stabilize an economy hard hit by defense downsizing, Commerce Department Secretary Ron Brown presented a $250,000 check to a small Van Nuys electronics manufacturing company Friday to help its transition from converting defense-related products to consumer goods.
Brown's visit to Industrial Electronic Engineers kicked off a weekend of meetings and presentations by Brown to promote the Commerce Department's defense conversion project.
The 2-year-old project is designed to encourage small- and medium-size companies--once dependent on supplying the military--to switch to producing items that can be sold locally and overseas.
Brown told a group of nearly 70 workers and executives that more public-private partnerships are necessary for such businesses to prosper.
"This is the type of partnership the Clinton Administration is trying to promote," Brown said. "We want to create an environment that will allow businesses like this to run smoothly and hopefully prosper again."
About 137,000 aerospace defense jobs have been lost in small businesses like IEE since 1988, said Robert Swayze of Los Angeles County's Community Development Commission.
The funding is part of a federal revolving loan program administered through the commission. More than $3 million has been doled out to qualifying companies in the county since the program began, Swayze said.
For many small businesses like IEE that were once reliant on the defense industry, the money has helped improve their status with banks that had denied them funding when they lost defense contracts, Swayze said.
The privately run Van Nuys company, which manufactures small module displays for electronic cash registers, video monitors, computer watches and keypads, is one of 19 such businesses in Los Angeles County to receive loans. Others are based in Chatsworth, South Gate, Pico Rivera and Gardena.
IEE prospered from the aerospace industry for decades after it opened in 1945. Until 1990, about 40% of the company's business was defense-based. That evaporated within 18 months to 6%, forcing a reduction of nearly half of its 400 employees and a 10% pay cut for those remaining from 1991 to 1994.
For the past three years, IEE has been redirecting its sales to the commercial industry, said President Patrick McEvoy.
"These loans are sort of after the fact for product diversification and survival for us, but they give us a little bit of a safety net to try new ideas," McEvoy said. "We're back to making a profit, but hopefully this can give us an even bigger boost."