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Layoff Aversion Program Looks to Prop Up Businesses

Thousands of Valley businesses have been notified about a program funded by stimulus money that is designed to help keep them from laying off workers. Final success of the program is still unclear. The year-long program, launched by the city’s Workforce Investment Board and the Los Angeles County Economic Development Corporation, started in July in an effort to help stabilize at-risk businesses and help them get on growth paths. Two major partners for the program have been the Valley Economic Alliance and the Valley Economic Development Center, which have each received $100,000 in the American Recovery and Reinvestment Act funds for the program. So far, the Valley Economic Alliance has notified about 2,700 businesses about the program and has met with about 165 businesses for free individual consultations, which include needs assessments and personalized referrals to citywide programs. The organization’s goal is to perform 400 consultations by the end of the program, said Kenn Phillips, vice president of workforce initiative for the Valley Economic Alliance. Looking for financing “I would say nearly 50 percent of them are looking for some form of financing,” Phillips said of the consultations that have occurred. The VEDC has, in turn, been working to address that need. The center’s contract goal is to perform 600 financial assessments for businesses citywide, said Warren Cooley, the VEDC’s vice president of operations. The center has already performed 253 assessments so far, with 206 of those participating businesses having expressed an interest in securing loans. The center has funded 40 loans through the program. Cooley said that the program was originally slated to last 18 months but was reduced to a 12-month period. However, he assured that the center would still be able to meet its assessment goal. He added that the funding is aimed at both sustaining and stimulating businesses. “Businesses have got to have a good growth plan, and we’ll help them put that growth plan together,” he said. “We need to see that the money will be used to at least stabilize jobs and (then) create jobs.” Other issues Carrie Rogers, vice president of business assistance and development for the LAEDC, said other issues for businesses have included difficulties with workforce training, workforce selection and reduced sales. The LAEDC is utilizing community colleges to help provide training and with a company called California Manufacturing Technology Consulting to help manufacturers restructure their businesses in order to maximize efficiency. Jane Skeeter, owner of architectural glass manufacturer UltraGlas in Chatsworth, is one company that is already making major changes to her business as a result of the layoff aversion program. Through the program, Skeeter was able to secure a government grant through the VEDC that pays for several pieces of new equipment and consultation services. The equipment will allow her company to significantly increase its production output at its current location. She has also gained access to money vouchers that will be used toward the payrolls of new employees, as well as consultation from California Manufacturing Technology Consulting for implementing “Lean Manufacturing,” or more efficient manufacturing. “Everything counts because after having been through this two-year-plus recession … money is still very tight,” Skeeter said. “And although I can see things are really starting to turn around, cash flow is a real issue. … (The program is) helping sustain us for the down time because we’re so far in debt now from operating on bare bones that these offsets help us to sustain the business and also to grow.” Hiring Skeeter has already hired two new employees and plans to hire a total of 65 people in the next three years, which is part of her grant agreement. She currently only has about 20 employees and said she likely would have had to lay off employees if it were not for the program. Another manufacturing company, Mixed Chicks located in Canoga Park, is now in the process of receiving help from California Manufacturing Technology Consulting. Wendi Levy, co-owner of the hair product manufacturer, said she set up a consultation with the Valley Economic Alliance after the organization reached out to her. This month, consultants will visit her company to provide training on warehouse team strategies and better utilization of her QuickBooks accounting program. While Levy said her company has been doubling in sales each year, she sees the benefit of getting extra help. “If I could get my warehouse a little more efficiently run, I should be able to handle growth,” she said, adding that she should then be able to better strategize when it is necessary to hire new employees. “It’s a way for them to assist me, and I think it will be helpful.” Layoff Aversion Program Services Offered:Business needs AssessmentsFinancial Assessments (Possible financing)Resource Referrals (Consultations, Training) Valley Economic Alliance Program:2,700 business informed400 businesses to be assessed 165 businesses already assessed Valley Economic Development Center:600 business to receive financial assessment253 businesses already assessed207 expressed interest in loans40 loans funded Program Started: July 1, 2010Program Ends: June 30, 2011

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