[caption id="attachment_234983" align="aligncenter" width="1200"] High-Tech Machine President Neal Crosley, right, addresses the Council on Development Finance on Dec. 11 while Delaware Prosperity Partnership CEO Kurt Foreman takes notes. | DBT PHOTO BY JACOB OWENS[/caption]
WILMINGTON – A Wilmington-area machine shop was the state’s first recipient of a Facility Modernization Investment Support Initiative (MISI) grant on Monday.High-Tech Machine, a 32-year-old specialty machine shop in the Lewis Commercial Center between Newport and Wilmington, has learned that it will soon lose customers because it doesn’t have the latest technology.The precision computer numerical control (CNC) shop manufactures extremely precise components used in the testing of medical imaging equipment as well as the testing of missiles and rockets. It recently learned that a decade-long customer is canceling its $290,000 annual contract because High-Tech Machine does not have 5-axis CNC machines, which is the latest in machining technology, and another defense-related contractor informed the company that it will no longer be eligible for future contracts.“If we don’t get this equipment, we’re just going to continue to lose business, because we cannot compete with other companies out there. We’re already seeing it,” High-Tech Machine President Neal Crosley told the state’s job investment panel, Council on Development Finance, on Monday. “We know we need to do this to stay in business for another 30 years.”The company now plans to invest more than $1.09 million to install 5-axis CNC machines in the shop, which employs about 17 people earning between $50,000 and $100,000 annually. Crosley noted that the shop has chosen not to fill an open position due to the uncertainty around future revenues.Kurt Foreman, CEO of the Delaware Prosperity Partnership (DPP), the public-private organization that leads economic development efforts in the state, noted that demand for precision-cut parts is increasing though.“Demand for these products has been growing steadily largely due to the push to onshore and restore manufacturing,” he said. “Much of the demand comes from the aerospace and defense sector, medical imaging instrumentation and the oil and gas sectors. Those sectors require increasingly complex components, where even miniscule variations can have a significant consequence.”The CDF agreed to support High-Tech Machine’s investment with a $219,525 MISI grant. The company will have two years under the grant terms to complete the upgrade and draw the funding. It must keep the supported site operational for at least five years afterward or be forced to repay the grant.The money comes from a new $5 million grant fund carveout within the taxpayer-backed Strategic Fund that the CDF approved two months ago.The special fund is available for companies to upgrade existing manufacturing facilities within Delaware that might otherwise fall behind competitive sister facilities in other states or countries, putting them at risk of closure or job reductions. Unlike Strategic Fund grants that target production or job expansion – including recent recipients like Amazon, WuXi STA Pharmaceutical, DuPont, and Agile Cold Storage – the MISI grants would allow companies to acquire more modern technology to keep sites competitive without necessarily expanding either.“It’s another tool we can use in the Strategic Fund to offer help to existing employers, where additional job growth is not considered,” explained Regina Mitchell, director of the Delaware Division of Small Business (DSB) that oversees the Strategic Fund, in October.MISI was developed following conversations between the DSB, governor’s office and the DPP.The grant would fund up to 20% of a proposed project cost through reimbursable funds, capped at $1 million. Therefore, the pilot fund for the remainder of the fiscal year could leverage private investment of upward of $25 million, if not more, and at least five projects.
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