ESCANABA - Two $300,000 loan requests from Engineered Machined Products (EMP) will go before the Escanaba Loan Administration Board next week. One of the $300,000 loans required a public hearing which took place at Thursday's Escanaba City Council meeting.
EMP will use the $600,000 in loans for working capital to catch up to the diversified market the manufacturing company is pursuing as it lessens its dependence on the declining diesel market, said Ralph Bedogne, EMP's vice president of governmental affairs.
The monies will help pay some creditors to get current with their accounts, he added, explaining the economy has not allowed EMP to stay at the level projected, mainly because their core businesses are not selling on-the-road diesel trucks.
Some of EMP's core businesses - Caterpillar, International, John Deere, Cummins and General Motors - are sending their business elsewhere, like China, or getting out of the diesel business, Bedogne said.
"We're working to rightsize and change our focus to not just depend on diesel," he told council.
The loans will help EMP catch up with the economy and allow the company to continue to pursue other business opportunities including its advanced product sales, Bedogne said.
Examples of advanced products being manufactured by EMP are fans, water pumps and fluid-moving devices, he said. The company also continues to expand its product lines in the power hydraulics field for off-highway equipment, he said.
While the demand for the products above is beneficial to EMP, business for highly technical parts - previously lost to overseas companies like those in China - is coming back to EMP because of the quality of its products, Bedogne added.
EMP officials are hopeful these new business opportunities will bring in orders during the first and second quarters of 2009, he forecasted.
"We really want to make this work," Bedogne said.
The company currently employs about 400 employees locally, a decline from a couple years ago, he said. The declining work force is a reflection of declining business. In 2005, the company had less than $350 million in sales compared to last year's more than $140 million in sales.
According to Bob Valentine, Escanaba's treasurer and member of the Loan Administration Board, EMP's loan request for $300,000 from the Community Development Block Grant required Thursday's public hearing. This loan and EMP's $300,000 loan request from the Economic Development Administration will both go before the Loan Administration Board Tuesday, Valentine said.
"Loan funds will be used to partially offset tooling costs and factory reconfiguration costs as EMP transitions from the over-the-road diesel business," Valentine stated in a memo forwarded to council.