Iowa will be investing a total of $30 million in grant opportunities aimed at enabling small and medium-sized manufacturers to upgrade their technology and hire additional workers.

Using federal funds from the American Rescue Plan Act (ARPA), the grants will be focused on leveraging technology solutions to address vacancies and increase workforce capacity. Advanced manufacturing is Iowa’s largest industry, accounting for nearly 18% of the state’s annual economic output.

The funding is part of nearly $1 billion that Iowa received from the $1.9 trillion pandemic relief legislation signed into law in March by President Joe Biden.

In a statement Wednesday, Gov. Kim Reynolds said that Iowa’s ongoing workforce shortage is a critical situation that needs to be addressed immediately. “We are committed to providing the necessary support to our advanced manufacturing industry, and other impacted industries, to overcome this primary obstacle and turn this short-term trajectory into long-term, broad-based prosperity,” she said. Reynolds made the announcement in person at Iowa Spring Manufacturing in Adel.

The first grant opportunity, which was provided $5 million in funding, will supplement the existing Manufacturing 4.0 program for small manufacturers that employ up to 75 workers.

Through the Manufacturing 4.0 Technology Investment Program, small manufacturers can apply for a Manufacturing Innovation Equipment Grant of up to $50,000 to purchase new machinery, robotics or other equipment. A second category of grants under the program, Manufacturing Industrial Internet of Things Infrastructure Investment Grants, provides for up to $25,000 toward the purchase of specialized hardware or software in the Industry 4.0 technology groups.

A second grant opportunity, with $25 million available, will provide grants from $75,000 to $500,000 to midsized manufacturers on a competitive basis. According to a notice of funding opportunity posted by the Iowa Economic Development Authority, Iowa advanced manufacturers with at least 76 but fewer than 250 full-time employees can apply. To be eligible, companies must receive at least 51% of their revenues from the sale of manufactured goods, and have been in operation at least three years.

The grant applications for this latter program will be scored on a competitive basis, and will be awarded to applicants that “indicate the intent to purchase technology including software, hardware, equipment, training materials, licenses or any other necessary tool or equipment to implement innovative technology within a facility to address workforce burnout, improve retention and grow the workforce, and implement effective pivots in business processes in an effort to help recover from business hardships exacerbated by COVID-19.”

Training employees is not an applicable usage of the competitive grant funds, however. Companies will be required to provide a 25% cash match. Projects must be completed within three years of the date of the project contract.

“It’s really about reallocating some of the resources in your plant so you can go on to bigger and better things,” Iowa Workforce Development Director Beth Townsend told employers during a workforce roundtable held this morning at Des Moines Area Community College in Ankeny.

The roundtable was one of 25 regional roundtables that IWD is hosting in locations across the state this fall, with a goal of increasing awareness of the state’s more than 100 workforce development programs, as well as to hear directly from business leaders about the workforce challenges they face.

Under U.S. Treasury requirements for use of American Rescue Plan Act recovery funds, recipients of the new ARPA-funded grants will be required to track and submit performance metrics before and after the project. Before applying, an Industry 4.0 assessment conducted by the Center for Industrial Research and Service will be required and must be submitted with the application.

What business leaders are saying
Ankeny-based plastic injection molding company Accumold Inc., which currently employs 340 people, has 14 job openings currently. “That’s high, and the challenge is finding those people,” said Grace Swanson, vice president of human capital for the company. “We are also a nonsmoking company because our customers can’t have any contamination on the parts,” she said. “To find people in all shifts who don’t smoke is a real challenge.”

Swanson was among several Central Iowa employers who presented at a regional workforce roundtable hosted by Iowa Workforce Development today at DMACC. Accumold currently runs five overlapping work shifts that operate around the clock.

Although Accumold is now above the size to be considered for these new grants, they are programs that should appeal to technology-driven manufacturers. “We are very focused on technology,” Swanson said. “That gives us an edge. … Particularly because our products are so small, such as parts that go into pacemakers and hearing aids, so microscopes and robotics are critical to our daily work at Accumold.”

Swanson said she believes the grant programs will benefit the state. “Business is what runs the success of the state,” she said. “The stronger a business, the stronger our [community organizations]. “I just think it’s going to make the state stronger. It’s going to allow more people to be in the workforce or to go through our scholarship program for tool-and-die positions.”

Accumold has partnered with DMACC since 2006 to offer an Accumold Scholarship to DMACC students. It’s a program that has helped the manufacturer to find and train workers for its hard-to-fill late shifts; more than 70 scholarships — funded through state workforce training money — have been awarded in the past 15 years.

Mike Ralston, president of the Iowa Association of Business Industry, said of the new program: “This governor has been laser-focused on helping employers to [create] more strategic and value-added jobs. There is a ton of money out there for Iowa companies to access. The bottom line is that by making this change, it’s going to help workers to get better, higher-paying jobs.”

Asked whether some employers may be reluctant to apply for government grants, Ralston agreed that that may sometimes be true. However, “I think there’s increasing pressure to find new ways to find workers,” he said. “So there’s a lot of pressure to do new things.”