Using cedar from northern Minnesota, reclaimed barnwood from Kentucky and hickory from Mississippi, Lonesome Cottage became the largest rustic furniture manufacturer in the country.
Based in Pequot Lakes, the company has an outlet store and production facility in the central Minnesota city. Its workers make tables, chairs, desks and more that end up in homes and hospitality businesses all over the world.
The business strives for continuous improvement, said its president and owner, Brandon Andersen, and a program at risk of losing federal funding helps it work toward that goal.
Manufacturing Extension Partnership (MEP) funds, administered through the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST), subsidized consultancy costs used to help Lonesome Cottage at points throughout its history. Enterprise Minnesota, the MEP affiliate in the state, provided this below-market rate guidance to the company.
Like Lonesome Cottage, most of the manufacturers receiving MEP assistance are small to mid-size businesses looking to expand, shift gears or improve operations in some way.
“It’s huge at driving cost savings for our company and making us more efficient,” Andersen said of the program.
Funding for MEP sits on precarious federal ground, with 10 states learning theirs wouldn’t be renewed earlier this year. President Donald Trump’s administration temporarily reversed its decision within weeks, but a long-term solution for these states and Minnesota, up for renewal on Jan. 1, isn’t assured.
With Trump’s tariffs on steel, aluminum and other products garnering more headlines given their global implications for manufacturers, the status of MEP funding, which totals about $3.1 million a year in Minnesota, may seem like low stakes in comparison. Yet the program, proponents say, provides vital services like trainings and consultancy work that small manufacturers would otherwise have to forego. It also cuts against President Trump's image as a champion of American manufacturing.
In response to the uncertainty, Enterprise Minnesota CEO and President Bob Kill said his nonprofit is aggressively working with manufacturers to bring awareness to the need for continued MEP funding. “It’s ironic that right now we’re talking about the power of manufacturing at the national level and even at the state level, yet investment in the core of that industry, the small and mid-size manufacturers, is under pressure,” he said.
How important is manufacturing to Minnesota’s economy?
Cuts to MEP funding could negatively impact an industry that is the second largest employer of Minnesotans. Manufacturing companies employed nearly 322,000 workers in the state, about 11% of all jobs, as of April, according to the Minnesota Department of Employment and Economic Development (DEED). Many jobs in the field don’t require a four-year degree and offer wages above the state average. Only health care and social assistance accounts for more employment, with about 532,000 jobs, or 18% of the total.
Manufacturing looms larger as an employment engine in Greater Minnesota than it does in the Twin Cities metro. About 14% of jobs outside the metro, a total of around 146,000, are in manufacturing.
As many as one-fifth of workers in northwest Minnesota, defined as a six-county economic development region by DEED, work in the sector. At 51%, Roseau County, home to Polaris and Marvin Windows and Doors, has the highest percentage of workers in manufacturing in the state.
The next most manufacturing-heavy region in the state, at just under one-fifth of its workforce, is southwest Minnesota, where food manufacturing jobs dominate. South-central Minnesota and central Minnesota, with Mankato and St. Cloud as their hubs, are other areas notable for manufacturing.
The exceptions, meaning the economic development regions least reliant on manufacturing, are in northern and northeastern Minnesota. Known as the Headwaters and Arrowhead, these regions only have 7.2% and 6.6% of jobs coming from manufacturing.
As a rule, though, Minnesota doesn’t have a centralized manufacturing district tied to a dominant product. The state’s industry is diverse in terms of both geography and products, ranging from medical devices to electronics to fabricated metal.
People may think of name brands — 3M, Toro and Arctic Cat — when manufacturing comes to mind. But an ecosystem surrounds them, said Kevin McKinnon, deputy commissioner of economic development at DEED. “They all have supply chains, and a lot of our smaller companies fill those critical supply chains,” he said. “Many of them are in rural areas.”
Even smaller manufacturing ecosystems can have numerous related businesses coexisting within them. Trucks bring products to and from their facilities. Retailers fill their shelves with finished products. Repairers fix products if they break down.
Haves and have nots
Most of the 8,600 or so companies in Minnesota’s manufacturing sector employ fewer than 100 workers. Lonesome Cottage fits in here, employing about 90 workers under an umbrella including its Fireside Lodge Furniture wholesale company.
The bigger fish out there have more resources to shift and grow, Kill said, while smaller companies seek out Enterprise Minnesota’s assistance. “That happens to be the size of the organization that the Manufacturing Extension Partnership is chartered to focus on, small to mid-size manufacturers,” he said.
In practice, MEP funding often covers travel costs for Enterprise’s team to get to the farther reaching parts of the state. The longer the distance, the less likely it is that another consultancy firm will take on a job and the less likely a company can eat the cost to bring them on board in the first place.
Because of these realities, federal funding cuts would punish small manufacturers in Greater Minnesota more than they would Enterprise Minnesota, Kill said. And these companies are often the “life blood” of small communities, he added.
Andersen fears his company and others would miss out on valuable resources without MEP funds. The most profitable companies and the companies closest to the Twin Cities would be fine. The smaller companies would suffer.
“My fear is if they cut back on that MEP funding, Enterprise Minnesota will probably have to downsize and focus on the more profitable areas of the state that have a higher density of manufacturers and consultants,” he said. “They’ll probably lose outreach to the Pequot Lakes and the Grand Rapids and the Hibbings.”
Enterprise Minnesota most recently came to Lonesome Cottage in February to lead a training. Consultants had previously worked with the company about three years ago and 10 years ago. Andersen finds Enterprise Minnesota’s facilitated peer groups just as helpful, bringing him together with other manufacturing leaders to discuss shared challenges.
The nationwide MEP program allocation is $175 million. About $500,000 of Minnesota's $3.1 million in funding comes from the state. That aid is on top of several other state programs supporting manufacturers.
Considering the sheer number and diversity of manufacturers in the state, McKinnon said multiple levels of government programs are needed to support them. It takes a village, so to speak, and there wouldn’t be enough state and local resources to fully cover the village. “We can’t possibly serve everybody,” he said. “Cities and counties obviously don’t have the resources to be doing things specifically for certain important industries.”
Trump’s initial move to withdraw MEP funding from 10 states was, apparently, a reprioritization to favor investments in “artificial intelligence and quantum,” according to a report from WIRED in April. His administration reportedly determined that MEP didn’t align with its priorities.
Yet NIST still touts MEP success stories from around the country on its website. Minnesota was home to 22 of the client success stories between 2020 and 2024.
MEP funding uncertainty comes during an already unpredictable economic landscape for Minnesota manufactures. “Yo-yo” tariff policies, as Kill put it, are making forward planning terribly difficult.
Companies seem to be standing pat until they see how tariffs shake out, McKinnon said. The sooner it gets resolved, the sooner companies can get back to building on one of Minnesota’s strongest sectors.
Whether they’ll have what was up until now a reliable source of federal support is up for question. Andersen, who has recommended the MEP program to his manufacturing peers, hopes to see a positive resolution to the funding uncertainty soon.
When there’s such a focus on bringing manufacturing jobs back to the U.S. right now, he said, doing away with the program would only hurt the industry. “I just think it’s crazy to think that we would cut back on one of the key things that helps support growth of manufacturing in our communities,” he said. “It doesn’t seem like a good savings on an investment right now to cut funding for MEP.”
This article first appeared on MinnPost and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
