Lee Taddonio brings a mix of business and government expertise to his new role as president of SMC Business Councils, a lobbying group for small companies. A former engineer for Westinghouse Nuclear Energy Systems and a computer systems consultant, Mr. Taddonio also served for 10 years in the state House of Representatives. He chatted about the SMC's agenda last week during an interview at its headquarters in Churchill.

Q: How many members do you have? .....

A: A total of 2,500. We have all kinds of businesses. We define small business as 500 employees or fewer but our members typically have one to 150 employees.

Q: What kind of companies does SMC Business Councils represent?

A: We started as the Smaller Manufacturers Council in 1944. They were a group of manufacturers who decided there was strength in numbers. It was during World War II and they felt they were getting slighted on government contracts. They were successful and decided after the war that the association had some advantages. They began lobbying the state and federal governments to promote manufacturing.

In 1979, with the decline of manufacturing in Pittsburgh, things were not going well membership-wise, so they decided to open membership to all companies, not just manufacturers. It grew quite a bit, but we started to lose some emphasis on manufacturing. Some older members started to drift away; they felt they weren't being served. So one initiative I've started is to institute a manufacturers' council within the SMC dedicated just to manufacturing.

Q: How are small manufacturing industries holding up these days?

A: The mind-set in Western Pennsylvania has been that manufacturing is dead, that everything's gone offshore, the steel mills are closed and everything has gone down the pipe. We're finding that's not really true. Manufacturing is alive and well around here.

The manufacturing members we have are expressing their concern that they can't get qualified help. They have job openings and can't find enough people to fill them. There are a lot of reasons. A lot of kids are not going into manufacturing because they want to go to a four-year college. They don't look at manufacturing as a good profession. But it is. Another thing is, it's hard to get employees to pass drug tests. About half the people they want to hire don't pass the drug test. That's a frightening statistic.

Q: Can you provide an example of a firm looking for workers? .....

A: One of our members, Holtech Manufacturing, in Turtle Creek, wants to hire hundreds. (The New Jersey-based company, which operates a local plant in Keystone Commons, makes containers to store and ship nuclear fuel rods. It recently announced plans to double its work force to about 500 in the next two to three years.) They're bringing manufacturing lines from overseas back here because of the (lower) value of the dollar here. There are certain types of manufacturing that do well here.

Q: What is SMC doing to let people know there are jobs out there? .......... A: We're working through vocational-education schools, community colleges, and eventually want to get to the high schools to let them know how to train people. We're looking at sources of funding for job training.

Q: What kind of training do people need for these kinds of jobs?

A: It's all over the map. The most basic training they need is how to read a ruler and add and subtract. Unfortunately, some of the candidates coming out of school today can't do those basic things. There is also some sophisticated [training] because manufacturing is becoming more sophisticated. It's not the dirty job it used to be. A lot of things are automated. So people need a little bit more expertise for those jobs. But there are jobs in-between: traditional machinists, laborers and trades. They're still around.

Q: How are you addressing other issues of small business such as exorbitant health-care costs?

A: Health care is usually our top issue. One thing we do is provide group health insurance to our members. We're quite concerned about keeping it cost-effective. It's been a losing battle recently as prices keep going up. The way insurance companies rate businesses can vary their costs by as much 50 percent to 70 percent. All of a sudden you have an employee get sick and next year you have a 70 percent rate increase. That's pretty hard to take, especially if you're a small business. Insurers used to spread the risk. Now they look and see you have someone with a heart condition and they raise your rates. So we want a community rating to spread the risk over a pool of people, not just the healthy ones.

Q: What about business taxes, for which Pennsylvania continually gets a bad rap?

A: Gov. Rendell's 2008-09 budget proposal is like six steps backward for business. We were working ... to take the cap off the net operating loss. (That is the amount of net loss a company can carry forward from one year to the next; it is currently limited to $3 million annually.) To me it's a very minimal change. Businesses create jobs and create expansion. But the governor's proposal says we can't do that. Also, the capital stock and franchise tax phase-out. (Mr. Rendell proposed a drop from 2.89 mills to 2.49 mills when it was scheduled to fall to 1.89 mills.) He's backing off on that. So again business is starting in the hole. He wants economic development, but is not doing much in terms of giving businesses a break.

Q: What action will you take to change those tax proposals before the state Legislature votes on the budget?

A: We'll come up with a position paper and take it to Harrisburg on May 5 with a busload of business people to let the governor and legislators know how we feel and how these issues will benefit the economy. We don't always get everything we want. But they know we're here and we're not going away.

Q: You have a staff of 29 people in Pittsburgh and in Harrisburg. What's your management style?

A: Participative. I like to give people as much power and flexibility as they can take. I think the more you let people be involved in the process, the better your solutions are going to be, especially if they feel they have a stake in it.

LEE TADDONIO

• Job: President, SMC Business Councils

• Age: 67

• Hometown: Louisville, Ky.; resides in Murrysville

• Education: Bachelor of science, civil engineering, University of Notre Dame, 1962; master's of business administration, University of Pittsburgh, 1963.

• Career: 1965-69: manager, computer resources, Armed Forces Institute of Pathology, Washington, D.C.; 1969-73: systems engineer, Westinghouse Nuclear Energy Systems; 1973-82: member, Pennsylvania House of Representatives; 1983-88: adjunct professor, University of Pittsburgh School of Information Sciences; 1988-90: manager and consultant, Gateway Resources; 1990-95: manager of benefits, SMC Business Councils; 1995-2007: vice president, SMC Business Councils; Sept. 2007-Jan. 2008: acting president, SMC Business Council; Jan. 2008-present: president, SMC Business Councils.