Southland’s Factory Workers Bear the Brunt of Profound Changes in the Economy

The “no openings” signs have been hanging out by the factory gates for so long they’ve nearly faded away. Manufacturers have been grumbling about losing business because of underpriced imports and the strong dollar. In steel, autos, shoes, textiles, glass and a dozen other industries, the employment outlook has been dimmed by a flurry of layoff notices.

But the gloomy landscape of declining companies, closed plants and out-of-work workers is only a partial view of the situation for manufacturers in Southern California. For one thing, aerospace and defense-related industries have been steadily adding jobs. And other companies are expanding, relocating here and creating or bringing with them hundreds of new jobs.

It’s part of the natural cycle of industrialization, economists say. As industries and their markets mature and labor-saving technologies enhance productivity, the number of jobs declines. The cycle throws the laid-off steelworker into upheaval and despair, and with the same sweep gives another worker a chance for security and good wages at a plant that uses imported steel to make pipes and tubing.

Southern California’s manufacturing base is slowly being remolded according to the same patterns evident throughout the United States.

Steelmaking, for instance, provided jobs for more than 18,000 Southern Californians in the 1970s. Now, however, the Southland’s two largest steelmakers--Fontana-based California Steel (formerly Kaiser) and Earle M. Jorgensen Co. in Lynwood--together employ fewer than 3,000.

But aerospace and defense-related industries have served to take up a substantial part of the slack in Southern California’s manufacturing employment. Other kinds of manufacturers have also expanded, although not with as much visibility as the heavily publicized defense firms.

In Riverside County, for instance, manufacturers of mobile homes and recreational vehicles have prospered and now are an important force in the county’s economy, says Brian Thiebaux, business development specialist at Riverside County’s Department of Development.

Virco Manufacturing, a Los Angeles furniture maker that last year ranked as the state’s 110th-largest company, says its Southern California divisions are doing well, employment remained high all summer and expansion above the 600-worker level is possible in coming months.

And in Orange County, the upswing in the building industries also helped create 400 more jobs this year in lumber and furniture manufacturing, according to Alta Yetter, a labor analyst for the state Employment Development Department in Santa Ana.

In June, Orange County employment reached an all-time high, with more than 1 million people holding jobs. However, in the year ended in July, Orange County lost 1,800 jobs related to durable-goods manufacturing (excluding aerospace and high technology), Yetter says. That was offset by 1,000 jobs at companies that make non-durable goods, such as apparel, food and pharmaceuticals, resulting in a net loss of 800 manufacturing jobs during the year. That, she says, was the “first time in two years that the (employment) figure had been below the year ago’s.”

Also in Orange County, an additional 3,600 jobs were cut from companies that make non-electrical machinery, including hard-hit computer equipment and oil tool makers. And in the manufacture of miscellaneous durable goods, which include such items as sporting goods and music products, there are 300 fewer jobs now than last year.

Many of the manufacturing jobs in central Los Angeles County are being lost, too, as the older industries face maturing markets and stiff foreign competition. At CHB Foods, which operates its own can-making plant with 73 employees, the future is “very uncertain,” the plant’s manager says.

Officials at Kerr Glass, a Los Angeles company that employs about 350 hourly workers at its Santa Ana plant, say it would be a good year if the company can “hold our own” as the glass industry’s woes force competitors into failure.

And the Los Angeles area’s shoemakers, swamped in a tide of foreign imports, are struggling to keep from cutting back their payrolls any further.

But as manufacturing jobs in Los Angeles and Orange counties have been dwindling, San Bernardino and Riverside counties have been adding them. Indeed, Riverside has seen “a lot of new manufacturing companies moving into the county in the past two to three years,” says Riverside County’s Thiebaux, “and we expect that trend to accelerate in the next five to 10 years.”

Many of Riverside County’s new employers are transplants from Los Angeles, Orange and San Diego counties. For example, Calavo, an association of California avocado growers, is moving from northern San Diego County to Rancho California in Riverside County to build a new packing warehouse and distribution plant that will employ about 60 workers.

Manufacturing now accounts for about 15% to 20% of Riverside County’s employment, Thiebaux says.

And in San Bernardino County during the past 10 months, 23 new companies have added 3,000 manufacturing jobs, according to Joe White, whose White & Associates consultant firm was hired by the county to help lure industrial firms.

The program has helped make San Bernardino--which at this point relies on manufacturing for just under 13% of its jobs--the leading county in the state for new manufacturing employment and second behind Santa Clara in combined new plant location and expansion of existing plants, White says.

And he says the county’s strong commitment to attracting industrial companies will bear fruit: He expects at least 3,000 additional manufacturing jobs to be added in the county in the next 12 months. “The program is just kicking into high gear now.”

In the San Diego area, much of the growth in manufacturing jobs is in electronics and other industries related to defense and aerospace manufacturing. But there, as in Orange and Los Angeles counties, companies seeking to expand have been nudged eastward by high land prices and other economic and environmental conditions in the region. As expansion and business location becomes more difficult in the more urbanized areas, the less populated counties benefit.

That, says Yetter in Orange County, is part of the natural cycle, too. Orange County, she says, used to be a bedroom community for Los Angeles companies. But when Los Angeles grew too crowded and expensive, firms looked for elbow room in the neighborhoods where their employees already lived. In 1950, manufacturing jobs accounted for just less than 15% of all employment in Orange County. By 1970, the population had begun to boom, but the growth of manufacturing jobs outpaced that, and almost 29% of all Orange County paychecks were drawn on manufacturers’ bank accounts. By 1984, that percentage fell to 24%, and this year, as of July, it stood at 23.3%, according to Yetter.

Now the lower cost of land and the available worker supply is drawing companies that want to expand into Riverside County, which in the past has been a bedroom community for Orange County companies. Riverside County, says Yetter “is repeating the same history as Orange County.”