Plant Expansions Stay Strong but Rate Slows
Texas employment officials have been making inquiries at the Los Angeles Area Chamber of Commerce about California growth industries. It seems that they want the information to help counsel the unemployed--a sign, according to the chamber’s chief economist, Jack Kyser, that “people know economic conditions in Southern California are very good.”
While California is expected to lead the nation once again in business expansions in 1986, state Department of Commerce officials concede that 1985 is a hard act to follow. The number of jobs that will directly or indirectly be created by announced major expansions or new business locations in the first six months of this year is down 30% from the same period last year.
Department figures “will fluctuate from quarter to quarter,” said Commerce Department Director Christy Campbell Walters. But overall, “we have a very strong market, strong level of production and strong business climate.”
According to department statistics, during the first half of this year 212 companies across the state announced plans to expand plants or build new facilities. Of the total, 81 are in the nine-county Southern California region--Imperial, Kern, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara and Ventura.
That growth translates into an estimated 85,000 jobs, with manufacturing leading the pack.
Los Angeles County tops the first- and second-quarter lists of expansions in the Southland. The state’s most populous county usually leads the list in overall number of jobs created because of a strong manufacturing base and steady growth in service businesses.
Other counties in the region, however, are growing faster and creating more jobs in relation to their size than Los Angeles County.
Orange County, where the unemployment rate has tended to remain below that of neighboring counties, is experiencing mixed trends in job growth. Solid gains are reported in construction, retail trade and services, although growth has been sluggish in two other big sectors, government employment and computer manufacturing.
But continuing a trend of the last few years, businesses and developers have looked to the peripheral Southland areas to relocate or expand, drawing on lower real estate prices and a cheaper labor pool. That trend is making the so-called Inland Empire--Riverside and San Bernardino counties--one of the fastest-growing regions in the state in terms of business expansion and job creation.
“Companies are discovering the diversity in site availability in the inland and rural areas and the work force they need at reasonable costs,” said the Commerce Department’s Warren Rashleigh.
Here are some new developments on the Southern California job scene:
Progressive Wheels Inc., which recently moved its headquarters from Gardena, will be looking to the city of Riverside to fill some 250 new jobs. The plant, which manufactures steel and aluminum automobile wheels, will be hiring foundry workers, polishers and machinists through November, said Vice President Larry Kingsland.
“Attractive property values, plenty of room for expansion and a good local work force” all contributed to the decision to locate in Riverside County, he said.
Minneapolis-based Target Stores, a fast-growing discount chain, will create about 150 new jobs when it moves from a site in Rancho Cucamonga to a new $50-million distribution facility in Fontana.
The facility will be a central shipping plant for 52 Target stores in the West, according to company spokesman George Hite. The new Fontana site, which will employ nearly 600 people, including transfers from Rancho Cucamonga, was chosen for its access to transportation routes, Hite said. Still, “most of our employment growth will be at our stores,” he added.
In the Imperial Valley, the American Guild of Cabinet Makers plans to train 200 new employees for its new facility in El Centro. Workers will build, assemble and install high-tech cabinet modules. President David Clemens-Brown cited low utility and land costs, along with a 38% unemployment rate, as reasons for choosing El Centro.
Ralphs Grocery and Nissan Motors will build major warehousing and distribution centers in Los Angeles. Other firms making clothing and bath products will build or expand manufacturing facilities in the county.
In Orange County, new cosmetic, electronic and medical distribution centers are on the boards, bright spots in an otherwise lackluster landscape. “Manufacturing is on the skids,” Orange County labor market analyst Alta Yetter Gale said. County employment overall has grown at 1.4% over the last 12 months, “less than half of what had been forecast,” she said.
A planned expansion at TRW’s Rancho Carmel Industrial Park in San Diego County will mean 400 new jobs. But don’t rush to fill out the applications: Ground breaking at the facility--billed as a factory of the future--is not expected until the third quarter of 1987, and the first jobs won’t be filled until 1989.
Looking ahead, TRW’s entire Military Electronics & Avionics division, based at the Rancho Carmel site, is expected to grow from 900 employees to 2,500 by the mid-1990s, according to company spokesman Tim Dolan. Most of the jobs will be in the division’s management and engineering departments, requiring workers trained in computers and other technical areas, as well as clerical and administrative support personnel.
The Department of Commerce points out that its figures on job creation tend to be conservative. The companies cited in its employment surveys represent only major projects--those requiring a minimum investment of $500,000 and employing at least 50, officials say. Those criteria eliminate from the statistics most small businesses, which are significant generators of new jobs.
Noting that the bulk of new jobs will be created by small businesses--many of them in fields that never existed before--Christy Campbell Walters of the Commerce Department said, “California has experienced the greatest job growth in the entrepreneurial area over the last 10 years.”
