THE TIMES 100 : THE BEST PERFORMING COMPANIES IN CALIFORNIA : INDUSTRY REPORT : The Unaccounted For : Farms and Nonprofits Are Big Chunks of State’s Economy

The 921 firms surveyed for The Times 100 special section are surely a diverse lot. But by tracking only California-based, publicly held companies, the group doesn’t cover a huge chunk of enterprises that help make the state’s economy so robust and resilient.

Chief among the missing is virtually all of farming in what has been, for the past 40 years, the nation’s leading agricultural state. California’s 83,000 farms (about half of which are part-time farming operations) collected more than $16 billion last year from the sale of nearly 250 commercial crops. Moreover, agriculture contributes an estimated $64 billion in annual pay for jobs directly related to production and marketing.

Missing are such marketing giants as Sherman Oaks-based Sunkist Growers, a billion-dollar cooperative owned by more than 6,000 citrus farmers and packers, and Sacramento-based Blue Diamond Growers, with 4,000 employees and sales of $450 million in almonds and other nuts.

Also excluded are 1.9 million state and local government employees, including school teachers and staffs of special-service districts. These account for 13% of all the jobs in California, but that has shrunk from 21% of the state’s work force in 1976, before enactment of Proposition 13, limiting property taxes, and the subsequent Proposition 4, which limited government spending. Civilian federal employees raise the public-sector share to 16% of all California jobs.

Among the significant others who aren’t surveyed for this special section are scores of big, privately owned companies, thousands of much smaller firms and partnerships, plus an array of very large nonprofit organizations, including Kaiser Foundation, Blue Cross health plans (44,000 and 4,500 employees, respectively) and Automobile Club of Southern California (5,400 employees). Nonprofit research and development companies include El Segundo’s Aerospace Corp. with 4,200 California employees and Santa Monica’s RAND with 1,000.

The giant profit-seeking firms include Oakland-based Safeway, which went private in 1986 to avoid a hostile takeover. Though Safeway has since sold its Southern California supermarkets, the company still employs 24,000 in California; rival Lucky Stores with more than 32,000 employees in the state, is now a subsidiary of American Stores, Salt Lake City. Southern Pacific Transportation is now a subsidiary of Santa Fe-Southern Pacific but still provides more than 10,000 jobs in California.

Other major privately owned firms: Modesto’s E & J Gallo Winery, the world’s largest, with 2,000 employees and annual sales thought to exceed $1 billion. Certified Grocers, erroneously included as a publicly owned company in last year’s Times 100 listing of sales leaders, is a Los Angeles-based food wholesaler with nearly $2 billion in sales and 2,600 employees. San Francisco’s giant Bechtel Group and Pasadena’s employee-owned Parsons are construction outfits with projects girdling the globe. Denny’s, a restaurant chain headquartered in La Mirada, employs 12,500 within the state, and clothing manufacturer Levi Strauss of San Francisco employs 2,400.

Even that listing scarcely exhausts the ranks of significant others, said Pauline Sweezey, chief economist for the state Department of Finance. “There are a lot of companies that may not be headquartered in California but do a lot of business here.”

For example, St. Louis-based McDonnell Douglas has 121,421 employees, of which 50,000 turn out aircraft in the Long Beach area. Another St. Louis giant, Anheuser-Busch, employs 4,200 at its California breweries; the independent distributors and other private contractors who bring the beer to market account for about as many more jobs.

Then there are General Motors’ GM Hughes Electronics subsidiary in Los Angeles, which employs 62,000 Californians, and Ford Motor’s Ford Aerospace unit in Newport Beach, with 9,500 workers.

In telecommunications, GTE California in Thousand Oaks, whose 21,000 employees provide local telephone service along the Southern California Coast and in parts of the interior, is the largest of many local phone companies owned by GTE of Stamford, Conn. Contel-California in Victorville is the state’s third-largest local phone company but belongs to Atlanta-based Contel. And soon to disappear through pending foreign ownership is PhoneMate, the Torrance-based purveyor of telephone answering machines, which will soon become a subsidiary of Japan’s Asahi Corp., its longtime supplier.

Finally, there are lots of small firms that Sweezey credits with providing “a lot of growth” to the economy. These enterprises include start-up companies and garage workshops that may be tomorrow’s Hewlett-Packard, Apple Computer or, for that matter, PhoneMate. But mostly they provide the endless range of specialized services that consumers take for granted: real estate services, private contracting, auto repair and painting, cleaning, lodging and meals, professionals of all sorts, travel agents.

The state, Sweezey said, compiles no financial data on this volatile segment of the economy. But in 1986, the Employee Development Department surveyed nearly 608,000 California companies and found that 94% have 49 employees or fewer--and 57% employed no more than four.

And what of tourism?

While large concerns catering to tourists may be found under such Times 100 categories as entertainment-leisure, retail, wholesale and services, there are countless businesses of all sorts to be found in constant flux in such otherwise out-of-the-way but spectacular places as the Tahoe Basin or, for that matter, Palm Springs.

INDUSTRY BREAKDOWN

Companies by industry

Percent of companies by industry of 921 surveyed. Aerospace & Defense: 2% High Tech: 30% Energy: 3% Entertainment & Leisure: 8% Financial Services: 18% Retail: 4% Utilities: 1% Other: 34%

Revenue by sector

Percent of $387.3 billion in 1988 (vs. $352.7 illion in 1987) for all 921 companies.

Aerospace & Defense: 10% (11%) High Tech: 13% (11%) Energy: 19% (20%) Entertainment & Leisure: 4% (4%) Financial Services: 22% (22%) Retail: 5% (5%) Utilities: 8% (9%) Other: 19% (18%)

Figures in parentheses are for 1987

Profits by sector

Percent of $19.5 billion in 1988 (vs. $13.2 billion in 1987) for all 921 firms.

Aerospace & Defense: 10% (13%) High Tech: 14% (16%) Energy: 19% (20%) Entertainment & Leisure: 6% (6%) Financial Services: 25% (13%) Retail: 2% (1%) Utilities: 13% (12%) Other: 11% (9%)

Figures in parentheses are for 1987

Employees by sector

Percent of 2.49 million employees worldwide (vs. 2.46 million in 1987) for all 921 firms.

Aerospace & Defense: 15% (16%) High Tech: 17% (16%) Energy: 6% (6%) Entertainment & Leisure: 8% (8%) Financial Services: 13% (13%) Retail: 7% (7%) Utilities: 7% (6%) Other: 27% (29%)

Figures in parentheses are for 1987

PROFIT GROWTH

Profit growth by sector, in billions of dollars

1988 total: $19.53 1987 total: $13.24

REVENUE GROWTH

Revenue growth by sector, in billions of dollars

1988 total: $387.3 1987 total: $352.7