Ueberroth Begins New Challenge : Business: Former baseball commissioner’s bipartisan panel will seek ways to keep companies in state and attract more jobs. Better training and education is key, he says.
Watching First Travel Corp. pack up for the Midwest was difficult for Peter V. Ueberroth to bear.
He had grown increasingly concerned about the California economy, but this one hit a little too close to home, and it stung. This was the Van Nuys business Ueberroth had started from scratch in his mid-20s and built into the second-biggest travel agency in North America before selling it in 1980. And now it was leaving.
That departure was one of the main reasons Ueberroth knew he had to accept Gov. Pete Wilson’s offer to lead the new Council on California Competitiveness. The 17-member bipartisan team of business and labor leaders is charged with finding ways to attract business to California and keep companies from leaving.
In an interview, Ueberroth gives the impression that for him, the council’s mission is deeply personal.
“You build a company for 18, 20 years,” he said, almost wistfully. “You watch it flourish . . . ,” his voice trails off, his thoughts unexpressed.
By finding ways to help California attract more jobs, the council hopes to reverse the state’s growing image as a bad place to do business.
Entrepreneurs complain that California is hostile to business, that they are smothered by environmental regulations and hurt by delays in obtaining permits, expensive workers’ compensation requirements, high labor costs and other problems.
Although no data exists to measure the phenomenon, some companies are voting with their feet: They are relocating or expanding in other states.
Ueberroth, 54, is best known for organizing the successful 1984 Olympic Games and then serving as commissioner of baseball for five years, but he has spent most of his life in business.
For 18 years before the Olympics, Ueberroth ran First Travel. Since leaving baseball in 1989, he spends much of his time with the Contrarian Group, a Newport Beach management firm that tries to rescue companies in financial distress. Ueberroth also sits on the boards of five major corporations, and he raises walnuts, almonds and wine grapes in central California and oats in northern Idaho.
Ueberroth said he has struggled to retreat into privacy since stepping down as baseball commissioner, both to draw a ring of quiet around his family and to avoid publicity for the troubled companies he works with. He was reluctant to be interviewed about the competitiveness council.
But he keeps popping up in the news: here, joining partners in the leveraged buyout of Hawaiian Airlines in 1989; there, with an ill-fated takeover bid for sputtering Eastern Airlines. On the charity circuit, he is raising money for breast cancer research or baseball programs for inner-city youth. He is an oft-suggested candidate for the U. S. Senate, although he denies any intention of running for office.
The Orange County entrepreneur’s latest endeavor already has its share of skeptics. Some question whether the council can make a difference, while others worry that the group will try to roll back tough environmental protections to suit business. Still others say that what is really ailing California business is not heavy regulation or high taxes, but the recession, defense budget cuts and issues such as crime, traffic and smog.
In an interview with The Times, Ueberroth insisted that California is losing its competitive edge.
If business flees, Ueberroth said, state tax revenues drop, leaving California less able to finance good schools, police forces, health care and social services.
“If companies leave, we lose jobs,” he said. “More importantly, we lose quality jobs. That impacts the wage-earning family, and dramatically affects everyone else right on down. . . . The net effect is that it becomes a downhill snowball and gathers speed and becomes more difficult to handle.
“You lose competitiveness and you kind of start to rock from within.”
If Ueberroth has the answers, he is not telling. He declined to offer solutions, saying he does not want to usurp the council’s role, and that his personal views are irrelevant. But he suggests that the workers’ compensation system be revised to curtail fraud, and that the state improve training and education for future workers.
Some environmentalists fear that the council, with its membership weighted toward Republicans and business leaders, could sympathize too much with the business community’s longstanding complaints about pollution regulations.
“It’s nothing new to their agenda,” said Mike Paparian, state director of the Sierra Club California. “We’re concerned that unscrupulous members of the business community may use the economic downturn to undermine environmental laws.”
Ueberroth predicted that the council will “come out pro-environment.” He said he suspects that there are ways to “streamline” the process of complying with stringent environmental laws without lowering the standards. And he added that although California must attract business, it should not go out of its way to court new heavy-polluting industry.
“There are jobs California should not ever want to attract under any set of circumstances,” Ueberroth said. “We’ve got more than our share of pollution. We shouldn’t be out there making big efforts for major smokestack industry.”
A clean environment, he said, is important not only to Californians’ health but to the state’s desirability as a location for business.
By the end of April, the council is expected to give Wilson its recommendations in six areas perceived as troublesome to business: workers’ compensation, environmental and development regulations, the legal system, worker education and training, creating economic incentives, and government’s role in welcoming industry.
Assigned no staff, the 17 unpaid council members have enlisted the aid of about 100 volunteers, said Ueberroth, who is devoting about 30 hours a week to the effort. Working in six task forces, the council members have been analyzing research and talking with people in business, from corporate executives and trade organization representatives to laid-off employees.
Putting the group’s recommendations into practice, however, could require some Olympic-scale cooperation from myriad governmental agencies.
“How’s he going to get the whole state governmental mechanism and all the little local agencies turned around to be more user-friendly to business?” asked Jack Kyser, chief economist for the nonprofit Economic Development Corp. of Los Angeles County. “I think it’s going to be difficult.”
For Ueberroth, the departure of First Travel symbolizes one of California’s competitiveness problems. The firm, now called Carlson Travel Network, said that although it has found doing business in California expensive, the reason for the move was a consolidation by its Minneapolis-based parent company.
But Ueberroth is still amazed that no one--not the state and the city facing the loss of scores of jobs, or the telephone company about to lose a major customer--sought to persuade First Travel to stay.
“That is part of competing,” he said with obvious frustration. “As a state, we have to say to these businesses: ‘Hey, if you’re thinking of going, let’s sit down and analyze this. There are all these reasons to stay.’ ”
While tales of companies leaving are common, no one knows the dimensions or the cause of the problem.
The state Department of Finance recently found that California lost 660,000 jobs between June, 1990, and last December, the biggest drop in the post-World War II era. Ted Gibson, the department’s principal economist, said most are attributable to the recession and cuts in the defense budget, and only a “very small fraction” are because of firms leaving California.
Many economists agree that California is becoming a tougher place to do business, but they disagree over why. Some cite such factors as red tape, which the council is investigating. Others, like Gibson, contend that high housing and labor costs and heavy tax burdens are more to blame.
David G. Hensley, director of the UCLA Business Forecasting Project, said that in losing companies to other states, California is paying the price for poor planning. The state’s water shortages, traffic, crime and smog are high on the state’s list of drawbacks, Hensley said.
Ueberroth agreed that the profile of the problem is complex, and he emphasized that the council cannot by itself solve the state’s business problems. But he believes the group can serve as “an agent of change” by persuading a diverse population that the importance of attracting and keeping business is “something we can agree on.”
