Foreign Firms Joining Rebuild L.A. Effort : Commerce: The Japanese are leading the effort. But some are irritated about demands for their help because of recent ‘Buy American’ campaigns.
Some foreign-owned businesses here--responding to community pressure or acting on their own--are beginning to help with riot relief efforts or plan to assist the Rebuild L.A. task force headed by Peter V. Ueberroth.
State and local officials--seeing U.S.-based subsidiaries of Japanese companies in particular as having deep pockets--are already tapping these firms in the effort to rebuild riot-torn sections of Los Angeles. Collectively, these firms already have committed more than $400,000 for relief efforts and to rebuilding Los Angeles.
Officials also will attempt to rally support from British, Korean and other foreign-owned firms.
“The governor believes we need a broad-based effort if the rebuilding is to be successful,” said Thomas Sayles, state corporations commissioner and Gov. Pete Wilson’s liaison to Rebuild L.A. “We would hope that everyone contributes--U.S. firms and foreign-owned companies. We need job-creating investment in South-Central Los Angeles and other parts of the city.”
However, some Los Angeles-based Japanese executives are troubled by what they consider a double standard. They say they are made the scapegoat for U.S. economic woes, then are expected to take a leading role in stimulating local economic development.
On the other hand, critics of Japanese firms point out that the companies have made no major commitments to the revitalization effort--in the form of loans and investments that would create jobs. While it is still early to make such commitments, Japanese banks--like some of their U.S. counterparts--have been criticized for not devoting adequate resources to communities with large minority populations such as South-Central Los Angeles.
“This is a great opportunity for Japanese firms to prove they are good corporate citizens,” said John Cregan, president of a Washington-based lobby called the U.S. Business and Industrial Council. “Traditionally, most Japanese companies have avoided inner cities because of the lack of education and skills in those areas and established their manufacturing and assembly facilities in areas that are more rural. I think they will only make nominal investments (in Los Angeles) for public relations reasons.”
However, Bob Brasch, president of Pacific Partners, a Beverly Hills-based investment consultant that has helped Japanese companies form joint ventures with U.S. firms, says some Japanese firms will assume an important role in the revitalization effort.
“I expect a number of Japanese firms to work with the Ueberroth task force to assist the city,” he said.
The Japan Business Assn. of Southern California, a coalition of about 700 firms with 60,000 employees, is already engaged, said Akira Tsukada, the group’s president. Tsukada has told Wilson and Mayor Tom Bradley that his group will play a role in the revitalization effort.
However, he said he cannot predict how Japanese firms will respond to calls for job-creating investment in the city’s poorer areas. Investment decisions by Japanese firms will hinge on company needs but could be influenced if the U.S. government designates some areas as enterprise zones, a status that provides tax breaks, Tsukada said.
“We’re very concerned and want to help communities rebuild,” he said. “Japanese companies will decide what kind of long-term help they can provide when they receive specific requests from the Ueberroth task force and from American businesses.”
Privately, however, some Japanese business executives are frustrated because they have been targeted by supporters of “Buy American” campaigns, said Steve Clemons, director of the Japan America Society of Southern California.
For example, some were disturbed when a Los Angeles County agency on Jan. 22 revoked Sumitomo Corp. of America’s contract to build driverless rail cars for the Metro Green Line rail project, a decision made after the agency was criticized for not originally accepting a lower bid from a U.S. firm.
“It might be considered questionable to ask for support from Japanese business for rebuilding--and I think they should provide that support--when you look at Sumitomo being denied city business,” Clemons said. “There is a hypocrisy there that we have to address.”
While corporate Japan awaits a Rebuild L.A. master plan for revitalizing the city, some Japanese firms and associations have announced specific amounts for riot relief and redevelopment efforts.
For example, Bank of California, owned by Mitsubishi Bank Ltd., said it will donate $50,000 to Rebuild L.A. Sumitomo Bank of California said it is setting aside $100,000 for disaster relief and rebuilding.
Also, Mitsubishi Trust & Banking Corp. has donated $10,000 in cash and $1,000 in food to the Los Angeles Conservation Corps.
Sanwa Bank of California is pledging $100,000 to the Ueberroth task force, with an extra $10,000 designated for Compton. The bank also put into effect a special low-interest loan program it normally applies only to natural disasters.
Union Bank, controlled by Bank of Tokyo, plans to allocate $100,000 for emergency relief. Although it has provided no specifics, Union said it will also offer increased credit lines, below-market interest rates and extended repayment terms to people rebuilding or improving property in damaged areas.
Meanwhile, the Hitachi group of companies--there are 11 subsidiaries in the Southland--will make donations totaling $23,000 to relief groups helping the African-American, Korean-American and Latino communities, said Masayuki Kohama, Los Angeles-based senior representative for Hitachi Ltd.
In addition, nine Japanese trading companies--Mitsubishi International and Sumitomo Corp. of America among them--are donating $18,000 to the Salvation Army.
Collectively, Japanese companies are also providing support through the Japan Business Assn., which is donating $10,000 to the Red Cross.
Other locally based foreign business associations are also getting involved. The Santa Monica-based British American Chamber of Commerce plans to hold a fund-raising event involving its 320 member companies May 28, said Executive Director Dennis Storer. Storer has written Ueberroth and Mayor Bradley, offering the chamber’s assistance.
Times staff writer James Bates contributed to this story.
