Man Moves Only His Business to Arizona : Lifestyle: Santa Ana resident spends weekdays at Yuma auto parts plant he’s moved from Orange.

Raymond L. Jensen, president of Automotive Parts Exchange, loves one aspect of California’s climate and ran away from another.

To escape the business climate, he moved his firm and more than 500 jobs from Orange County just across the state line into Arizona.

But after work on most Fridays, Jensen cranks up the V-12 engine of his BMW sedan and commutes four hours to his Tustin Hills home in Santa Ana so he can indulge himself in Southern California.

“I’ve lived in Missouri, spent time in other states, and there is no state like California. It’s got the best food, the best cars, the best everything,” said Jensen, 60, who has almost finished relocating his company to this desert town of 53,000. “I really miss the lifestyle, yet I risked losing my livelihood.”

Jensen’s dilemma is typical of company owners who would rather stay in Southern California, but due to certain economic pressures feel compelled to move their companies out of state to remain competitive.

For years, Automotive Parts Exchange, which is family owned and operated, rebuilt starters, generators and alternators for foreign and domestic cars at its main plant in Orange. Today, only a vestige of that factory remains, and it is scheduled to be closed by the end of the month. Less than 100 workers are still employed there.

Since 1988, Jensen has been gradually moving his operation to Yuma, where he has a 10-acre site surrounded by citrus groves. Business has been good, he says, and now the company employs about 400 skilled and semi-skilled laborers at the Yuma plant. Sales run about $20 million a year.

“My company is just a small part of the situation,” said Jensen, an outgoing man who is particularly outspoken about the California economy. “Look at aerospace. What if McDonnell Douglas can’t make it? They employ 35,000 people in the Los Angeles area. . . . There is a tremendous snowball that is gathering speed.”

Four years ago, Jensen totaled up the cost of doing business in Orange County and assessed his company’s potential for the next 10 years. When he got to the bottom line, he said, he did not like what he saw.

Liability and auto insurance were getting more expensive. Commutes were longer and more costly for employees. Going up, too, were his premiums to provide workers’ compensation insurance.

Jensen felt that forthcoming environmental regulations, from air pollution standards to car-pooling, were going to cut his profit even more. An environmental consultant alone, he said, cost $50,000 to $60,000 a year.

To meet air pollution standards, the company tried a number of ecologically-correct paint finishes with apparently little success. Water-based paints caused Jensen’s rebuilt parts to rust. Other finishes required baking, which, he says, melted the wiring of completed alternators and generators.

According to the company, some paints took a long time to dry or did not dry at all, causing manufacturing delays and quality control problems.

All of this was extremely important from a cost standpoint. Auto parts remanufacturing is so competitive, Jensen said, that it is not uncommon to have profit margins as low as “a few pennies per unit” or occasionally no profit at all on certain types of products.

After looking at five states, Automotive Parts Exchange decided on Yuma, which offered lower costs and a location close to the company’s California markets as well as markets to the east. Desert sites in Southern California had been considered, Jensen says, until the South Coast Air Quality Management District expanded its borders to include them.

Now, there is no need for an environmental consultant. Yuma doesn’t have the air pollution problem California has, so Jensen has fewer air pollution regulations to worry about, such as car-pooling and the amount of paint he can spray.

Utilities are a little cheaper, but the corporate tax rate is about the same. Jensen said he has cut his rent by 60% and his wages for clerical help by 30%. He estimates that his premiums for workers’ compensation insurance have been reduced about $50,000 a month.

After arriving in Yuma, Jensen became active in civic affairs and now sits on an airport advisory board and the local economic development council, which is interested in attracting other California companies to the area.

But, he says, Yuma is not much to look at. There is a strip mall feel to the place. The area is known for having more hours of sunshine than any other place in the United States, yet the summers are oppressively hot with temperatures averaging above 100 degrees.

Yuma’s main attributes are the Colorado River, a Marine Corps air base, a territorial prison, a number of manufacturing plants, including Bose stereo speakers, and a host of citrus and vegetable growers.

The town’s latest addition is a big Wal-Mart franchise, one of those super-pharmacies that doubles as a department store. There aren’t that many places to get a great meal, Jensen says, except for the local country club.

“What you take for granted in California, you just can’t find here, like the diversity, the good restaurants, the beach, the climate,” Jensen said. “Yet I am very pessimistic about the state. I’d like to go back someday. But somebody strong needs to lead.”

Jensen says California needs moratoriums on some of the most burdensome regulations, financial incentives to get certain businesses to stay, workers’ compensation reform, and assistance for companies trying to comply with regulatory burdens.

He thinks the Council on California Competitiveness, headed by Peter V. Ueberroth, has the right idea, but its wide-sweeping proposals to revamp workers’ compensation and streamline the bureaucracy might be too late as far as he is concerned.

“If everything goes through the normal channels and it’s something the state Legislature doesn’t want to hear, it gets put on the back burner,” he said. “I can’t wait that long.”