Aerotest Puts State to a Test of Its Own : Aviation: The company says government hasn’t been supportive enough of plan to expand in Mojave. Officials deny the allegation.
Is Aerotest Inc. about to join the list of companies that have been driven out of California because of an inhospitable business climate created by the state government?
To listen to Jonathan Bromberg, Aerotest’s vice president of administration, one would think so.
But state officials tell a different story. They say that Aerotest has ignored their efforts to help the company.
Bromberg is “giving the impression that he’s neglected,” said Jeanne Winnick, director of marketing at the state Trade and Commerce Agency, which is responsible for economic development and job creation. “I don’t think he’s given any acknowledgment that he’s received all this special treatment.”
Aerotest has corporate offices in Irvine but the bulk of its operations are at Mojave Airport, where it currently has 400 workers who maintain and repair commercial aircraft, from commuter planes to jumbo jets. The company says its annual revenues are about $50 million.
The company is the largest operation at Mojave Airport, a former Marine Corps air base that is now the world’s biggest parking lot for commercial aircraft that have been idled because of airline bankruptcies and consolidation.
Aerotest says it is planning a major expansion involving the refurbishing and upgrading of DC-9 jets for airlines and leasing companies that would boost its employment by 1,000 over the next 18 months.
There are no plans to move the existing operations, Bromberg says, but the company will decide in the next few months where to locate the expansion project.
Bromberg denied that Aerotest’s search for government support might be linked to any possible financial problems at the privately held company. Though Aerotest has laid off about 300 employees in Mojave over the past year, Bromberg maintained that the firm was profitable in 1992.
Certainly, there’s plenty of room for expansion at Mojave Airport, located in southeastern Kern County. But that’s not the problem, Bromberg says. His gripe is that he has contacted several state agencies and has written and called Gov. Pete Wilson to express his concerns about the high cost and frustrations of doing business here. But he says he has received no response.
Aerotest’s complaints about California echo those voiced by many other businesses: the workers’ compensation system is in need of reform; the tax laws are confusing and burdensome, and anti-pollution regulations are costly and often do little to help reduce smog.
“What we’re trying to tell the state of California is that other states are aggressively trying to create jobs,” Bromberg said. “Is California going to have an aerospace industry or not?”
So Bromberg says that Aerotest might just accept one of the offers being dangled by about 20 other states that have come courting for its business.
Bromberg says he has three boxes filled with information from other states hoping to lure the expansion project. The company has had serious talks with a half dozen of those states, he says, including Texas, New Mexico, Colorado and Missouri.
Among the incentives being offered are the building of new facilities at a cost of more than $10 million, rent abatement, tax abatement, operating grants and training funds, he said.
But California officials express frustration at Bromberg’s complaints.
In the late 1980s, Aerotest was the biggest beneficiary of $2 million in state funds for new plants and additional water capacity provided to Mojave Airport, said Dave Snyder, an economic development specialist at the Trade and Commerce Agency.
Snyder said he has also offered to pursue $8 million in state employee training funds for Aerotest, but Bromberg “was not interested in pursuing those funds.”
In February, Snyder said, he gathered representatives of the California Board of Equalization, Air Resources Board, Caltrans and other state agencies to discuss ways to help Aerotest. Many federal agencies were also represented at the meeting.
“We also offered to have state experts at his disposal to arrange financing for additional facilities he would require, and tooling and machinery,” Snyder said. “He’s neglected to take advantage of our service.”
Greg Whitney, president of the Kern Economic Development Corp., a public-private development firm, said that Aerotest wants major research and development support for its project that isn’t available through existing programs.
Whitney was also skeptical that other states could provide everything Aerotest wants. “There are a lot of states making contacts with companies and offering incentives,” he said. “In most of those cases, those might sound better on the front end than what somebody could actually do.”
Bromberg countered that the research and development funds are only part of what Aerotest is seeking.
In addition to the high cost of workers’ compensation, Bromberg objects to what he says are vague state tax laws concerning aircraft and aviation parts.
Another sore spot, he said, are air pollution standards that limit amounts of certain ingredients in aircraft coatings. The rule merely forces Aerotest to apply more coats to planes, he said.
Bromberg also doubted that the training funds Snyder offered to pursue would be made available to Aerotest.
As for the February meeting, he said, no agencies agreed to provide research and development money and no other issues were resolved.
“All I got out of that meeting was a list of other agencies I could call,” he said.
Other aircraft maintenance and modification businesses have had troubles lately, such as one started by Lockheed Corp. that recently projected large losses and imposed pay cuts on some of its employees. Lockheed blamed the problems on slumping air travel.
“This is a difficult industry at the present time,” Bromberg acknowledged, but added: “that is not the reason why these requests have been made.”
The Mojave location does have some appeal, Bromberg acknowledged, including the fact that many former aerospace workers live nearby.
The desert is also a good place to store jets because the dry heat inhibits corrosion.
But he noted, other states have deserts too. “And right now in the aerospace world, people will go where the jobs are.”