Valley Group Takes Economic Plea to Clinton
Deeply pessimistic about Southern California’s business climate, a delegation of Valley business leaders arrived in the nation’s capital Monday to urge the Clinton Administration and Congress to act to revive the region’s weak economy.
“I see a disaster out there,” said Walter J. Mosher Jr., president of Precision Dynamics Corp., which employs 300 people in Pacoima making disposable medical products. He said he was considering moving his $22-million-a-year firm to Nevada unless California reforms its troubled workers’ comp program and Congress passes national health care reform that lowers the disproportionate cost of doing business in the Golden State.
The Valley Industry and Commerce Assn.’s 41 members and spouses who traveled here are scheduled to meet with U. S. Trade Representative Mickey Kantor, officials at the Commerce, Health and Human Services and State Departments, California’s Democratic Sens. Dianne Feinstein and Barbara Boxer and Valley-area House members over a three-day period. VICA, which has 350 member firms that represent about 250,000 employees, has made annual pilgrimages to Washington each spring since 1989.
Mosher was among various outspoken participants in a session with editors and reporters in the Washington bureau of The Times on Monday where VICA members expressed gloomy outlooks on Southern California’s prospects. In addition to regulations, they attributed the prolonged downturn to post-Cold War defense cutbacks, the social service costs spawned by immigration, rising crime, the devastation of last year’s riots and a failure of political leadership.
Nicholas Carone, chairman of Mikron Products Inc., a Glendale firm that employs 150 making hydraulic equipment seals for elevators, tractors and submarines, said he is “85% there” on relocating his $5-million-a-year business to Reno, Nev.
He said he began weighing a move to a lower-tax state following discouraging visits to Sacramento and Washington about 1 1/2 years ago.
Carone said his decision has been driven by a huge increase in his workers’ comp costs and the “gridlock and the lack of understanding, lack of cooperation, and lack of interest that I found in Sacramento” during a VICA trip in late 1991.
“The only thing that would make me not move would be if I saw some light at the end of the tunnel--if I saw real workers’ comp reform,” Carone said. His workers’ comp costs have jumped 375% to $263,000 since 1989; his work force increased only 50% during the same period.
Both Mosher and Carone are native Californians who said they would leave the state with great reluctance. Precision Dynamics has been in the Valley 38 years since it was founded in Burbank. Mikron Products also began in Burbank 20 years ago before moving to Glendale in 1984.
David W. Fleming, chairman of the VICA’s governmental relations committee, said that four- to five-member firms are examining the possibility of relocating. He said the Valley has lost 50,000 to 100,000 jobs since the late 1980s as numerous companies went under, moved, down-sized or consolidated.
VICA leaders said they hope to convey a message of economic urgency to official Washington this week. Several said they’re encouraged by the importance that the Clinton Administration says it attaches to the state and by the access to officials they are being afforded.
“I would like to see attention focused on California’s economic problems, in particular Southern California,” said VICA Chairman Benjamin M. Reznik, a prominent Encino attorney. “They almost need a Southern California task force here that’s going to say: ‘What can we do to turn this area around?’ ”
H. W. (Hank) Edmiston, a vice president at Transamerica Insurance Group in Woodland Hills, suggested a more modest yardstick.
“The proof is whether these people show up for their meetings,” he said.
