THE YEAR IN REVIEW: How Orange County businesses coped during trying times : Bucking Up Its Jobs Base : O.C. Attempts to Halt Exodus of Businesses

Fred Mickelson likes to say that Orange County should designate the ostrich as its official bird to call attention to head-in-the-sand attitudes about the need to entice companies here and keep them happy.

But thanks to efforts like his, the feathered icon probably should be replaced by a hawk, circling the desert ready to grab fleeing prey before it can escape.

For 1993 will be remembered as the year that Orange County woke up to its eroding business base and tried to do something about it.

Groups like the Consortium for Economic Development, headed by Mickelson, started swooping down on wavering companies before they could flee the state and persuading them to stay in Orange County.

Another organization, Partnership 2010, is plotting how the county can continue to serve as an incubator for emerging industry that will provide jobs and growth well into the next century.

Victories come both big and small.

One of the biggest “saves” of the year, for instance, was the decision by Loral Inc. to move its Aeronutronic Division from Newport Beach to Rancho Santa Margarita, keeping 1,500 high-paying jobs in the county. At the same time, Santa Ana officials hoot about having attracted GT Bicycles, a Huntington Beach bike manufacturer that threatened to move out of the county.

“We’ve really only begun to pay attention,” said Thomas Wilck, a public relations executive who is president of the Orange County Chamber of Commerce & Industry.

Better late than never. The county has already seen thousands of jobs disappear since the onset of the recession, a gusher that county business leaders are still trying to cap. The latest challenge is Taco Bell, the Pepsico unit that is one of nation’s fastest growing chains. The fast-food eatery is weighing whether to leave Irvine, or California altogether.

The outcome will test the county’s durability as a desirable workplace, for Taco Bell and its 1,000 jobs are being courted by economic development recruiters in Dallas, Atlanta and elsewhere. North Carolina Gov. James B. Hunt Jr. wants the chain so badly that he paid a call to corporate headquarters Nov. 4.

Mickelson, who is general manager for Southern California Edison’s Orange County region, led a delegation earlier this month to talk to Taco Bell executives about the company’s importance to the Orange County economy.

While he said he cannot divulge details of the county’s counter-offer, he said the changing attitude about aggressively marketing the region has helped.

“I don’t like to get in a bidding war,” he said. “I like to take each client and find out what their problems are and create solutions for them. What we don’t have in the way of incentives we try to make up in problem-solving.”

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A furniture maker that fears its ozone-creating varnishes will run afoul of the air pollution regulators? Mickelson points them to the water-based coatings that have been developed, or puts them in touch with the Air Quality Management District board member who also belongs to the consortium.

A company that complains energy costs are too high? Mickelson points them to Edison’s Customer Technical Application Center in San Dimas that is packed with the latest in energy-saving lighting and air-handling equipment.

Those are peculiar situations dealing with today’s problems. Partnership 2010 has enlisted top business leaders in Orange County to try to plot a longer-term strategy.

“We need to re-establish a belief in the California dream,” Timothy J. Cooley, the group’s president, said at a planning session earlier this month.

He encouraged about 100 of the county’s top business leaders to figure out how the county can foster new industries, such as telecommunications businesses that are emerging as the foundation for the much-touted “information superhighway.”

Orange County, he said, needs to regain its standing as a haven for entrepreneurs--the same kind who built the biotechnology and computer industries.

Partnership 2010 has created a government efficiency subcommittee to find ways to lower taxes and maximize benefits making the county more appealing to businesses.

Other changes are occurring that also should make Orange County more of a business haven.

Skilled labor is readily available because of layoffs at other companies. Housing prices, once a leading bugaboo against business relocations to Southern California, have steadily dropped.

Freeway and road improvements--bolstered by $314 million raised so far in a half-cent sales tax--are helping to ease the fears of a transportation crisis that have held down business expansions. Transportation has improved so much that only 11% of the respondents in the UCI Annual Survey listed traffic as the county’s top problem. That compares to 50% in the 1987 survey.

Other changes have improved the business climate as well.

The state reformed the worker compensation system. The county premiered a “one-stop shopping” center Dec. 13 where businesses can go to obtain state, county and local permits for whatever kind of project they might have in mind.

Still, some worry that these business-friendly efforts are only a starting point. The state and county need to worry less about “red teams” they throw together to stop businesses from leaving and more about the business climate.

That was the message presented earlier this month by Chapman University President James Doti as he presented the school’s annual economic forecast.

All the talk and good intentions in the world will have less effect in keeping businesses intact than lower taxes and better schools, he stressed. These factors are especially important to small businesses, which have been incubators of future growth and the biggest creators of new jobs.

“We’re not giving the small ones any attention,” Doti complained. “If we go overboard in granting favors to the big (employers), it’s at the expense of the small ones.”

Doti’s concerns are being heeded, though economic development leaders say a big part of the problem of keeping small firms is simply communication.

“The most difficult thing,” said Wilck, the chamber’s president, “is to know in advance whether they are leaving.”

To find out, Mickelson said he will launch a drive to raise $5 million as an endowment to bankroll an extensive economic development program aimed at both keeping businesses in Orange County and attracting new ones.

As the incoming president of the county chamber, Mickelson said he wants to identify wavering companies early to head off job flight and to help unify the county’s economic development efforts.

Anaheim, Orange and Santa Ana and regions such as South County each have economic development efforts, but they haven’t been working as closely together as they should, he said.

Santa Ana’s economic development manager, Patti Nunn, said her staff of three handles as many as 35 phone calls a day from businesses inquiring about the city’s free trade zone. And she always works closely on retaining businesses already in Santa Ana.

“Some still say they are moving, but with the improvement in business climate in the state, they want to stay,” she said.

The O.C. Jobs Picture Orange County continued to lose jobs in 1993. Although a slight gain is expected for 1994, the level will remain far below that of the 1980s. Orange County non-agricultural wage and salary employment:

1994**(estimate): 1,109 (in millions)

Employment by Industry Economists predict slow job growth, with some industries remaining below pre-recession levels past 1998.

1990 1993** 1998** Construction 57,150 42,902 52,500 Manufacturing 251,025 210,195 216,300 Trade (wholesale, retail) 299,000 275,454 294,400 Finance, insurance, real estate 96,025 93,043 99,400 Services 312,550 321,379 348,700 Government 126,100 127,044 137,100

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Sources: Employment Development Dept., Chapman University; Researched by JANICE L. JONES / Los Angeles Times