H. FRED MICKELSONChairman, Orange County Chamber of...
H. FRED MICKELSON
Chairman, Orange County Chamber of Commerce & Industry
As regional manager for Southern California Edison Co., H. Fred Mickelson is concerned about companies fleeing Orange County. If none replace those that leave, pressure builds to raise utility rates. As the chamber’s chairman-elect last year, he formed the Consortium for Business Development to try to halt the flight. He also heads a state “red team” trying to keep Taco Bell Corp., which is weighing a possible move to Texas. Mickelson gave Times staff writer James S. Granelli an overview last week of county efforts to save jobs.
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Question: How do you learn that companies are thinking of relocating?
Answer: What we’ve tried to get to is where companies that want to relocate call us first and give us a crack at solving their problems. The worst thing that can happen is that they’re three-quarters of the way down the path and then, somehow, we find out about it. They’ve done all sorts of work, and yet it may be that we can solve the problems for them. Also, we don’t want to get into an incentive bidding war. In California today, we won’t win.
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Q: Why is that?
A: Because other states, to attract business--because they have the space and the desire to build what California has become--are willing to put in loss leaders to try to attract business there. So if you get into some sort of bidding war like that, you’re only looking at a little piece of the equation. What I try to deal with immediately is: Why are you considering leaving? What problems do you face that I can help you solve? And then I try to bring to the table whatever and whomever is needed to make that happen.
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Q: How small a company will you go to?
A: Any size. At Edison, we’re particularly proud of what we can do on the air quality and water quality areas. The reason is because medium and small companies, like a little furniture shop or a printer, do not have the staffs to be able to deal with regulations they may face. They’re trying to keep their business going. They don’t have time to go to somebody to try to deal with the issues. So we developed what we call CTAC, Customer Technology Application Center, in Irwindale. We have the ability to take a customer’s product and find ways to do what they do--but do it, for instance, with a satisfactory coating. Instead of using a solvent-based coating, use a water-based coating. Or instead of using regular inks, use ultraviolet inks. And so we have a number of cases where we were able to take the customer’s product in there and, while the customer is still in business and worried about keeping going, we’re working on his or her product and figuring out a different way to make it to comply with regulations.
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Q: How many companies threatened to leave last year but decided to stay here after the consortium, the red team or the utility companies intervened?
A: We’ve had 19 saves where we were specifically responsible for keeping that customer. That equated to 4,126 jobs that were saved for the county.
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Q: What were the companies?
A: I have to pick and choose because companies are very concerned about confidentiality, even after they make the decision to stay. If there is a great to-do about “We may move, we may not move,” then productivity goes down and people are concerned. Many companies just don’t want any discussion during the negotiations. But the ones that are no longer confidential are Pilkington Aerospace in Garden Grove, with 470 employees; Loral Aeronutronic, now in Rancho Santa Margarita, which saved 1,400 jobs; All Metals Processing in Stanton, with 110 employees; Crispy Snacks in Huntington Beach, with 150 employees; and Martin Molded Rubber in La Habra, with 60 employees.
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Q: Chambers of commerce in the West have been criticized for failing to have any idea about economic development and for allowing California to be robbed, in essence, by states where chambers are more focused on economic development.
A: I agree almost categorically with that statement. I’ll speak to Orange County. Orange County, up to about a year and a half ago, didn’t have a clue. Times had been good for decades. Whenever someone left, there were two waiting to come in. So the chamber was not active in economic development. When we replaced the chamber’s president, we looked for a person who had economic development expertise. We found him in Oklahoma. It turned out he knew more about Orange County than we did because he had been here stealing our customers for Norman, Okla. He could name a handful from Orange County alone, and most of them we didn’t even know about.
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Q: Companies like Loral, which was facing an exorbitant rent hike, had to move. But Taco Bell and others don’t have that kind of pressure on them. Is it more difficult in those situations to get companies to stay?
A: Companies that simply hear the siren songs from other areas typically are not rapid decision makers, nor do they really know why they want to move. It often takes a substantially longer period of time to negotiate with them because they’re not driven by some need like Loral’s to leave. So quite truthfully, it’s much easier to deal with someone who’s either run out of space and has to do something to grow or has a defined reason they must go.
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Q: Are Orange County and Southern California in general better equipped to keep and attract small- and medium-size businesses than big corporations?
A: Anywhere you have a plethora of medium and small companies as we have in Orange County--90% of the businesses in Orange County are medium to small--it is easier to isolate the issues and the problems and to solve them. We don’t have a number of (large) corporate headquarters in Orange County. It’s wonderful as companies develop and become huge and international, but the backbone of business remains small and medium-size companies wherever you go, and that includes Orange County.
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On savings jobs in Orange County. . .
“Our efforts right now are not only in retention but in growth of existing businesses. When a firm decides to add people, we want them to add that operation here rather than elsewhere.”
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On the chamber’s future role in developing the county’s economy. . .
“There will come a day, perhaps even this year, when we will have a full-time economic development director and staff to find firms that we can bring here.”
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On the fight to keep national companies here. . .
“Southern California and Orange County are higher-priced to do business. So there has to be compelling reasons why you choose to stay here.”
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On the county’s economic base in the future. . .
“I think that our future here in Orange County will be based in some large measure on bio-med and bio-tech firms.”
