State's Business Exodus Shows Signs of Easing : Economy: Manufacturers expo in Anaheim plays to a sparse crowd. And expansion --not relocation--is the buzz.


Despite Orange County's recent bankruptcy, out-of-state business recruiters at a relocation conference here Monday found their come-ons playing to a sparse crowd, suggesting the exodus of California companies may be slowing.

Representatives of 29 states handed out everything from chocolates to pork rinds with their promises of lower costs, but the recruiters found less interest this year in California business relocations and more in possible expansions.

"For Southern California, it's an excellent sign. It means people aren't out there looking (to leave)," said William Fallon, who owns a business-relocation business in Cypress.

The two-day Southern California Manufacturers Expansion and Relocation Expo, which has been in Anaheim for the past four years, had one of its lowest advance registrations ever, with only about 130 companies signing up, said Dennis Carruth, president of Trends 2000, the conference sponsor.

About 200 companies signed up in advance last year.

"It's down some," said Carruth, who estimated that 150 people attended Monday. "We're also hearing now that firms are more interested in expansion rather than relocation."

The shift in business attitudes is welcome news for members of the California Trade and Commerce Agency, which formed Team California, an alliance of economic development organizations dedicated to improving the state's business image, reforming regulations and establishing enterprise zones.

"We aren't going to stand by and let people come in here and steal our jobs," said Lt. Gov. Gray Davis, who roamed the hall talking one-on-one with local business leaders who are considering leaving Southern California.

While Orange County's decision to file bankruptcy Dec. 6 has resulted in the specter of possible tax hikes, increased business fees and school cutbacks, such fears weren't on the minds of most attending the expo. And Davis said he is hopeful that Orange County's problems can be worked out.

"There's no question it's a dark cloud on the horizon," he said. "But don't give up on Orange County. Give it a chance to work things out."

Recruiters at the conference said they were not using the bankruptcy as a selling tool because the impact is still unclear.

"It's just too early for most businesses to be feeling the impact," said Bob Cooper, president of the Spokane Area Economic Development Council.

But he said the bankruptcy has created an air of uncertainty for many companies. Cooper is scheduled to meet with about 20 Orange County businesses and is hiring a new Orange County-based recruiter to bring local companies to Washington.

"This whole Pandora's box is going to open up in Orange County and that's worrying the business climate," Cooper said. "Also, the future health of schools will be an issue. Most companies, when they come to Washington, they ask about the quality of the schools first."

Other recruiters said the bankruptcy is less of a concern than taxes, environmental regulations, development grants, labor costs and other issues.

"We haven't heard anyone even mention that bankruptcy," said Mike D'Antonio, a recruiter for New Mexico.

One representative from Virginia said he wasn't aware that Orange County was bankrupt until he got here. "I travel a lot and just missed it, I guess," he said.

But Jan Nagurski, vice president of finance for a Santa Ana company that makes parachutes, said his firm is considering taking its 250 workers to another state, where costs of business are cheaper. Owned by a British company, Irvin Industries Inc. is getting pressure from its headquarters to examine all options because of a desire to reduce costs.

Standing at the Orange County recruitment booth, near a basket filled with ripe oranges, Nagurski told Rick Zimmer, a Tustin city official, that the parent company is considering a relocation when the company's lease expires soon.

"We all know each other and work well together," said Zimmer, who with others at the booth said they had fielded hardly any questions about the Orange County bankruptcy. "We will sit down with you and Santa Ana and deal with the people from Great Britain."

Nagurski said he hoped so. "I would like to stay. Bankruptcy or no bankruptcy," he said.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World