SpaceLabs Medical Relocating--With 350 Jobs : Health care: The maker of vital-sign monitors plans to move more staff to Seattle after major quake losses. Washington’s tax breaks are an added incentive.

Chalk up anotherwin for Seattle--and one more loss for L.A.

SpaceLabs Medical, which has manufactured medical instruments in the San Fernando Valley for more than 30 years, is moving most of its operations and about 350 jobs to Washington state.

Although headquartered in Redmond, Wash., SpaceLabs, a maker of vital-sign monitors used in hospitals, has for years employed about 500 people in its manufacturing, repair and assembly divisions in Chatsworth. But since suffering damage from last year’s Northridge earthquake, it has slowly shifted all but its final-assembly operations to a new building just east of Seattle. When the shift is completed by early next year, only about 150 workers will be left in Chatsworth, CEO Carl Lombardi said.

SpaceLabs has told most workers affected by the move that they can stay with the company if they are willing to relocate to Seattle. But although the Northwest may have captured the hearts of the company’s directors, not so its employees. Lombardi said only about one-quarter of the Chatsworth staff is expected to accept the transfer.

“I’m not going. I love L.A.,” said Kay Shamsa of Woodland Hills, who works as a technician for SpaceLabs. Shamsa, 40, who has worked for the company for five years, is from Iran. She wants to remain near other Iranian immigrants in the Valley, and will look for another job here instead of moving.

“I hear it always rains,” said Yupaporn Sukphranee, 42, an assembly worker at SpaceLabs who also doesn’t want to relocate. Sukphranee, whose heritage is Thai, worries she would not be accepted in Washington because the population there is overwhelmingly white.

“It’s hard to move,” said Patricia Donelly, 37, an 11-year assembly worker, who hasn’t decided whether to take a transfer.

Lombardi said the earthquake is one reason for the move. SpaceLabs sustained about $2.4 million worth of damage to inventory and equipment from the Northridge earthquake, and production in Chatsworth was halted for more than two weeks. It took months before things got back to normal, he said.

The loss made only a small dent in SpaceLabs’ profit of $18 million on sales of $247 million in 1994. But Lombardi said the experience taught him to spread operations across several locations--the company also has a plant in Oregon--so that no single emergency will prove disastrous.

Lombardi, who lives in the Seattle area, also recited the usual complaints about high California taxes and workers’ compensation costs. Operating a business in *Washington is simply cheaper, he said, adding: “It’s easier to grow an operation in this part of the country, and it’s easier to attract people here.”

Some analysts question why SpaceLabs Medical has remained in the Valley at all. The company got its start designing vital-sign monitors under contract with NASA, which needed them to keep tabs on astronauts in space. Back then, “Southern California was the only place to have the trained people and the equipment you need to do that kind of work,” said analyst Shawn Willard of the Portland, Ore.-based Charter Investment Group. That’s no longer true, he said. Portland and Seattle are also high-tech centers--and companies such as SpaceLabs know it.

Washington state tax laws add to Seattle’s allure. The state has no income tax. And thanks to a law passed last year, high-tech companies are allowed to defer payment of sales taxes on new manufacturing operations for several years. This year, Washington lawmakers are considering sweetening the pot by making the deferral a full-fledged tax exemption. Such policies are good news for SpaceLabs. “We find it helpful,” Lombardi said.

SpaceLabs’ new $13.2-million facility in the suburban town of Redmond will rub shoulders with the headquarters for Nintendo of America, Eddie Bauer and Microsoft Corp. The software giant is adding about 1 million square feet of buildings to its campus in the past year alone. While Los Angeles struggles to attract new businesses, Redmond--a town of 40,000--is almost overwhelmed by them. Assessed property values in Redmond have grown by $1.4 billion to a total of $3.8 billion in the last five years. City services can barely keep up, Mayor Rosemarie Ives said.

Meanwhile, at least one of the two buildings that make up SpaceLabs’ 110,000-square-foot Chatsworth operation is likely to be put up for lease, because the firm’s remaining assembly operations require less space, said Lombardi.

Industrial vacancy rates in the West Valley are now about 15%, according to Seth Dudley, senior vice president of Julien J. Studley Inc., a real estate firm with offices in West Los Angeles. Dudley added that the figure is deceptively low because earthquake damage has taken scores of vacant buildings off the market.

Despite SpaceLabs’ dominance in its corner of the medical equipment field, the company’s results have been affected by uncertainty over health-care reform.

That’s brought new price competition with big rivals such as the Hewlett-Packard Co. SpaceLabs’ earnings in the fourth quarter that ended Dec. 30 were up slightly to $5.5 million from $5.2 million a year earlier. But the company’s revenues remained virtually flat: $62.7 million compared to $61.4 million a year earlier.

In the future, SpaceLabs plans to compete in a growing market for computerized medical charts, as does Hewlett-Packard. Both companies say keeping prices low is a priority. Lombardi said he has seen some signs of improvement in the Los Angeles business climate lately, but not enough to make staying worthwhile. “We are just trying to do what makes sense for our business,” he said.