Pacoima May Lose Fixture as Factory Shifts Jobs South
In midafternoon as the shifts change at the Price Pfister factory here, the foot traffic is swift, and Richard Espinoza is part of the exit throng.
Much of his family’s life has been invested in this faucet factory. His father put in 42 years at Price Pfister before retiring. Espinoza has been on the job 18 years, his wife 10 years. They met here at the factory and the couple now has two children.
When he hired on as a teenager, this was a “lifetime” job, Espinoza thought. Now he and his wife think in terms of weeks and months that they may stay on the company payroll.
Quietly, since early this year, Price Pfister, the nation’s third-biggest faucet company, has been laying off about 500 workers while it dramatically overhauls its manufacturing methods. The changes were made to meet California’s Proposition 65 restrictions by cutting the lead content in its products. Proposition 65 requires warnings on products that expose consumers to hazardous substances.
These regulations, the company claims, have forced it to shift more jobs to a lower-cost factory in Mexicali, just south of the border.
By year-end, Price Pfister’s antiquated foundry will be closed as the company starts up a more modern, machine-tooling operation. About 900 sales, administrative and manufacturing jobs will be left in Pacoima, but the real growth is in Mexicali, where Price Pfister opened a plant nine years ago, and which now has about 800 workers in assembly-line, polishing and inspection jobs.
“This all has to do with NAFTA. Proposition 65 is just an excuse” for Price Pfister to ship jobs south where they can pay lower wages, Espinoza says. A few days ago he heard a company foreman tell another worker: “If you have a chance to find a job somewhere else, try and take it. There’s no future here right now.”
Espinoza worries that Price Pfister’s Pacoima operation might shrink to a skeletal warehouse operation.
It may be even worse. All the remaining 900 jobs in Pacoima could go somewhere else, concedes Ron Cooper, Price Pfister’s new president, who was sent here two months ago by Black & Decker, the $5-billion power-tool conglomerate that is Price Pfister’s parent company.
When the foundry closes, Price Pfister will have twice the space it needs in Pacoima, Cooper says, so the company may shop for a better deal out of state, looking for lower taxes and utility bills and easier environmental regulations.
“The big question is what do we want to do in terms of location? Either [stay] in Los Angeles or California or outside” the state, he says. Cooper talks about Texas or Arizona as possible new homes and says the company may decide by late next year.
If Price Pfister does move, the 450 remaining manufacturing workers in Pacoima won’t move with it. The company will hire on a new crew.
For Jose Zamora, 29, an eight-year Price Pfister veteran who earns $9 an hour, his career there is just about done. “They call me in and say in two, three weeks, that’s it” and he’ll be laid off, Zamora says. He’s no fan of the Teamsters Union, either. “They don’t know nothing,” he says.
Price Pfister is sending jobs to Mexico “for the same reason every company is shutting down here and going to Mexico. They want to totally maximize their profits,” says Manny Barbosa, coordinator for Teamsters Local 986, which negotiated the latest union contract for Price Pfister’s hourly workers. It costs Price Pfister about $17 an hour in wages and benefits to staff its factory here, Barbosa says. “In Mexicali you can have 17 people work for the same pay.”
About 90% of Price Pfister’s union workers are Latino, many with limited English, and their chances of finding another job with comparable pay and benefits are slim, he concedes.
“They feel betrayed,” Barbosa says. “They blame the union, too. What can we do? I can’t go stand at the border when literally hundreds of companies are moving down there.”
Price Pfister is a textbook case of a manufacturing company that grew in lock-step with California’s economy. Now as the region’s economy evolves and relies more on entertainment, technology and imports, while corporations are in a global race to find lower-cost labor, the state’s high-paying manufacturing jobs keep withering away. And Price Pfister is shrinking with it.
The company was opened in 1910 by two men with the last names of Price and Pfister who made gas generators. In 1946, the company shifted into home faucets. That was timely because the housing stock swelled after World War II, and as California’s economy kicked into high gear, Price Pfister rode the state’s almost uninterrupted growth for decades.
Then in the 1980s, Price Pfister became a statistic in the junk bond, leveraged-buyout frenzy that marked the decade, as the company was sold four times.
In 1983, three company executives bought Price Pfister for $35 million. Five years later, they sold the company to Emhart Corp. for $215 million, with the trio of executives pocketing about $140 million. A year later, Black & Decker bought Emhart, and Price Pfister was part of the package. Last year Price Pfister’s sales were about $213 million.
The current turmoil stems from 1992 when the state sued more than 20 faucet companies for excessive lead as part of Proposition 65.
Lab tests showed that Price Pfister had the second-highest lead content, and the primary reason was its antiquated casting method.
Most of Price Pfister’s chief rivals, including the Peerless and Delta brands, long ago shifted to more automated machining methods to cut their faucets, rather than by pouring metal into sand cast molds, where lead is used as an alloy to seal the metal.
Early this year, Price Pfister settled with the state on the lead case and the company is racing to start up a newer machining system where it will make faucets in Pacoima, then shift product to Mexicali for final assembly.
Price Pfister says that it stayed with the older manufacturing method so long because it allowed the company to add design flourishes than many rivals could not match. But when “Proposition 65 required an across-the-board redesign of our product line,” Cooper says, the company had to find “the best quality for the lowest cost,” which means relying more on Mexican labor.
“When the regulatory climate catches up with them, rather than expending the capital necessary and cutting their own [profit] margins, instead greed drives these firms to Mexico,” counters Peter Olney, director of Manufacturing Action Project, a nonprofit labor activist group in Los Angeles. “They are using environmental issues as a scapegoat for their own failure to plan ahead.”
Other faucet companies have managed to cut the lead in their faucets without shifting a large number of jobs out of the U.S. For instance, Chicago Faucet Co., which had an even higher amount of lead in its product, still uses the old sand casting method. But the company has cut its lead content by switching to a different metal alloy, bismuth. It is more expensive than lead, but it allows the company to keep using the sand casting machinery and to keep open its factories in the Chicago and Milwaukee areas.
On Price Pfister’s factory floor, workers are thinking about their future somewhere else.
In June, Espinoza was demoted from his $17-an-hour maintenance mechanic post because jobs are being consolidated, he said, and now he feeds boxes on the production line for $12 an hour.
He figures his wife’s job may be gone by Christmas, and while he thinks his job may survive for a while, he’s already out looking for something new. Recently, he answered a help-wanted ad for a maintenance mechanic at an aerospace company that called for three to five years’ experience; Espinoza has 18 years. “When they asked me how much I made,” and he told them $17 an hour, “they said I had too much experience.” His union pay scale “scared them off.”
If Espinoza gets laid off, he may take advantage of a NAFTA provision where the federal government picks up the tab for his job retraining, so he may get a plumbing license to pad his resume.
But the real solution, he figures, won’t be in Los Angeles. His brother, who lives in Missouri, “can get me a job on an Army base there as a mechanic.” The pay may be only $12 an hour, “but the cost of living is a lot less there,” he says.
Another Price Pfister employee is Cresencia Ramirez, 43, with 20 years at the plant, who earns $10 an hour cleaning parts. He’s married and has four kids, so he plans to hold onto his job as long as he can because “other companies do not pay the same rates,” he says.
“When I started work here, I never thought about when the plant was going to close,” he says. Now Ramirez fears that “they are going to take all the jobs to the other side,” that is, to Mexico.
