Rebuilding L.A., One Neighborhood Business at a Time
Few people understand Southern California’s new economy of small companies, diverse neighborhoods and surprising skills as well as Linda Griego.
When she became president of RLA--formerly Rebuild LA--in 1994, efforts to get big companies to create jobs in poor, riot-torn neighborhoods had already proved a major disappointment. It was a somber time full of doubts about the local economy’s future and hand wringing about the fading of traditional business leadership that persists to this day.
Yet Griego saw a different reality and has acted from a more confident perspective on the economy and leadership in Los Angeles and Southern California.
To begin with, even as the region remained in recession, she noticed that population was growing in poor neighborhoods and that employment in the region had begun to rise again. Patterns were not what experts had predicted.
So with the cooperation of Southern California Edison and Dun & Bradstreet, RLA set about counting actual businesses. It found far more than anybody had reckoned: 15,000 companies employing 360,000 people in manufacturing alone.
Griego, then 46, a former U.S. Senate staffer, former Los Angeles deputy mayor and a small-business owner herself, learned that analyzing the economies of poor neighborhoods is like peeling an onion.
For instance, one reason major supermarket chains didn’t rebuild in central Los Angeles is that high land costs left their large stores unable to compete with smaller markets, which could target individual neighborhoods because their nonunion wages were $5 an hour less than those of the major chains.
Yet land costs remained high even in neighborhoods that were not rich, whether in Santa Ana, the San Fernando Valley or central Los Angeles, because housing was--and is--at a premium. “Apartments that used to rent for $300 a month now go for $500 because landlords can put two or three families into them,” Griego reports.
And all those families were flocking here, Griego and RLA discovered, “because this area is a magnet for jobs.” RLA found small companies making everything from computers to sausages accounting for almost $55 billion in annual sales--more than a fifth of Los Angeles County’s total output of goods and services.
*
They were mostly small, family-owned companies, employing fewer than 50 people each at wages varying greatly, from $16 per hour to $7 per hour on average.
Working hard to stay above water, these typical Southern California companies were seldom involved in the kind of regional business councils that influence local, state and national government.
So Griego introduced them to each other and organized them into networks, which helped them immediately with financing and business services. And she asked them what their needs and priorities were. Their answers may seem surprising: “Of more than 200 firms RLA surveyed, a majority gave as their first priority a trained, skilled work force,” Griego says.
How skilled do sausage makers have to be? As skilled as workers in any business these days.
Gina Harpur of Juanita’s Foods in Wilmington, a canner of menudo and other Latino foods, explains: “We face the same Department of Agriculture inspections and competitive pressures as large companies. Mexican food is not little old ladies cooking up a batch in the kitchen as it may have been 40 years ago.”
She has instructors from Los Angeles school district’s adult education division coming into Juanita’s plant now to teach basic English, math and computer skills to the company’s employees--most of whom are immigrants but also union members making $11 an hour plus benefits.
Harpur, who has an MBA from USC, will run Juanita’s when her father, George de la Torre, retires. She and the family want to expand the business from today’s $30 million in sales to $100 million and from 100 employees to 200.
And for that they need permits from Los Angeles City Hall to buy an adjacent lot and expand their canning plant.
So Harpur, at RLA’s suggestion, has joined with 15 other food processors in helping to organize the Food Industry Business Roundtable.
Kenny Yee, general manager of Wang Hing Noodle Co. in central Los Angeles, is also a founding member of FIBR. His company employs 27 workers and sells $4 million a year of noodles, won ton and fortune cookies to restaurants across the United States.
Yee wants Los Angeles to help modernize his company’s old building on Alameda Street so he can bring in new machinery and expand the business. Riverside County has offered him modern premises to relocate his company. But he wants to stay in Los Angeles.
That’s why he and Harpur and other FIBR members are calling on all 700 food processors in the region to join them in pressing questions of common interest, such as work force education and more enlightened regulation.
*
But whether the Roundtable in food processing and others in the biomedical, apparel and furniture industries get their way on any specific question, they will all succeed because their very organizing is teaching them leadership skills, Griego says.
“These owners and managers are the future business leaders of Southern California,” she says. “They come from family companies and reflect our community possibly better than the old leadership did.”
When RLA goes out of business as scheduled next year, it will hand over its databases on local companies and industries to the Community College District of Los Angeles. Computerized lists were not what was looked for when RLA was formed in troubled times four years ago. But maybe a legacy of information on family companies is just what the region needs now--and needed then.
