Network Works Overtime to Save Jobs
It was a nine-month economic development version of the full-court press and it produced a slam dunk: CPC Baking recently reversed plans to close its Montebello plant, which turns out such famous brands as Entenmann’s baked goods and Orowheat bread for local consumption.
The score: 919 jobs saved.
“These are good jobs,” said Thad Mikols, vice president of the Montebello operation. “The people here were really excited when the decision came down.”
Chalk up another one for the Business Assistance Program, a generically named Los Angeles County effort to keep jobs in Southern California that has been operating quietly for more than a year.
Run by the Economic Development Corp. of Los Angeles County with funding primarily from the New Los Angeles Marketing Partnership, the program professes to have saved nearly 5,000 local jobs in the last 18 months by helping companies stay, locate or expand in Los Angeles County.
The program is working on an additional 143 cases representing nearly 24,000 jobs.
“We are not a one-stop shop, but we are the first stop” for companies looking for help with a business problem such as finding a new site or getting a building permit, said Marco L. Brown, executive director of the Business Assistance Program, which grew out of a smaller program of the Economic Development Corp., a nonprofit booster group for Southern California.
Like the healthy patient who takes vigor for granted, the Southern California economy for decades lived such a robust existence on a diet of aerospace and manufacturing that only anemic efforts were made to practice preventive medicine.
Nowadays we know better, thanks to the 1990s’ recession, economic restructuring and a stream of eager competitors from other states and cities that were only too happy to lure away companies that considered the region too expensive or too difficult in which to operate.
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There is no shortage today of agencies and people working on economic development.
The California Trade and Commerce Agency has its “red teams” operating throughout the state on a case-by-case basis when a company threatens to relocate out of state or has trouble meeting its business needs with the state.
In the city of Los Angeles, an office called L.A.’s Business Team serves a similar function, helping companies locate expansion sites, navigate the bureaucratic maze, secure a building permit or solve some other problem. Other cities in Los Angeles County have their economic development professionals and numerous agencies exist to assist businesses.
In fact, a whopping 462 agencies in the county claim to provide some form of business assistance, Brown said. Trouble is, so many of these obscure operations exist that frequently company executives are overwhelmed, not knowing where to go for what they need, she said.
That’s where the Business Assistance Program comes in. Part of the nine-employee program’s mission has been to bring together this array of organizations and services into a network, called the Regional Business Assistance Network.
One regional member of the network advertises an 800 number that gets about 250 calls a month from businesses with a variety of questions, Brown said. They might be start-ups looking for financing, a growing company looking for a new factory, a firm trying to reduce costs or a corporation interested in coming to Los Angeles, she said.
The regional group, the New Los Angeles Marketing Partnership, puts the businessperson in touch with the appropriate agencies or mobilizes the Business Assistance Program to trouble-shoot for the company.
In the case of CPC Baking, the parent company, CPC International of Englewood Cliffs, N.J., was seriously considering closing its aging Montebello factory and consolidating operations with a baking and distribution center in the San Joaquin Valley city of Tulare.
The reason: Labor costs are $7 or $8 per hour lower in Tulare than Montebello, Mikols said. CPC International began weighing all costs at the Montebello bakery against the expense of layoffs and relocation.
CPC warned Montebello city officials, who contacted the Business Assistance Program, which put together a local version of a red team from the public and private sectors.
“They are one of the top employers in the city,” said Linda Payan, Montebello director of economic development. “It was important for us to keep them.”
The team’s membership underscores the broad-based attack needed in this kind of effort. Team members included CPC Baking, which opened its entire operation for review; the Economic Development Corp.’s Business Assistance Program; Montebello’s economic development officials; the Bakery, Confectionery and Tobacco Workers Union Local 37, which represents about 550 CPC employees; the California Manufacturing Technology Center, which conducted a study of the efficiency of the bakery’s manufacturing process; Southern California Edison; the Gas Co; Pacific Bell; the California Trade and Commerce Agency; the Los Angeles County Sanitation District; the Regional Job Training Center at Compton; and the South Coast Air Quality Management District.
At one point, Brown and Lee Harrington, president of the Economic Development Corp. of Los Angeles County, visited top CPC executives in New Jersey.
The team worked for nine months and in the end demonstrated that CPC Baking could reduce its operating budget by nearly $3 million a year by making changes in the manufacturing process and by taking advantage of programs that are available to most manufacturing companies but seldom used, Brown said. Another company, KaiRak Inc., had outgrown its facility in Gardena--actually, two buildings a block away from each other--because of heavy demand for its new refrigeration system for food preparation tables and salad bars that keeps food at the colder temperatures recently mandated by the Food and Drug Administration.
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Kansas tried to lure the company away with a lucrative package of free land, money and other incentives, said KaiRak President Craig Kushen.
“Kansas offered us an incredible package” and other cities around California were also interested in KaiRak, which expects to double its work force of 70 in the next year, Kushen said.
In mid-March, KaiRak relocated to the Los Angeles harbor area with the help of the Business Assistance Program, L.A.’s Business Team and City Councilman Rudy Svorinich Jr.’s office.
“From a manufacturing standpoint, there still are a lot of things that make it difficult for manufacturers to do business in Los Angeles,” Kushen said. “But we are attracted to the labor force. . . . And how can you beat Southern California weather?”
