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MARCH 2006

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SOUTHERN CALIFORNIA SPOTLIGHT


Two Kinds of Flight

   The small-business angle is even working its way into work-force initiatives in one of the area's leading economic sectors, aerospace, which has remained a steady if not bright influence in the L.A. economy. Thankfully for the region, the Los Angeles Air Force Base and its Space and Missile Systems Center, which support some 50,000 jobs in the L.A. area, were left off the list in the 2005 round of BRAC closures.
   Now a $4-million grant administered by the Dept. of Defense's Defense Logistics Agency, through a contract with Concurrent Technologies Corp., is helping launch the California Enhanced Manufacturing Supply Chain (CEMSC) Program, designed to help small manufacturers get a toe in the door with Dept. of Defense procurements. The grant was awarded to California Manufacturing Technology Consulting (CMTC), which is working with the professional and technical assistance organizations in Los Angeles, Riverside and San Diego, as well as several universities on projects ranging from "translating" procurement data technical packages to developing prototypes. The new program is the first phase of a three-phase program.
   "California's small manufacturers get greater access to DoD. And, DoD gets greater access to the nation's largest manufacturing base," said David Braunstein, president and CEO of CMTC, whose resumé includes leadership positions with NASA and McDonnell Douglas.
   "There has been much hand wringing about L.A. County's weak nonfarm employment performance, essentially 15 years of no job growth," said LAEDC economist Jack Kyser in July 2005. "However, the civilian employment series [which includes the self-employed and unpaid family workers] indicates the county is at a new employment high. Clearly more people are working as independent contractors and in other ways that do not get captured in the nonfarm employment survey, and Los Angeles County is on the leading edge of this trend."
   That said, Kyser did not mince words later in the year after Nissan North America announced it was relocating its headquarters to Tennessee. In November, LAEDC sent to state leaders a list of 80 companies that have left or are leaving because of the state's onerous business climate, representing some 13,000 jobs.
   "The loss of 13,000 jobs at this level costs our public sector some $65 million annually, "said Kyser. "Every public sector employee should realize their employment and retirement benefits are at risk if private sector job and tax revenue creation goes elsewhere."
   LAEDC hopes to turn the state's goods movement action plan to its advantage through increased infrastructure projects and the jobs they bring. But the organization is also calling for a bipartisan blue ribbon task force at the state level to consider changes in tax and employment law to improve the business environment.
   "Many of our public sector leaders have the attitude that another business will simply take the place of one that leaves," said then-LAEDC president and CEO Lee Harrington, who has stepped down and been replaced by San Fernando Valley business leader William C. Allen. "What they fail to realize is the dislocation impact on the employees who may have to restart or change careers. There is also the likelihood that the new company is not as mature as the one that leaves and is less able to offer the kinds of benefits to their employees as the departing company, especially if it is a headquarters operation like Nissan."
   Assisting the area in its quest will be a newly formed Southern California Leadership Council, which counts among its members former governors Pete Wilson, Jerry Brown, George Deukmejian and Gray Davis. Teaming with them are co-chairs Ray Holdsworth, president of global engineering services firm AECOM, and Robert Wolf, chairman of regional industrial and office developer Germania Corp. Its first policy issue? The "Green Freight Initiative."
   "There are a million new good paying jobs related to the initiative," said Wolf.

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