Battered South Bay cities mobilize to counter cuts.

Transportation, environment, trade targeted to grow

South Bay cities, reeling from massive aerospace layoffs, are joining together in a number of ways to retain and attract more business.

A new group, spearheaded by Southern California Edison, called the South Bay Economic Council was officially launched in February with the distinct goal of attracting new industries to the area.

Council members have already met with economic development specialists from the Silicon Valley, Orange County and Long Beach to get ideas on how to market the region, said Barry Sedlik, manager of business retention for Edison.

"There is an excellent future ahead for the South Bay, but we need to take positive actions to secure that future," said Sedlik. "The entire region is being picked over by the nation."

The South Bay includes 18 cities that stretch from Long Beach on the south to Westchester on the north.

Sedlik said the South Bay Economic Council will be marketing the region for large industrial-type projects, not just offices and auto malls.

Some of the industries being explored to bolster the South Bay's sagging economy, he said, include electric transportation, pollution controls, recycling and international trade.

Sedlik said Edison has been working with the Stanford Research Institute in Menlo Park, Ca., to identify industries that will likely be global competitors in the future and regions that would be best suited for those industries. He pointed to Calstart, a nonprofit company in Burbank dedicated to exploring electric transportation, as an example of Edison's work with Stanford.

Calstart is a consortium formed by 40 public and private entities, including utilities and manufacturing companies, according to company literature.

"The problem with California is that there is a lot of cannibalism between the cities competing with each other for each project that comes down the pike," Sedlik said. "We want to develop niche markets."

He said Edison developed a "Team City" program to foster regional cooperation, which was "kicked into high gear" six months ago, and the South Bay is the "team's" first area of concentration. Since November, Team City members have held at least five meetings to discuss formation of the South Bay Economic Council, he said.

"We wanted to build on the momentum of cooperation from cities linked together to save the (U.S. Air Force) base in El Segundo," he said.

But the just-formed South Bay Economic Council is not the first group dedicated to regional economic growth.

For 16 years, a South Bay Association of Chambers of Commerce has existed, but it wasn't until the threat of losing the L.A. Air Force Space Division in El Segundo to New Mexico that the chambers' consortium had much teeth, said Kevin Peterson, president of the organization, which is now actively helping get the South Bay Economic Council off the ground.

Because the base is involved in advanced space and electronics research, it is not one of the bases targeted for defense cutbacks, said Peterson.

Air Force spokesman Major Bruce Lewis said losing the base would result in a $5.4 billion loss to the economy within a 100-mile radius of the base and a $9.4 billion loss to the California economy as a whole. He said the base currently has $40 billion in ongoing contracts.

A report on the effects of defense reductions on L.A. County by the Economic Roundtable, a nonprofit public policy research group, stated that if the base relocated, more than $1 billion a year in aerospace salaries would be lost. Moreover, the report noted that losing the base to New Mexico could result in a total of 420,000 aerospace jobs being lost in L.A. County between 1992 and 1995. Without the base closure, the Roundtable estimates aerospace job losses in L.A. County would be 210,000, based on forecasts in the federal budget a year ago.

In response to the dramatic estimated impact of losing the base, Peterson said the South Bay Association of Chambers sent members to lobby Congress and the Department of Defense to keep the base from being included on a list of recommended base closures across the United States.

Although it's doubtful the base would close, if it were to move to New Mexico it would be considered a base "closure" in California and, therefore, would be on the list of base closures.

That Department of Defense list is scheduled for public release March 15.

He said the South Bay Association of Chambers also wrote newly elected Congresswoman Jane Harman, D-Marina del Rey, who represents the South Bay, to take the lead in organizing the California state delegation on retaining the base.

Peterson said retaining the base is clearly the South Bay chambers' No. 1 goal. Building a regional approach to economic development, he said, is a close second.

The South Bay Economic Council is being started with corporate funding, with the hopes that South Bay city governments will want to get involved, Peterson said.

Because the council hasn't formed a budget yet and is still in the genesis stage, Peterson said he does not yet have a figure for how much funding the council will need.

While South Bay cities are teaming up to attract new industry to the region, they are also very active in retaining jobs. City officials from Redondo Beach, Torrance and El Segundo said they are routinely tipped off by commercial real estate brokers and utilities employees about South Bay companies that are considering leaving the area.

Companies are obligated to notify utility companies a year in advance of their departure.

Albert Ng, assistant city manager for the City of Torrance, said that city has been instrumental in preventing five companies from relocating within the past year. They are Hughes Electron Dynamics Division, which employs 1,200 people; Industrial Dynamics, which employs 350; Robinson Helicopter Co., which has 400 employees; Tylan General, which employs 80; and Reynolds Metals, which employs 350.

In many of these cases, Ng said, the companies were convinced to stay because they received lower electrical rates, were helped in the permit process and were given information on funding and job training.

In the case of Industrial Dynamics, which makes quality control equipment for soft drink bottlers, the company received $6 million worth of tax-exempt industrial development bonds from the state, which helped it buy a building adjacent to its property, said Ng.

To further keep jobs from fleeing the South Bay, the California Manufacturing Technology Center will be up and running by April at El Camino College in Gardena, promised John Chernesky, the center's executive director.

Chernesky said the center, one of seven in the country, is being financed through a $33 million grant from the federal and state governments.

"We're technology brokers," said Chernesky. "We want to save jobs that exist and create jobs from a company growing because it is more productive."

He said the money, which was granted for a six-year period, will fund the hiring of engineers and technologists who form assessment teams to help a manufacturing company be more productive and, thus, more competitive.

He said the center is dedicated to providing manufacturers access to the wealth of new technology "on the shelf."

He said companies will pay a "nominal fee" for the center's services, but he wouldn't get more specific.

He said the center is currently maintaining a low profile because it is still in the start-up stage.