ENERGY CRUNCH HITS FACTORIES COSTS PUT COUNTY TEXTILE INDUSTRY IN PERIL.

Byline: Jesse Hiestand Staff Writer

Sharp increases in natural gas and electricity prices are forcing textile and other manufacturers to idle plants, cut employees and shift work out of Los Angeles County while passing along the costs to consumers, economists say.

But the biggest cost may be the lasting effect this energy crisis has on the area's manufacturing base as some firms are in jeopardy of closing altogether.

``The cost of doing business has increased dramatically,'' said Leonard Horowitz, executive director of the Textile Association of Los Angeles, a trade group representing 800 dye, finishing and milling plants in 11 Western states. ``In some cases there are people who can only go so many months before they'd have to close their doors.''

Already one textile printing plant has closed in Los Angeles County, and several firms have seen their energy costs soar more than 400 percent, such as Lorber Industries in Gardena, where the monthly cost has gone from $250,000 to $1.2 million.

The California Fashion Association recently warned that natural gas prices were leading the many plants to consider shutting down from January to March.

The electricity crunch is only adding to the pain for plants in Los Angeles County that draw power from Southern California Edison instead of municipal power suppliers.

``If they're in Edison territory, this could be the coup de grace,'' said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

Edison is one of the power companies on the brink of bankruptcy because it cannot afford the skyrocketing costs of natural gas and electricity on the wholesale market.

On Friday, Edison said it will lay off 1,450 workers over several months to save $465 million, after cutting 400 jobs last month, also because of the power crisis.

Even firms in Los Angeles' city limits, which are buffeted from the rate hikes by the Los Angeles Department of Water and Power, are feeling the pinch.

``We take aluminum and melt it down and that takes a significant amount of energy,'' said Jeff Ornstein, vice president and chief financial officer of Superior Industries International Inc., a wheel maker in Van Nuys that employs 1,200 workers. ``We're going to have to take cost cutting measures to offset it - that's certainly planned.''

Ornstein said the plant cannot afford to shut down because its customers, including Ford Motor Co., General Motor Corp. and other major automakers, rely on the 3.5 million wheels it turns out every year.

While energy prices have been rising for about six months, the impact is only now having a serious impact on plant operations, especially in the textile industry, Kyser said.

``The stone hasn't hit the pond yet but I think people are getting ready to take action,'' Kyser said. ``There are a lot of small firms working on very small margins and if they shut down they may not be able to reopen in March.''

There are 695 textile mills in Los Angeles County and 4,000 apparel manufacturers, he said.

The industry already faced tremendous competition from overseas and some firms with plants in both Los Angeles and Mexico are shifting more work to Mexico to take advantage of lower labor and other costs, Horowitz said.

``It's hard to absorb this kind of increase,'' Horowitz said. ``For consumers their garments are going to cost more money and they won't pay that because it can be imported for cheaper.''