Moving manufacturer fingers bad business climate; Haas Automation execs decry lack of official attention.

Disgruntled with time-consuming regulations, Chatsworth-based Haas Automation Inc., a $85-million-in-sales machine tool maker, announced last week it will leave the city and County of Los Angeles for more-hospitable business climes.

"Last year, we added 15,000 square feet to our factory. The permits, forms, the fees, the regulations, the paperwork and the consultants we needed to get it done convinced us that when we need more space, we will not stay here," said Dennis Dupuis, general manager at Haas Automation.

The company manufactures machines which shape metal for use in other manufacturing industries, including aerospace, auto and defense. About 25 percent of Haas Automation machines are exported.

A typical annoyance in Haas Automation's expansion last year: Because expansion boosted the building's value past $500,000, the firm became liable for $7,000 in fees to fund a city public arts program, said Dupuis. "It was easier and faster to build the addition than to do all the paperwork on it," he said.

The loss of Haas Automation would be another blow to the city's and county's struggling economy -- the company employs 200, has grown by 60 percent in the last two years and projects another 60 percent growth spurt in 1994.

But the city and county don't really seem to care, stated Dupuis. "We had one person come out here from the mayor's office, a young lady named Kelly Martin (assistant deputy mayor for economic development)," said Dupuis. "She was interesting to talk to, but basically she just said that the mayor has just gotten in and is fighting the same bureaucracy we are. There was nothing real she could do for us. She said the city doesn't have a whole lot of money."

Martin did not return a phone call from the Business Journal.

The city and county response has been a far cry from a large cardboard-box full of entreaties received from other regions and states.

States such as Kansas have shown more interest in his affairs than the L.A. mayor's office, said Dupuis, and have visited him more often.

"Why, Kansas offered us 40 acres for free, and help (including financing) in building a plant," he said.

In contrast, the city has no industrial development bond program to help, or sites to lease at good rates, said Dupuis.

Other states, such as Arkansas, offer to build a factory and lease it to a manufacturer at a lower mortgage payment than normal monthly rent. The county and city have virtually no incentives to keep or retain manufacturers.

Such incentives might work to keep Haas Automation, if they were offered, said Dupuis. The company now pays about $115,000 a month in rent. If the city could sell an industrial site to Haas Automation for around $60,000 a month, and then provide a "red-tape cutter" to scissor through the welter of regulations and forms, "then we would seriously consider staying," said Dupuis.

The state's workers' compensation system (for workers injured on the job) remains expensive, both financially and in executive time spent defending against frivolous claims, said Dupuis.

There are negatives to moving, he said. "The majority of our subcontractor base is here, and you have to get your suppliers trained in exactly how you want to have parts made, and other details. You don't want to go through that again," he said.

But even more so, "we don't want to deal with the City and County of Los Angeles again," said Dupuis.

The potential loss of employees, many of whom are skilled, was not a worry, said Dupuis. "Most have said they will follow us."