ENERGY—Low Fuel for Power Fight

0



Coalition has few funds to battle bid for state companies

Prompted by a recent wave of announced and threatened plant closures and layoffs as a result of the state’s energy crisis, a statewide group of economic development officials has launched a counterattack against other states’ efforts to lure jobs and companies away from the L.A. area and California.

But the group so far has committed a paltry $150,000 on a six-month campaign to reverse the state’s souring business image, leaving it outgunned by the multimillion-dollar efforts of other states. That money has gone toward the hiring of a New York consulting firm, which has coordinated briefings for some national business publications.

“The intent of this campaign is on target, but it is woefully underfunded,” said Larry Kosmont, a Los Angeles economic development consultant. “In order to make sure that the state doesn’t suffer unfairly from the tarnished image from the power crisis, you need a major multimedia campaign, in the neighborhood of $3 million to $5 million.”

Economic development officials admit that their effort is falling short, but said they went ahead in May with their campaign rather than wait months or years for more money.

“We all recognize that $150,000 for a marketing campaign for California is not a lot of money, said Greg Whitney, vice president of business development for the Los Angeles Economic Development Corp. and one of the chief organizers of the campaign. “But we learned from the last recession that we had to get out there with something as soon as possible.”


Little help from state

The group, called the California Association of Local Economic Development, has sought additional aid from the Davis administration through the state Trade, Technology & Commerce Agency, but so far has gotten the cold shoulder.

Trade & Commerce Agency spokesman Norman Williams said the agency has earmarked $40,000 its annual contribution to the group of local economic development entities for marketing and retention efforts.

“We’re not seeing any evidence of a stampede of companies leaving California because of the energy situation,” Williams said, adding that if requested, Trade & Commerce Secretary Lon Hatamiya would try to appear at any trade shows or other gatherings targeted by the development officials.

The money being offered up pales against the media campaigns of states like Pennsylvania, which has spent $6.2 million over the last 13 months in a television and print media campaign to reverse its lingering image as a rust-belt state.

“One hundred fifty thousand dollars doesn’t get you very far, especially with media buy prices the way they are these days,” said Barbara Chaffee, deputy secretary of tourism and economic development marketing for the state of Pennsylvania.

And California’s image can use a turnaround. Just recently, out of state economic development officials rushed to capitalize on the rolling blackouts: Tennessee sent flashlights to an estimated 1,000 California manufacturing companies, while other states had gimmicks like glow-in-the-dark mousepads.


Energy casualties

Earlier this month, the California Manufacturers & Technology Association began compiling what it calls “Energy Casualty Reports,” in which dozens of companies mostly anonymously tell stories of actual and potential cuts and closures due to the energy crisis. So far, about two dozen companies are on the casualty list, reporting actual cutbacks or closures; another 30 are on a “watch list,” warning of potential cutbacks if their operating conditions don’t improve.

One company, a paper mill in Los Angeles County, said it planned to lay off 28 of its employees by the end of this month. “Our plant’s power bill increased 59 percent over the same period last year,” the unidentified company said in its letter to the CMTA.

Another L.A. area facility, Libbey Glass in the City of Industry, temporarily transferred much of its operations to other plants in the Eastern U.S. last winter as rolling blackouts swept through the area. It has since restored its L.A. area workforce.

No posts to display