Most of the precision-cut bits of metal and plastic made at Clean Cut Machining in Burbank end up inside of helicopters, jet fighters or other fighting machines built by big defense contractors such as Bethesda, Md.’s Lockheed Martin Corp.
But as the defense industry braces for slashing budget cuts from the Pentagon, shop manager Albert Fayroyan knows Clean Cut needs to look for other customers. So he’s looking to tap another potentially rich source of public funds: high-speed rail.
“War is beginning to end, which is a very good thing. But generally, in defense manufacturing, once a war is over you get a small spike and then it dies off,” said Fayroyan, whose company gets 80 percent of its revenue from defense contractors. “We have a lot of capacity to make parts for other industries.”
Last week, Fayroyan and other small California manufacturers met in Sacramento with Fairfield, Conn.’s General Electric Co., Montreal firm Bombardier Inc. and other companies that might build locomotives and cars for California’s high-speed rail system – if it gets built. The event, put on by the U.S. Department of Commerce and Transportation, aimed to introduce California manufacturers to the big rail car makers.
Terry Trumbull, vice president of El Monte manufacturer Electro-Mech Components, said L.A.-area manufacturers that serve the aerospace and defense industries should find plenty of business as states spend billions on rail projects.
His company, like Fayroyan’s, has done work outside of aerospace and defense but wants to do more. The company makes light-up, push-button switches found in aircraft cockpits.
“We like the idea of broadening our customer base and not being so focused on the military and aerospace,” Trumbull said. “We look at rail as having a lot of potential. We’re thinking there should be some crossover.”
That’s assuming, of course, that California and other states move forward with high-speed rail projects. Gov. Jerry Brown has stood by the Los Angeles-to-San Francisco project despite a price tag that has ballooned to nearly $100 billion.
But Fayroyan said he isn’t worried. Transportation Secretary Ray LaHood spoke at last week’s forum, and Fayroyan said he takes the secretary at his word.
“He said, ‘The money is there, we’re ready, join us.’ That gave us confidence,” he said. “I don’t think it’s going to go up in smoke.”
For Sale
Want to buy Ontario International Airport? If so, you’ll probably need somewhere north of $250 million.
That’s the size of a deal proposed by Ontario officials in December but pooh-poohed by officials at Los Angeles World Airports, the L.A. city agency that runs Ontario, as well as the Los Angeles International and Van Nuys airports.
The city of Ontario wants to wrest control of the struggling airport – passenger traffic has fallen by more than one-third over the past four years – contending LAWA has mismanaged it. But the agency isn’t budging, saying Ontario’s offer “doesn’t come close to the value of the airport today,” according to a LAWA statement.
So, how much is the airport worth?
Hard to say, according to airline industry consultant Jack Keady of Play del Rey firm Keady Transportation Consulting. He noted that unlike a commercial or industrial building, there’s no expected return on investment. By law, airports generate only enough revenue to support themselves, so neither city can make money on the deal.
“You can’t use it to subsidize your police or fire department,” Keady said. “Any profit you make stays on the airport.”
Without that measure, he said the airport is worth as much as someone will pay for it. Ontario’s offer breaks down to $50 million in cash, $75 million in assumed debt and $125 million in payments over an indeterminate number of years.
For that much, Keady said he’d sell, though he believes LAWA almost certainly won’t.
“It’s a pretty moribund airport. That seems like a real nice price to me,” he said. “But then there’s ego. LAWA considers this an affront. The implication is someone else can manage it better, and by Jove they’re not going to concede that point.”
Indeed, LAWA spokeswoman Mary Grady said that the city Board of Airport Commissioners has asked for a resolution stating the airport will not be transferred or sold for at least two years.
Still in Court
The Long Beach port recently submitted an environmental report to a federal judge who in July ordered the port to see if changes made to its landmark Clean Truck Program would lead to more pollution.
The port in 2009 rolled back truck program rules that called for port officials to monitor maintenance logs of trucks serving the harbor. That was part of a settlement the port reached with the trucking industry, which had sued over the program.
But the Natural Resources Defense Council has argued that the new clean trucks now at the ports will become gross polluters if not maintained properly.
The report submitted to the judge, prepared by a paid outside consultant, concluded that the change wouldn’t hurt air quality because the new trucks will shut down if not maintained properly – supporting the port’s previously stated position.
The judge is expected to review the report and decide whether any further action, including a full environmental impact report, is required. It’s unclear when a ruling will be issued.
Staff reporter James Rufus Koren can be reached at [email protected] or at (323) 549-5225, ext. 225.
