There has been a seismic change in the business environment in California over the past several years. The Hoover Institution, based at Stanford University, came out with a study detailing the overwhelming exodus of businesses from our state. Notably, it found that 352 companies moved their headquarters out of California between 2018 and 2021. It also found that many more companies were either in the process or planning to move their facilities.
As a manufacturer, a member of California’s business community, and an employer, this trend is concerning. My company – A&M Engineering – was founded in this state and has grown substantially over the past 60 years. We specialize in manufacturing aircraft parts, airframe structures, and components for various aerospace customers. According to the National Association of Manufacturers, aerospace manufacturing is in the top 10 manufacturing sectors in California. It’s also in the top 10 major sectors for growth in the state. This gives us at A&M Engineering hope that we can successfully continue operations in California.
Still, the American Legislative Exchange Council ranked California’s business climate at the bottom of the list, with the state coming in at 48 out of 50. California leaders must do more to encourage economic growth or face the harsh reality that businesses like mine may have to leave the state in order to continue operations.
One way our congressional representatives can help is by supporting key programs that will keep work flowing into the state. For example, A&M Engineering is a top supplier for the P-8A Poseidon, a maritime patrol and surveillance aircraft used primarily by the U.S. Navy. We are one of 209 California-based supplier companies that manufacture components of this aircraft. Businesses like mine employ roughly 5,000 workers in our facilities throughout the state, and the P-8 program creates approximately $210 million in economic impact for California each year.
The Poseidon is a model acquisition program, meaning the aircraft is delivered on time and under budget. This type of efficiency is thanks to the hundreds of companies and thousands of workers in California and nationwide that take pride in their work and meet their customers’ high standards. This kind of work ethic and quality production should be recognized by our leaders at the state and federal level, particularly when those officials are making important decisions that affect California’s economy.
Congress is currently discussing funding priorities for the National Defense Authorization Act, the annual funding legislation that provides resources to support essential military programs and services. If California’s congressional representatives want to strengthen national security while also helping the state’s business climate and manufacturing sectors, it must support programs like the P-8A, which provide essential business to companies that have planted roots and grown here. Ignoring the tremendous economic impact that comes with advanced manufacturing for programs like this would be turning a blind eye to problems within California’s business community.
A&M Engineering was founded in Burbank in 1962 by my father, a former Olympian and Yugoslavian immigrant. He loved California for many reasons, but mainly because of the endless opportunity it presented to ambitious people like him. California can still be a place where dreams come true, and its citizens can thrive as long as our leaders make decisions that create an economically viable business climate. It’s not too late to reverse the steep decline of California businesses. With smart investments, California can once again be an elite state for business creation, growth, and success.
With smart investments, California can once again be an elite state for business creation, growth and success.
Boris Beljak is the president of A&M Engineering in Irwindale.
