For more than 60 years, Sure-Grip International manufactured roller skates in Los Angeles County, at one time employing more than 200 on its assembly lines.

But no more. Buffeted by labor costs, stiff competition, environmental regulations and soaring workers’ compensation, Sure-Grip has sent almost all of its manufacturing to factories in Asia. Less than 30 employees remain at the company’s South Gate headquarters.

“None of our jobs that have been lost will ever come back,” said Sure-Grip President Jim Ball.

Sure-Grip’s familiar story illustrates the decline in manufacturing jobs in Los Angeles County. In the last 20 years, more than half of the manufacturing employment base has disappeared.

But what’s less familiar is that the county remains the largest manufacturing center, with 380,000 factory jobs. But it only holds on to the No. 1 slot because longtime No. 2, Chicago’s Cook County, has also seen half of its manufacturing jobs vanish over the last 20 years.

Both counties have been losing manufacturing jobs at a pace faster than the nation as a whole, where one-third of the manufacturing work force has disappeared over the last two decades.

Although there’s been some so-called reshoring, or bringing manufacturing jobs back to the states, that minitrend cannot counteract what’s happened over the long term or lately.

Indeed, the current recession has pushed the nation’s total manufacturing payrolls below 12 million for the first time in more than 50 years.

The losses in manufacturing have accelerated over the last two years as manufacturers have slashed production to keep pace with slackening consumer demand. Since the recession began in December 2007, the county’s manufacturers have trimmed 54,000 from their payrolls.

But not every major metropolitan county has been losing manufacturing jobs. Harris County, Texas, which includes Houston, has added 20,000 manufacturing jobs since 1990 and is closing in on Cook County’s No. 2 position. Local economists in Houston credit cheaper land, lower taxes and labor costs, and a refocusing of the oil industry toward international markets for the more robust manufacturing performance.

“Houston is much more cost-competitive than California or the Chicago area,” said Patrick Jankowski, vice president of research for the Greater Houston Partnership, a non-profit promoting the Houston area. Jankowski noted that industrial land costs are about 50 percent cheaper in the Houston area than in Los Angeles, while the 1 percent corporate tax rate in Texas is only a fraction of the lowest rate in California, which is 8.8 percent.

Degree of decline

In Los Angeles County, however, manufacturing employment has headed in only one direction since the mid-1980s: down. The only variable has been the degree of the decline: During recessions, there have been steep falls, followed by more moderate drops during economic boom periods. In all, more than 430,000 manufacturing jobs have been lost since January 1990, a drop of 53 percent.

In addition to labor costs, real estate values, utility rates and environmental regulations, local economist Daniel Flaming blames one overarching factor: a longstanding neglect of the manufacturing sector’s needs.

“This goes back a long way before the aerospace collapse of the 1990s,” said Flaming, president of the Economic Roundtable, an L.A. non-profit research group. “By the 1980s, we had already lost the shipbuilding, tire manufacturing, steel manufacturing and all but one of our auto assembly plants. That’s more than 100,000 manufacturing jobs in these industries alone – all gone.”

The last auto plant, General Motor’s Van Nuys factory, made its final car in the early 1990s.

The loss of so many manufacturing facilities didn’t get a lot of attention because many of the workers were absorbed by the flourishing aerospace sector. Someone laid off at a tire plant could, with little additional training, find work at an aerospace manufacturer or subcontractor flush with defense dollars.

As a result, civic and government leaders didn’t make a lot of effort to retain manufacturers. Instead, they passed stricter environmental and safety laws, which imposed heavy cost burdens on factories. Due to Proposition 13’s limits on property tax hikes, cities were happy to convert industrial land to auto malls and big box stores in order to gain sales tax revenue.

Only after the end of the Cold War and the resulting collapse of the aerospace industry did local officials realize how dire the state of the local manufacturing sector had become, Flaming said.

But by that time, many manufacturers had already given up on California and were expanding in other states, or outsourcing to Asia or Mexico. That’s precisely what happened at Sure-Grip. During the 1980s, the company began outsourcing its skate manufacturing to Asia. The outsourcing was gradual at first, but as the cost savings became more apparent, Sure-Grip soon had a network of contract factories in China, Taiwan and Thailand.

Outsourcing push

“We did this because our competitors were doing it and we had to remain cost-competitive,” Ball said.

The outsourcing push continued in the 1990s, he said, driven by stricter environmental and safety regulations. “Between what the air quality folks were doing and what Cal-OSHA was doing, it was very tough to keep manufacturing here.”

The final blow came in 2003 when Sure-Grip’s workers’ compensation premium skyrocketed. That prompted Ball and other top company executives to send almost all the remaining manufacturing jobs overseas.

“All the manufacturing we do here now is custom orders and a few just-in-time orders,” Ball said. “We’re mostly importers now.”

Sure-Grip is hardly alone in shipping manufacturing jobs out of the county. And there is no shortage of locations vying for those jobs, from neighboring counties to states like Nevada and Texas to other countries. Over the last 20 years, other states have blitzed local manufacturers with promises of lower costs, tax rebates and other incentives if they move.

But other companies, in contrast with Sure-Grip, have tried off-shoring but found that it was impractical.

One such company is Ortho Mattress Inc. of La Mirada. Ortho sent some of its manufacturing to Asia five years ago. But two years ago, the International Trade Commission slapped a tariff on the imports, making outsourcing more expensive. There were also concerns about the quality of the component products, currency fluctuations and shipping costs.

“We decided to bring back all the component part manufacturing here in-house,” said Ken Karmin, owner of Ortho.

The company opened a manufacturing facility in La Mirada last year and it’s now at full capacity. Karmin said he would not cite the exact number of jobs that had been brought back for competitive reasons. Ortho employs a total of almost 300.

Relocating jobs

One company that has shifted manufacturing jobs out of state is Hawthorne-based bio-plastics company Cereplast Inc. The company makes biodegradable resins from corn, wheat and potatoes; the resins are sold to companies that use them to make plastic products such as plates and cups.

Cereplast Chief Executive Frederic Scheer announced in January that the company is moving its manufacturing operations to a plant in Seymour, Ind., near Indianapolis. Fifteen of the company’s 25 employees will make the move to start up the new facility; as the company expands, manufacturing hires will be made in Indiana. About 10 sales and administrative personnel will remain in Los Angeles County, but in a smaller space in El Segundo.

Scheer cited high electricity costs as a major factor behind the move of the manufacturing operations.

“I will fight to stay here in Los Angeles as long as I can, but it’s just cheaper to be in another state,” Scheer told the Business Journal in January.

In some cases, manufacturing jobs moved from Los Angeles to neighboring counties. That’s what happened in the case of AEM Performance Electronics, a Hawthorne-based maker of high-performance automotive electronic parts. A year ago, the company sold its manufacturing operations to a competitor, who merged the operations into an existing plant in Riverside County, where industrial land is considerably cheaper. Most of the company’s 100 factory employees made the move; those that didn’t were replaced with hires in Riverside County.

AEM President Greg Neuwirth said the decision to sell was primarily a strategic one, as the company wanted to focus more on design of high-end electronic components.

Nonetheless, Neuwirth said that California and Los Angeles County were not ideal places for manufacturing operations.

“I felt like the last man standing,” he said. “On the one hand, this has been our home and we wanted to stay here. But it’s just so much more expensive here, with the rent, the taxes, the workers’ comp.”

Still staying

Not every manufacturer has given up on Los Angeles.

Egge Machine Co. Inc., a specialty automotive parts maker has toughed it out, maintaining a small work force in Santa Fe Springs. The company, which makes parts for the automotive restoration market, has been in the county since the 1920s.

Egge was hit hard by the recession in late 2008, but even as orders slowed, Chief Executive Ernie Silver said he never seriously contemplated moving his manufacturing operations.

“We’re a third-generation family here in Southern California,” Silver said. “Sure, we’ve gotten some brochures from other states. We look, we muse, we smile, but we are committed to remaining in California, where we’ve been for the last 85 years.

Egge has not moved jobs out of state, but it has not grown its work force substantially. Silver said the company has maintained about 15 employees, choosing instead to invest in machinery that increases productivity.

So even while keeping Egge in the county might be considered a victory for local economic development officials, it does nothing to reverse the slide in local manufacturing jobs. To do that, new industries – such as electric vehicles or solar power – must be created to take the place of older ones that have left the region. So far, progress in attracting these new industries has been painfully slow.

For example, plans by Los Angeles Mayor Antonio Villaraigosa to set up a green technology business park near downtown have barely gotten off the ground; those plans were dealt a blow when a deal to lure Italian rail car maker Ansaldo Breda S.p.A. fell apart last year.

There is talk that Chinese electric car maker BYD may open offices and a manufacturing facility in the county, but that’s preliminary and staffing up a plant remains years away. Tesla Motors Inc. is also looking at opening a plant in Downey for its electric cars, but nothing has been finalized.

“There are possibilities for green technology companies to set up shop here and a few have,” Flaming said. “But we haven’t acted as effectively as we might in targeting these cutting-edge areas.”