10 Questions…on Manufacturing’s Key Role in L.A. with Jack Kyser
It may not
be glitz and glamour, but Jack Kyser, the chief economist for the Los
Angeles Economic Development Corporation, says that manufacturing plays
a crucial role in the South Bay’s economy that few recognize.
How big is manufacturing in Los Angeles?
Despite some pretty significant job losses, Los Angeles County is the
nation’s largest metro area for employment in manufacturing. If you look
at the six Southern California counties from here to San Diego County
combined, you have more than 930,000 people working in manufacturing –
that makes it the largest manufacturing center in the entire country.
People have no clue that it’s that big – they think manufacturing and
think that it’s all in small towns in Middle America.
Why do you
think it is so overlooked?
Most of these companies are small to medium-sized with 20 to 250
employees, so we’ve found that a lot of them don’t do a good job of
getting out into the community to make people aware that they are there.
But probably the biggest reason is that it’s not sexy like the
entertainment industry. As a society, we tend to focus on things that
are more exciting, but something mundane like manufacturing is crucial
to this area.
Why is it so
crucial?
When you’re talking about almost a million jobs, that’s a major chunk of
your work force and these are generally well paying jobs. If you took
away manufacturing and its jobs and then asked what these people would
be doing and where would they find their income, such a loss would have
major implications for our entire economy.
I hear
manufacturing and think low-paying labor jobs. Are there any
opportunities for college grads?
While manufacturing certainly offers a lot of opportunities for those
with a high school education to make a decent middle-class living, there
are lots of opportunities for college graduates as well. You have
production planning, sales, marketing, logistics, finance, and for the
largest middle-market firms, there’s a lot of government regulations
with which to deal. Also, public relations work to get out in the
community so that the company’s story is told.
What kind of
manufacturing are we talking about here in this area?
The top four industries by employment in this area are international
trade, tourism, motion picture and television, and aerospace technology
in that order. Manufacturing is involved in each of those. Basically,
the only thing we don’t do here is cars and steel work. But we’ve got
the high-tech aerospace firms in El Segundo and Redondo Beach areas,
computer and electronic products, transportation equipment, fabricated
metal products. The absolute largest in L.A. County, though, is apparel,
despite some significant job losses.
Why have so many
apparel jobs been lost?
Low cost competition overseas from China and other Asian nations, and
Mexico and Central America as well.
There’s so much on the news today about jobs moving offshore. Won’t this
continue and diminish our manufacturing industry here?
We certainly have a lot of competition from overseas, but you have to
understand we can do a lot of things extremely well here that others
can’t, and the cost of production is not the major issue.
Cost of production
is not the major issue?
No, there are a number of other factors that always have to be balanced
out by companies – what you’re producing, port congestion, lag time in
shipments. All of that can lead to additional costs that offset cheaper
production abroad. Plus, like I said, we can do things here that can’t
be done abroad. Say, for example, a retailer is selling a certain type
of apparel really quickly. They need to restock immediately – they can’t
wait for it to sit in a container for four weeks, they need it now. We
provide those “quick-turn” goods, plus we can ship anywhere in the world
so quickly with the ports and LAX so close. And we understand domestic
goods – the classic example was a ship full of Nike sweatshirts that
came from Asia with the Nike swoosh on backwards.
You say we have a
lot of RCCs – Retail Crazed Cities – here in Southern California. What’s
the problem there?
A lot of our cities would like to see any piece of land used for retail
rather than manufacturing because they’re looking at the potential sales
tax dollars. But what they don’t look at is that you need people to have
jobs to spend the money. So a prime spot for a light industrial park
gets turned into a foundering retail development. The industrial park
would not only generate good jobs, but point-of-sale tax dollars and a
better quality of life for residents.
How does an industrial park do all of this?
The city of Vernon is a good example. They have a pretty tidy
manufacturing labor force, but little retail. The workers turn around
and spend in adjacent communities. In the meantime, Vernon generates tax
revenue off of more than $374 million in non-retail sales.
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