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Thursday, Mar 28, 2024

Simi Valley Manufacturer Planning Move to Arizona

Simi Valley Manufacturer Planning Move to Arizona By SLAV KANDYBA Staff Reporter A Simi Valley plastics manufacturer with 350 employees is seeking to relocate to Arizona, citing California’s high business costs from workers’ compensation and electricity as well as a lack of incentives. A last-ditch effort to keep the company in Simi Valley is being made by a “red team” comprised of government officials and a utility company representative, although it does not appear to have a shot at influencing the company. “We’re still planning to make a move,” said Paul Strong, CEO of Poly-Tainer. The “red team” was assembled in early July when a broker from Cushman & Wakefield real estate brokerage alerted the Los Angeles County Economic Development Corp. that Poly-Tainer was looking to move. Strong said he began exploring the possibility of a move two years ago, but decided to “wait out and see what’s going to happen” after former Gov. Gray Davis was recalled and Gov. Arnold Schwarzenegger voted in. “Our feelings are reversed now,” Strong said. “We’re not seeing the savings that were supposed to trickle down to us.” Strong said he is worried upcoming legislation may make things worse, not better, to do business in California. Because of that, he is planning to take the company to Phoenix, where he said he will be able to save up to 50 percent on electricity and avoid California’s 8-hour workday restriction. Arizona allows businesses to have employees work 12 hours, he said. Seeking property “Right now we’re in a situation where we’re seeking property (in Phoenix),” Strong said. Although Poly-Tainer is located outside of the LAEDC’s jurisdiction, LAEDC’s San Fernando Valley regional manager Alex Rosas began organizing a “red team” because many Poly-Tainer employees live in Los Angeles County, he said. The “red team” Rosas put together consists of David Iwata, director of marketing at the Economic Alliance of the San Fernando Valley, Glen Becerra, Simi Valley city councilmember, Laura Shockley, Southern California Edison and Brian Gabler, economic development manager for the City of Simi Valley. These officials met with Strong and the head of human resources at Poly-Tainer earlier this month to identify issues and try to come up with solutions. What they found was all too typical workers’ compensation and high electricity costs. “It’s kind of beyond our reach,” Rosas said. Rosas put in a request for a conference call and was waiting to hear back from David Crane, Gov. Schwarzenegger’s special adviser for jobs and economic growth, who is also the governor’s liaison to the California Commission for Jobs and Economic Growth. The Commission is a non-government entity with executives from business, labor and non-profit sectors. Vince Sollitto, a spokesman for Schwarzenegger, said Crane was the contact agencies such as LAEDC often call when companies are considering relocation. State issues Gabler, the Simi Valley economic development manager, said he was aware Poly-Tainer was looking for another location, but his hands were tied as well. “Most of their issues are things out of their local control,” Gabler said. “We are somewhat limited in our ability to solve the major problems that a lot of California employers are facing.” Gabler added “if they’re looking at training issues, we can help them.” According to a project briefing provided by Rosas, Poly-Tainer cited several issues for its consideration of moving to Arizona: >The Manufacturer’s Investment Credit no longer available >Workers’ compensation no relief >SB-2 and Family Leave >Overtime pay for more than eight hours per day >Electricity costs too high >Cannot find qualified workforce The “red team” was able to address the electricity and workforce issues. Shockley, the Southern California Edison representative, was working with Poly-Tainer on new electricity rates. A Work Source Center was contacted to deal with the workforce issue, and a follow-up meeting was arranged with Kenn Philips, director of education and workforce training at the Economic Alliance. But the other issues, perhaps the most critical for the company, are waiting to be addressed at the state level. “Unfortunately, there is not a whole lot we can do to alleviate the workers’ compensation costs,” Gabler said. Poly-Tainer’s Strong, meanwhile, isn’t optimistic about his company’s prospects of staying in Simi Valley, even with the governor’s intervention. “It’s just a real shame what’s happening here. The governor is trying really hard but I just don’t know if our company can remain viable (in California),” Strong said. “We just don’t see anything promising on the horizon.”

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