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Friday, Jun 9, 2023

Alliance Refocuses to Stem Departure of Companies

The Economic Alliance of the San Fernando Valley was formed in the 1990s as a marketing machine that was supposed to advertise the region to outside businesses. But it has been less of that lately, and more of something else due to tough economic times California businesses are enduring. “We are moving more towards the retention mode than expansion,” said Alex Rosas, director of economic development at the Alliance. “Most of our projects are either retention or expansion not as much attraction.” According to Bruce Ackerman, the president and CEO of the Alliance, the shift occurred at the beginning of this year and involved as much as “20 percent of our resources.” Most of the shift came from the workforce and education programs, which are headed by Kenn Phillips. Phillips has been spending about “25 to 30 percent” more time working with Rosas, said Ackerman. One of the latest projects the Alliance is doing is “putting together an outreach team” to small manufacturers throughout the Valley, an industry sector thought to be most adversely affected by the ills of the California business climate such as high workers’ compensation costs. “Economists have been saying (manufacturing) is growing, but we’ve seen downsizing,” Rosas said. “We can’t solve all the problems, but at least we can solve some.” The ‘outreach team’ consists of corporate and education partners, and includes Washington Mutual, The Gas Company, Los Angeles Valley College and others. The team’s first order of business will be to conduct a phone call campaign to manufacturers to tell them about the Alliance’s services. Depending upon each situation, solutions may range from consultation to a dispatch of a “red team” of officials who can attempt to resolve problems and keep a company in the Valley, or at least L.A. County, Rosas said. If the problem is due to a lack of a trained workforce, the Alliance may have a direct solution. It has restructured its workforce and education initiative to cater to the needs of companies that are on the brink of leaving the area. The change was based on studies collected by the Alliance that were done by the Los Angeles County Economic Development Corp. and other agencies. Workforce development “We haven’t abandoned the passion to improve education, but we’ve refocused,” said Ackerman. “We’re spending much less time in schools and more time working in workforce development. It’s market-driven, very market driven. Before it was ‘let’s get this young person through school’ and the second part was ‘let’s get them a good career.'” For instance, the Alliance has partnered with community colleges and WorkSource California centers to have students trained and “transitioned to work” at call centers at Medtronic Inc.’s Northridge-based MiniMed, and Time Warner Cable, among others. These companies had high turnover rates and blamed them on the lack of skills of the new employees. “We developed a process endorsed by the businesses,” Phillips said. The Alliance’s strategy is a direct result of research of the LAEDC and the National Center for Business Enterprise and Research, which surveyed more than 25,000 companies of varying sizes in L.A. County to determine issues concerning them. The Alliance turned to that database to get names and contact information for the companies based in the Valley. Manufacturers were selected as first targets for outreach because they are at the “highest risk,” as deemed by the studies, and may be prone to “silo mentality,” Ackerman said. He explained they may be too wrapped up in their work to research options available to them so it has become the Alliance’s job to promote their programs. And for the Economic Alliance of the San Fernando Valley that’s a change of direction. “The message has shifted from external marketing,” Ackerman said. “We’ve added that component of internal marketing.” Ackerman described the need “to be flexible” by economic development organizations such as the Alliance and respond to immediate economic issues. “It’s just not one size fits all,” he said, adding that the organization’s board of directors has been “very supportive” of the efforts. David Fleming, chairman of the board of directors at the Alliance, described the reasons behind the shift. “Sometimes one is on offense attracting new business and sometimes one has to play defense (convincing business to stay),” Fleming wrote in an e-mail. “The business climate determines when we play which one. Many businesses have told us they intend to leave, cut back or expand operations elsewhere. Our mission is to respond to what business is telling us.” Fleming added that L.A.’s tax program, “regulation, city-imposed fees” and “lack of concerns regarding the problems” are making the bad business climate statewide even worse within the limits of Los Angeles.

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