Burdened by the costs of doing business in California, Precision Dynamics, the City of San Fernando’s largest employer, is laying off 16 of its entry-level assembly workers. The eliminated positions include machine operators, material handlers and production inspectors. The jobs will be outsourced to the company’s 14-month-old factory in Tijuana. “We have some very low-margin products that are getting eaten alive from the worldwide competition. We can’t afford to stay competitive in some product lines, some of which are being shipped to Tijuana. As a result, 16 positions have been eliminated,” Fabian Grijalva, Precision Dynamic’s director of human resources, said. Grijalva looked for a silver lining in the decision. “The good thing about it is that though we’re shipping some of the lines to Mexico, our head count in San Fernando is higher than it was a year ago. Our goal is to upgrade skills in the local community, that’s why we’ve paired up with Valley College for job training. So that Valley citizens can be prepared to assemble some of the new product solutions here. Most of the higher skilled product manufacturing will remain in California. We have no intention of moving our base,” Grijalva said. Precision Dynamics employs 400 workers at its locations in San Fernando and Pacoima. By the end of 2004, it will have 90 full-time workers in Tijuana. Bruce Ackerman, president and CEO of the San Fernando Valley Economic Alliance, expressed regret at the loss of Valley jobs, but chalked it up to California’s difficult business climate. “We lobbied them to stay but (Walt Mosher, chairman of Precision Dynamics) said ‘here’s the black and white, here are the numbers.’ He remains very committed to the Valley,” Ackerman said. “There comes a time when all of the tools in our tool kit aren’t enough. We can’t compete with $3 an hour labor vs. $20 an hour labor. Additionally, Mexico has no workers’ comp premiums vs. California’s astronomical rates.” Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., said the layoffs will have some negative economic implications for the City of San Fernando. “Since they’re the biggest employer in San Fernando, there’s going to be some pain over there. The workers won’t be there spending their money in the city as they come to and from the facility. Other business activities might suffer. It’s not good news for the city and county. But it’s an ongoing trend. It just comes down to the basic cost of doing business in California,” Kyser said.