California Responds to Needs Of Firms With Good Results
IN February 1993, New United Motor Manufacturing Inc. (NUMMI) of Fremont, Calif., was informed by the California Department of Fish and Game that a burrowing owl occupied land on which NUMMI wanted to build a plant. The company would have to set aside 6-1/2 acres for the bird, the department said, at a cost of about $1.6 million.Skip to next paragraph
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Enter Tina Frank, regional director of the California Trade and Commerce Agency's (CTCA) Bay-area office. She arranged a meeting. After company executives sat down with Fish and Game representatives, as well as officials of Fremont and nearby Alameda, a significant compromise was reached: NUMMI would have to construct two burrowing-owl nests at a cost of less than $1,000.
It was one of recession-mired California's most recent attempts to reach out to its beleaguered business community. Teams drawn from a revolving pool of about 50 of the state agency's 228-member staff act as catalysts in problem-solving. The teams contact key local and state officials with the intent to negotiate, streamline, and expedite business expansion and development plans for California-based firms, or for out-of-state businesses to relocate in California.
CTCA Secretary Julie Meier Wright introduced the concept statewide in 1991. It has since garnered full bipartisan support from Republican Gov. Pete Wilson and Democratic Assembly Speaker Willie Brown.
``When my administration hears of a major California employer who is considering leaving our state, we will unleash a strike force,'' Governor Wilson promised in a state-of-the-state address in May 1993. ``They will do what's needed to let California companies compete for and win jobs.''
``Red Team'' members seek out those in need of help with finding relocation sites, coordinating meetings, obtaining loan assistance, reducing energy rates, and even lobbying regulatory agencies. The list of success stories includes 20th Century Fox Studios, Sony Corporation, Intel Corporation, Dole Fresh Vegetables, Kraft General Foods Inc., Fender Guitars, Anheuser-Busch Companies Inc., and Entenmann's Bakery.
``The Red Teams have become a very visible indicator that a new attitude is blowing through California about embracing its own businesses,'' says Jack Kyser, director of the Los Angeles Economic Development Corporation.
For example, after dispatching groups of public and private officials, agency members persuaded Danish toymaker Lego to build a proposed $100 million theme park called ``Legoland USA'' in Carlsbad, Calif., near San Diego, rather than in Virginia.
``Sometimes in California it's just the procedure that can kill you,'' says Dennis Cuneo, vice president of corporate planning for NUMMI, which also used Red Team liaisons with the Air Resources Board to speed a permit on manufacturing emissions.
``The months it would have taken to clear the red tape would have devastated a production schedule we were committed to,'' Mr. Cuneo says.
The change in attitude has been quite startling to many. Ronald Ferner, vice president of operations at the Campbell Soup Company, says he remembers talking to state officials eight years ago when the company wanted to do something about an aging facility near Sacramento. ``They said, `There is nothing we can do.... If you want to leave, clean up the place, and turn out the light,' '' Mr. Ferner recalls.
But two years ago, when Campbell Soup was considering moving to another state, trade agency officials took action. ``They coordinated all the appropriate officials to research and detail available sites and programs,'' he says. ``If they didn't, Campbell Soup would be in another state today.''
Bill George, chief spokesman for CTCA, says staff and budget are growing. The 1994-95 budget year includes $56 million for 228 staff positions, up from $42.5 million for 163 staff the year before. Last year's budget was $14 million more than the previous year's.
Ms. Meier Wright emphasizes that the Red Teams are there to bring decisionmakers to the table, not to do all the work or make all the decisions. As the state rolls out more reforms - from speedier permit processes to fines against state agencies for foot-dragging, use of Red Teams should become the exception rather than the rule, Meier Wright says.
``It's not like California is the promised land now,'' Cuneo adds. ``But it is beginning to turn around.''