Out-of-state recruiters who’ve watched haplessly as California’s economy has surged are back in action as the state is grappling with a power shortage and the threat of rolling blackouts.
Companies in Orange County are seeing renewed sales pitches and phone calls as states intensify their efforts to lure some of the hot, fast-growing companies here. One state even sent out flashlights and batteries to grab the attention of local executives.
“A few states have become very aggressive recently,” said Bill Carney, vice president of business development at the Orange County Business Council.
David Sonsken, executive vice president and chief financial officer at Santa Ana-based chip maker Microsemi Corp., said he recently got a pitch letter from officials in Tennessee. Microsemi is a ripe target for recruiters since power supply is crucial for the company.
But like most past attempts, recruiters are having little success in convincing companies that they should relocate because of California’s power crunch. “We are definitely not considering relocating to another state,” Sonsken said. “In Orange County, you get the required talent, which is difficult to find in other states.”
Relocation decisions are not made overnight, Sonsken said. And companies aren’t apt to walk out of a state because of short-term problems, he added. Microsemi, which makes chips for computers, wireless phones, networking gear and other products, employs 650 people in OC and is expected to add 50 more jobs in the next year or so.
“We sure haven’t been approached, but even if we were, the answer to relocation is no,” said Jody Callahan, director of operations at Santa Ana-based Astech Manufacturing Inc., a maker of aerospace parts. States such as Texas and Tennessee have stepped up their courting of California companies. Texas officials have taken out ads in Bay area newspapers and recently put out a press release titled “Lights are big and bright in Texas: State Promises Affordable, Stable Electricity to California Businesses Looking to Expand.”
“Texas is pushing really hard,” Carney said.
“We have great weather, we have a beautiful ocean, but unlike California we’ve got power,” said Jeff Moseley, executive director of the Texas Department of Economic Development, in the press release.
Tennessee has gone a step further. The Tennessee Department of Economic Development has sent flashlights along with brochures and other sales pitch material to OC saying that the state has sufficient power thanks to the federal Tennessee Valley Authority.
While relocation is a long shot, power is a concern for OC manufacturers and other businesses. Come summer when most homeowners are likely to turn on air conditioning, the power shortage stands to be more acute.
“The problem was a nightmare in January,” Astech’s Callahan said. “We are now very concerned about the summer.”
Callahan said he’ll be watching to see how the state handles the prospect of rolling blackouts and brownouts. But with big investments in equipment and workers here, that’s about all he can do, he said.
“We have a very capital-intensive business,” Callahan said. “It would cost us millions just to relocate our plant and equipment.”
Out-of-state recruiters had a field day in the early 1990s when California was plagued by recession, aerospace downsizing, earthquakes, fires and even the Los Angeles riots. But the pitch isn’t as easy this time around, said Gary McKenzie, chief executive of Costa Mesa-based data center operator iCoTech Inc.
“Even if Tennessee offers cheap power, who wants to live there,” he said. n
