Out-of-State Recruiters Easing Up
By RAJIV VYAS
One state sent flashlights and postcards to power-hungry California companies. Another put up a Web site focused on power issues.
The goal was the same: recruit as many disenchanted California companies as possible.
But as the lights have stayed on here, the efforts of out-of-state recruiters have faded.
States such as Kansas and Tennessee have lowered their marketing budgets for California and tweaked their pitches to cover issues besides electricity. The Golden State isn’t the hot-button issue it was last year, they said.
This year, “California will be part of our focus,” said Tony Grande, commissioner of the Tennessee Department of Economic and Community Development. “But there will be other areas as well,” he said.
Detroit is set to be Tennessee’s major focus this year, Grande said.
In 2001, Tennessee’s war chest for California was around $400,000 out of an overall budget of $2.5 million.
This year, “the overall budget will be the same but California could go down a little,” Grande said.
The Kansas City Area Development Council, which set up the www.smartkc.com site touting its state’s reliable power and other benefits, also is set to spend less on California.
Last year, the development council’s budget to specifically recruit in California was more than $100,000 and focused on recruiting companies from the Central Valley and Southern California.
In 2002, the council said it will spend less and shift its focus to Northern California and other West Coast states.
“We may spend less this year because last year we had lot of startup costs,” said Martin Mini, a spokesman for the Kansas City group.
In 2001, Kansas City officials made five visits to California, most of them to the Central Valley and Southern California, including Orange County.
Recruiters saw California’s power crisis as an issue that they could seize on and use to convince companies here to relocate or expand in their states.
But with a steady supply of power,albeit at higher prices,recruiters are turning to other issues. Those include the cost of doing business and quality of life here and in neighboring states.
“It’s not going to be just Northern California,” said Tim Cowden, senior vice president of business development at Kansas City’s development council. “We are focusing on the higher costs that are present not just in California but all along the West Coast.”
California always has been a prime target for recruiters.
A decade ago, plunging home prices and the aerospace meltdown led pundits to predict that California’s best days were behind it.
But California emerged stronger from the early 1990s downturn and companies came here rather than move out.
Recruiters did have some luck here last year. Costa Mesa-based Valentec-Wells LLC, a metal stamping and plating company, closed its Costa Mesa plant and shifted work to two Midwest states. The company now operates a plant in Ohio, where it employs around 100 people, and one at the Lake City Army Ammunition Plant in Independence, Mo., where it has 80 workers.
IPC Communication Services Inc., a printer and compact disc replication company that’s part of Milwaukee-based Journal Communications Inc., shifted some operations from Foothill Ranch to Michigan in part due to energy costs.
Tennessee’s Grande said he still is talking to dozens of companies in California, though he declined to offer names.
He said he expects to convince a few of them to expand or relocate to Tennessee.
With a high cost of living, long commutes, education issues and stringent regulations, California will continue to be a main poaching ground, he said.
