Workers’ Comp Top Woe for OC, State Execs
By SHERRI CRUZ
Orange County and California executives share a common dislike of the state’s high workers’ compensation insurance costs, though executives here say they’re more likely to up and leave than their statewide counterparts.
About 25% of OC executives,up from 19% last year,said they are considering moving in the next five years. That compares to only 5% of executives statewide who say they might move.
The numbers are based on the recently released 2003 Orange County Executive Survey from the University of California, Irvine, and the California Chamber of Commerce’s Business Climate Survey.
About 45% of OC executives,mainly manufacturers,said they’ve been offered incentives from other states. More than half of statewide executives, 51%, said out-of-state recruiters have contacted them.
What’s at stake is the future growth of OC and California companies. About 42% of local executives say expansion is likely or somewhat likely this year. Nearly 60% of those say they plan to expand in OC.
Less than a quarter of California executives say they’ll be expanding, and fewer say they may relocate out of state.
The number of OC companies saying they plan to expand is down from last year. In 2002, 70% of local executives said they planned to expand in the next five years.
The manufacturing sector, hardest hit by the economic slow down, is least likely to expand and most likely to relocate.
A couple of OC companies recently said they’ll take their growth elsewhere.
Costa Mesa-based Ceradyne Inc., a maker of industrial and military ceramics, said it’s close to landing a four-year deal for diesel engine parts. But the work stands to go to Kentucky, Ceradyne said, where electricity, workers’ compensation and housing are less costly.
Last week, Irvine-based title insurer Fidelity National Financial Inc. said it plans to move its headquarters to Jacksonville, Fla. Fidelity is set to keep about 500 jobs in OC but will grow in Florida.
Rising workers’ compensation costs are the biggest barrier to doing business in California, according to OC and statewide executives. About 71% of OC executives called it the No. 1 concern, followed by housing costs, high labor costs and land and building costs.
Statewide executives also cited workers’ compensation as the their top concern, though the California Chamber’s survey didn’t break it down by percentage.
The bulk of layoffs may be behind most OC and California companies. About 30% of OC companies reported layoffs last year. This year, only 16% of local and California executives say they have plans to downsize.
Manufacturers are most likely to continue cutting workers in the next five years.
THE PITCH
Incentives offered to California companies by out-of-state recruiters:
& #149; Reduced or no taxes
& #149; Money, other financial incentives
& #149; Moving assistance
& #149; Buildings, land
& #149; Loans, leases at favorable rates
& #149; Worker training
& #149; Better employee, business costs
Ceradyne’s Costa Mesa plant (photo)
