Advertisement
YOU ARE HERE: LAT HomeCollections

EARTHQUAKE / The Long Road Back : Overcoming the Jolts : Ramifications for Southland Business Mount; Tourism Rebound Seen by Summer

January 26, 1994|NANCY RIVERA BROOKS | TIMES STAFF WRITER

Evidence continues to mount that Southern California took a hefty economic wallop from the Northridge earthquake that will be felt for months to come.

The local tourism industry will take an estimated $308-million hit because of the quake. That translates into the temporary loss of 9,240 jobs in the next few months, the Los Angeles Convention & Visitors Bureau projected Tuesday in the first detailed report on the subject. A rebound is expected by summer, however.

Trucking firms, meanwhile, said the freeway closures and traffic tie-ups continue to add two or three hours to their trips between Southern California and the central and northern parts of the state--and that those delays are forcing them to raise shipping prices, which could be reflected at the grocery store.

What's more, the quake threatened businesses representing more than a third of California's manufacturing base, according to a survey by Dun & Bradstreet released Tuesday. Because more than half of all firms in the affected area were under financial strain before the quake, "this could mean a long and troubled recovery for these businesses, if they can recover at all," said David T. Kresge, an economist with the business information consulting firm.

Among the damage estimates reported Tuesday, Pacific Bell said the toll to its Los Angeles offices may reach $25 million, although little harm was done to its telephone network.

The blow to tourism, one of the area's main sources of employment, is particularly frustrating because the sector was on the rebound from the effects of recession and the 1992 riots, said Michael Collins, senior vice president of the Los Angeles Convention & Visitors Bureau.

But the quake's cost to the $20-billion industry could have been worse. It is expected to total about half the loss in tourism revenue attributed to the riots, he said.

The bureau's survey predicts a 4% to 5% annual decline in tourism business in Los Angeles County, mostly from declines in the number of group tours and convention visitors over the next three months. That is much lighter than the 10% to 20% decrease--or $2 billion to $4 billion--projected last week by economists at Chapman University in Orange. The convention bureau study, conducted by PKF Consulting, included a sampling of hotels and a survey of how tourism fared after other natural disasters.

Before the quake, PKF had estimated that 1994 tourism revenues would rise 2.6%, reversing three years of decline. The convention bureau has yet to release a revised overall estimate for 1994.

For the people who hold the estimated 9,240 jobs that will temporarily disappear, "it's going to hurt," Collins said. Tourism accounts for about 400,000 full- and part-time jobs in Los Angeles County.

"No one is pretending this is good," Collins said, "but by May, this will be behind us."

On the transportation front, some truckers have begun raising prices $250 a load on the Los Angeles-to-San Francisco route to cover the added fuel costs and drivers' extra hours behind the wheel, said David Titus of the California Trucking Assn.

The typical charge for that 380-mile trip would be between $475 and $570, so the $250 price hike equals as much as a 53% increase. However, the truckers' alternate routes around the closed Los Angeles freeways are adding as many as 200 miles to their trip.

"You can't absorb that many miles and that many hours without increasing the cost of doing business," Titus said.

Ken Oliver, president of Three Rivers Trucking Inc. in Long Beach, which hauls citrus fruit between Central and Southern California, said he is charging customers an extra $100 per round trip. His usual price for a shipment between the San Joaquin Valley and Los Angeles, for instance, would be $500.

His customers' reaction? "No problem," Oliver said. "They've made commitments to their customers, so we have to move this product."

Whether the higher transportation costs reach consumers will depend largely on the goods involved. An extra $250 charge on a truckload of color television sets might not nudge the TVs' retail prices. But if the goods are vegetables, paper towels or cat food, the extra shipping costs could translate into a noticeable increase at the store.

Despite the delays, some transportation firms said their shipment schedules were not falling seriously behind.

"We did a couple of loads going up to Bakersfield yesterday and didn't have any problems," said Steve Baldwin, a dispatcher at the Duarte-based Coastal Connection trucking firm. "We left early in the morning."

The Dun & Bradstreet survey found that businesses representing more than a third of California's manufacturing base are within 40 miles of the epicenter of the Jan. 17 earthquake. Of particular concern are high-tech manufacturers in areas of Canoga Park, Sylmar, Chatsworth and elsewhere that are especially vulnerable to the loss of physical plants and equipment and rely on good roads to get supplies and ship products, Kresge said.

Because high-tech is an intensely competitive field, setbacks or delays could be costly, he added.

Dun & Bradstreet's survey sets a starting point for further study of the quake's effects on business, expected in four to six months.

Among Dun & Bradstreet's other findings:

* More than 177,000 firms within 20 miles of the quake's epicenter employ more than 1.6 million people--200,000 of them in manufacturing.

* 40% of the factories in the area are in high-tech manufacturing.

* More than 70% of the firms within 40 miles of Northridge have fewer than 10 workers.

Times staff writers Patrick Lee and James F. Peltz contributed to this story.

* TAX MERCY: IRS waives late-filing penalties. D3

* VETERANS COVERED: Vets tap state temblor insurance. D3

Advertisement
Los Angeles Times Articles
|
|
|