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Industrial Base Is Growing in O.C. : Manufacturing: Despite the loss of 45,000 jobs since 1989, more than 1,000 makers of goods have opened their doors in county since the recession hit in 1990.

October 08, 1995|JOHN O'DELL | TIMES STAFF WRITER

ANAHEIM — The air in the neighborhood around Blue Gum Street and Miraloma Avenue is a fragrant stew. The tang of paints and resins blends with the odors of machine oil, rubber, plastic, fresh cut wood and hot metal to create a husky perfume that lets you know a large manufacturing complex is just around the corner.

It is a perfume that some have suggested is fast dissipating in Orange County--blown away by increasing urbanization, a fragile economy and restrictive regulation.

Aaron Bann would disagree.

His family's manufacturing business has been a fixture in this freeway-close strip of Anaheim for 34 years, and if Bann has anything to say about it, All-Bann Enterprises will be going strong 34 years from now.

The company, which for years specialized solely in military goods, has also started producing exercise equipment.

Call it the poster child for new Southern California manufacturing.

While the aerospace, computer and defense contracting industries have been pared down in the past decade, the number of manufacturers actually has been growing as the survivors reinvent themselves.

Orange County, where 45,000 manufacturing jobs have disappeared since 1989, is a microcosm for what's happening throughout the region.

Despite the job losses, more than 1,000 manufacturing businesses have opened their doors in the county since the recession hit in 1990.

The new companies are mostly small, often started by people who used to work for one of the defense giants. They typically look for a specialty niche to fill, often concentrating in the health-care, personal appearance and apparel industries. "Everyone has focused on the aerospace downsizing and is acting like all manufacturing is going to disappear," says Jack Kyser, chief economist for the Los Angeles Economic Development Corp. "But there's a hell of a lot of life left."

Many manufacturers that once looked to other states for relief are staying, bolstered by a large, well-trained labor pool and a weak commercial real estate environment that has meant lower building rents and sale prices.

"We could have moved to Corona and spent a lot less money on our facility," said James Nagel, president of JSN Companies, a plastics manufacturer that moved from one building in Irvine to larger leased quarters in the same city about 18 months ago. "But we didn't want to get too far from our work force. They're a big part of the reason we are successful, and a lot of them couldn't have moved with us."

Recruiting and training new workers would have set the company back far more than it would have saved with cheaper rent, he said.

But lifestyle was part of the draw too, said Sandra Nagel, the family-owned company's vice president. "We work three shifts and we have people coming here late at night, so part of our decision had to do with safety. Irvine is a good, safe place for our people."

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Despite the emergence of new manufacturers, Orange County's employment numbers are still grim. Economists and other experts say more job losses will follow as the regional economy continues to struggle.

But most of the job losses are concentrated in areas affected by much greater forces than the general economic malaise.

Indeed, 80% of the jobs were cut from payrolls in just four of 20 employment categories, state Employment Development Department figures show.

Government spending cuts, which have punished the aerospace, electronics and defense industries for years now, helped account for about half the losses while nearly 10,000 jobs have been pared from computer makers' payrolls because of the economic turmoil in that highly competitive industry.

"If you take out the manufacturers who are gone because of defense and government cuts, the picture in Orange County is a very different one," says Harry Lambert, general partner of Costa Mesa venture capital firm Innocal.

"Venture financing conferences here are always packed, I see 600 people sitting in a ballroom, and many of them are entrepreneurs who want to start manufacturing something," Lambert said. "We have an office on the East Coast, and people there have nowhere near the business sophistication and drive that we see here in Orange County. There's a future for manufacturing here."

The number of Orange County manufacturers has grown by about 20%, according to business directory publisher Contacts Influential--which lists 8,522 manufacturers in its most recent Orange County edition, published last year.

"The whole picture is changing as industry becomes primarily technology driven," said economist Anil Puri, head of Cal State Fullerton's economics department.

"Manufacturing these days requires fewer but more sophisticated machines and fewer but more sophisticated, educated personnel to run them," he said. "That's worldwide and has been going on for some time."

Nearly a quarter of the county's manufacturing businesses have fewer than five employees, said Eleanor Jordan, Orange County labor analyst for the state Employment Development Department.

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