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Coffeepot maker vents about doing business in California

Costly housing, heavy traffic, skewed spending priorities are a bitter brew for Wilbur Curtis Co. Only its deep roots in the state keep it from moving.

July 30, 2009|MICHAEL HILTZIK

Wilbur D.Curtis invented the globular glass coffeepot, that staple of coffee counters everywhere, in 1940. Since then his son and grandsons have turned Wilbur Curtis Co. into a manufacturing concern that earns revenue approaching $100 million by turning out commercial coffee brewing equipment from a sprawling factory in Montebello.

But their long history in California doesn't exempt the Curtis family from the costs and hassles that give this state its reputation as one of the hardest places in the country to do business.

Their concerns are what brought me one morning this week to the company's plant a few miles off Interstate 5. I was there at the invitation of Joe Laws, a former entrepreneur who joined the company nine years ago as chief operating officer, for a tutorial in what underlies the state's bad name.

The answers may surprise you.

There's no point pretending that the state's anti-business reputation is a right-wing rap on the liberal Golden State, or a plot by the Chamber of Commerce to pump the Legislature for special favors, or -- here's the bottom line -- undeserved. It's as real as rush-hour traffic, and anyone concerned about improving the quality of life for all Californians needs to take it into consideration.

There are lots of sound reasons for a business to locate in California. It might want to be closer to its suppliers and customers in the biggest market in the country, for example.

"But if your customers and vendors are out of state, like ours, that advantage goes out the window," Laws told me.

Indeed, most of what Curtis makes gets shipped out of state; its direct customers are typically coffee roasters, who provide brewing equipment to the convenience stores and restaurant chains buying their beans and teas on contract. A company that exports its products across the state line and imports revenue into California, Curtis is exactly the kind of business the state should be working feverishly to protect.

Yet it's also the kind of business whose issues tend to fly under the radar of legislators, governors and (let's face it) newspaper columnists.

Curtis' modern, 186,000-square-foot factory is filled with the sounds of stainless steel being cut, stamped and folded to make brewing apparatuses adorned with the company's swooping "C" insignia.

The company prides itself on staying atop innovations in the trade. Leading me on a plant tour, Mike Curtis, the vice president of operations and one of Wilbur's two grandsons in the executive ranks, stops in front of a rack of squat stainless steel coffee urns -- the kind with a glass level indicator and a spigot with a plastic handle in the front that virtually screams "diner."

"We've been building these since the 1950s," he says. "Today they're the smallest part of our business, and declining." That's because they've been superseded by the company's "Gemini" brewers, which use digital technology to brew coffee and keep it at a precise temperature. Digital automatic cappuccino dispensers are another fast-selling item.

The Gemini assembly line, which used to turn out about 32 machines with 13 workers, has been refined to the point where it can turn out 40 machines a day with six workers.

"That's what you have to do to survive," Laws says.

Not all the issues Laws raised with me in our conversation over coffee (naturally) are the direct result of action by the Legislature or the governor or are easily resolved in Sacramento. Some are the consequence of life in a teeming region.

High housing prices, for instance. Some of the plant's workers have to commute 100 miles so they can live in reasonably priced communities. The real estate market is a high barrier to recruiting management talent from outside the state. Trying to fill an executive position a few years ago, Laws narrowed the search to two candidates living back East. "At the end of both interviews I said, 'Do you have a quarter of a million dollars?' " he recalled. " 'Because that's what you'll need for a down payment on a house here.' " Neither took the job.

Yet it's plain that the state government has failed in precisely those areas where it can make a difference. Laws' main concern isn't strictly how much money the state spends -- it's that the bucks don't go where they count.

His two biggest issues are education and infrastructure. "We pay a fortune here to educate people on basic things like writing and math skills that they should have learned in high school," he says. The company, whose workforce is mostly Latino, also provides training in English as a second language -- including for some employees who came through the public schools.

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