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Manufacturers
target Inland Empire - Contrary to rumor, factories are humming with
products made in the U.S.A Although manufacturers pay 25% more than the national average to operate in California, they continue to open factories in the Inland Empire. California manufacturers pay more in taxes, wages, energy costs and rent, said Gino DiCaro, spokesman for the Sacramento-based California Manufacturers and Technology Association. "It costs California manufactures 25% higher than the national average to operate," he said. California lost 375,000 manufacturing jobs since January 2001, according to the association. But the Inland Empire added 2,926 manufacturing jobs from 1998 to 2005, according to a report by Kevin Fleming, director of the San Bernardino Community College District Center for Business Excellence. Syntax-Brillian, which makes liquid crystal display televisions, opened a 50,000-square-foot assembly plant in Ontario Oct. 24. The plant employs 120 assemblers, office workers and warehouse workers. The producer of the Olevia brand plans to expand its plant into neighboring space occupied by Toyota Motors. Toyota plans to make a decision about moving or staying in Ontario by the end of the year, said Vincent Sollitto, Syntax-Brillian chief executive officer. If Toyota remains in Ontario, Syntax-Brillian is likely to lease space in neighboring buildings to expand its assembly plant, Sollitto said. "Originally we were making our televisions in Taiwan and shipping them to North America, but we had to pay a 5% duty on top of added material costs for packaging," Sollitto said. "By operating in Ontario we save on duty costs, shipping costs and time. Our products aren't sitting on the water for three weeks." Solar Link International Inc., a wholly owned subsidiary of Taiwan-based Pou Chen Group, makes shoes at a plant in Ontario where it employs about 300 people. "To make products here is a higher cost than in China," said Johnny Tsai, Solar Link vice president. "But even if it is a little bit higher at 5% to 10% more, it's worth it to make products here because of the image and it's easier to sell and distribute." Tsai set up the shoe plant in Ontario eight years ago under the Solar Link International name. Solar Link owns several buildings in Ontario and plans to lease space to Syntax-Brillian when it expands in the future. "I stayed here because going to Mexico I can't control the costs and it's easier for me to manage operations here," Tsai said. "Crossing the border with inventory takes time. But we have to have inventory always in stock, and the logistics and timing are all issues. Having a factory here means I can have less inventory and I am already close to the market, which lessens logistics issues." Tsai convinced Sollitto to consider California and open an assembly plant in Ontario. "We looked at Tsai like he was from outer space when he suggested we move to California," Sollitto said. "We found that we could save time in shipping and have one-tenth less in shipping costs and we'd be near a plastics powder manufacturer that sells cheaper than we can get it in China." Syntax-Brillian saves 5% to 7% in margin by producing television in Ontario, Sollitto said. "It's cost-effective to produce here," Sollitto said. "Logistically and cost-wise it's beneficial to make [LCD] televisions near the end-market." Meanwhile Pacific Coachworks opened a 66,000-square-foot recreational vehicle plant in Riverside Oct. 2. Pacific Coachworks employs 94 assemblers and office workers and plans to increase its staff to 150 people in about 18 months. Founders Tom Powell and Dane Found opted to open a plant in Riverside because the demand for fifth-wheel trailers is in California. Shipping from the East Coast costs too much, Powell said. "Producing trailers in Riverside is a strategic and geographic advantage," he said in October. "Companies that ship here from the East Coast have to pay extra freight and shipping costs; we don't." "Even with the extra costs of doing business in California, this is the largest market, and that's why we're here," Found said. Another manufacturer, Hanesbrands Inc., moved its men's underwear and sleepwear products distribution operations from Weston, Fla., to Rancho Cucamonga in July. Hanesbrands owns a 250,000 square-foot distribution center in Rancho Cucamonga where it employs 150 people. Consolidation of Hanesbrands' operations in Rancho Cucamonga supports an expanding supply chain in Asia and reduces lead times and improves speed to market, officials said in a release. Headquartered in Winston-Salem, N.C., Hanesbrands employs 50,000 people in 24 countries and makes T-shirts, bras, panties, men's and children's underwear, socks, hosiery, casual wear and active wear. Riverside and San Bernardino counties are home to 4,013 manufacturers. Manufacturing is dying in the United States, but not in the Inland Empire, Fleming told The Business Press in October. A convergence of affordable land, access to the freeway system and a growing population are attracting and keeping manufacturers in the Inland Empire. "California is viewed as not business friendly, but we've seen the opposite in Ontario," Sollitto said. |
