California INTERNATIONAL BUSINESS Report | |
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CONTENTS |
California Political Season Continues California's endless political
season continued with the completion of a long bitter primary campaign this month. State Treasurer and former real estate developer Phil Angelides defeated State Controller and former eBay executive Steve Westly as the Democratic candidate who will face Governor Schwarzenegger this November. Possibly because of the negative tone of the campaign both candidates failed to inspire voters and the election had one of the lowest voter turn outs in State History. At a speech before the Silicon Valley Leadership Group, Mr. Angelides described his business
philosophy this way: "I believe there's a high road to prosperity - where we have the most livable communities, the cleanest environment, and the best-educated workers in the world, so we can compete for and win the high-wage jobs of the future, jobs we can't even imagine today- because, let's face it: we can never win a race to the bottom. If companies want cheap, uneducated labor - if they want 18-hour workdays without pensions or health care -- they'll always find it cheaper in Indonesia or Malaysia anyway". Mr. Angelides
faces an uphill battle in attempting to unseat Governor Schwarzenegger. The
State Legislature recently approved the Governor's infrastructure bond
proposal, and the State Treasury received billions of dollars in unexpected
tax revenue allowing a generous budget for education and other
programs. While the Governor's popularity is still below fifty percent it has
been increasing recently as he distances himself from President Bush, who is deeply unpopular in California, and has been working to renew the
bipartisan approach that made him popular during his first year in office. |
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SPECIAL NOTICE: Phone Conference- This Wednesday, June 14, at 3:30PM PST
This Wednesday at 3:30 PM we will be sponsoring a conference call to discuss international business development in California. During this call we will discuss the services and technologies provided by the California Trade Network, the formation of a new non-profit organization: "The California International Business Association" and other issues related to international business development for companies in California. There is no charge for the meeting but space is limited. Please RSVP to CALTRADE@GMĄIL.COM and we will send you the phone number/access code, participants list and an agenda for the meeting.
_________________________________________________________________________________________________  News and Politics back
Legislature Approves Infrastructure Proposal  In a much needed victory for Governor Schwarzenegger, the State Legislature has approved a series of bills that will place a record public works spending plan before voters in November. Schwarzenegger had made passing a massive public works spending plan the centerpiece of his re-election year agenda. During his state of the state address in January, the Republican governor proposed selling $68 billion in bonds to help pay for $222.6 billion in spending over 10 years. The scaled down $37.3 billion package will still be the largest bond issue in California history. This has revived a proposal that had broad public support but failed to pass the Legislature. Governor Schwarzenegger called the votes in each house “a landmark accomplishment that will yield benefits for generations to come". “For the first time in a generation, we are making a real investment in our state's future,” he said in a statement after the votes in the Assembly sent the bills to his desk. The version passed by the Assembly and Senate asks voters to approve four propositions: $19.9 billion for roads and transit projects; $10.4 billion for school and university buildings; $4.1 billion for flood control; and $2.85 billion for affordable housing projects. “The Legislature came together and put its arms around an investment that hasn't been made in decades” Assembly Speaker Fabian Nunez said. State Senator President Don Perata said the projects funded through the bond package will have an impact on Californians' daily lives. “It's a good, solid piece of investment that will help fortify California's middle class,” he said.State Losing Payroll Jobs. California lost jobs in both March and April. a drop due largely to a decline in the construction industry. The drop of 13,400 payroll workers in March is largely because home builders stopped hiring as the housing boom slowed dramatically. Builders needed 9,400 fewer workers in March, the second-biggest monthly drop in construction workers since 1995, the state Employment Development Department reported. Since the construction and the housing industry have been driving the California economy in recent years, this could be a bad news for the State. Economists initiatially thought that it might have been because it had been raining a lot, which slows construction projects. Howard Roth, chief economist for the state Finance Department was quoted by the LA Times as saying he thinks the drop was prompted by more than weather. "We've already seen a slowing in home sales, and we've already seen a slowing in construction permits- the next step would be to see some slowdown in construction jobs". Others economists agree that there is reason for concern. "This shows the risks facing the California economy," said Steve Cochrane, director of regional economics at forecasting firm Moody's. The risks, he said, were rising interest rates, record-low housing affordability and high energy prices. The decline continued in April with a reported net loss of 2,600 payroll jobs and this time the losses spread to the retail industry. Some 870,000 Californians were seeking work in April, up by 22,000 from the previous month. The state's unemployment rate edged up to 4.9 percent during the month. It was 4.8 percent in March and 5.4 percent in April 2005. About 8,300 payroll jobs in construction were lost during the month. Other industries to shed jobs was the financial activities sector, which includes jobs in real estate, credit and insurance companies. Retailers, warehouse operators, media and transportation companies also were among those to lose jobs over the month. The largest annual decline in payroll jobs occurred in the manufacturing sector, which shed 7,400 jobs compared to April 2005. State has No. 3 poverty rate in U.S., study shows. California's high housing costs and large population of working poor drove the state nearly to the top of a new poverty ranking, a study released by Public Policy Institute of California has found. When the federal poverty threshold - $19,157 for a family of four in 2004 - is adjusted to take into account housing costs, California has the third-highest poverty rate in the nation; 17 percent of Californians are poor. The study also found that the state's poverty rate has been rising faster than the nation's since 2001. "This study is a step toward a better understanding of who are the poor and how many are poor and how we can get beyond saying California is a high-income state" said study author Deborah Reed. There are several indications that the number of "working poor" is increasing in California but not in other parts of the country. Among low-income California families, earnings have decreased 4 percent since 1969, while nationwide they have risen 14 percent. Less-educated workers make less money in California than in other parts of the country and a larger number of low-education, low-wage workers live here, including many who are foreign-born. "There's been a shift away from good jobs for people with lower education levels" Reed said. In addition, California's higher housing costs drive up the poverty rate. The study found that poverty was greatest in the San Joaquin Valley, the Central Coast, the Inland Empire and Los Angeles County. Among the major racial and ethnic groups in California, U.S. - born whites have the lowest poverty rate (9%). African American have poverty rates more than twice as high (20%), but they make up only 8 percent of the poor in California because they are a small share of the State's population. Latinos have poverty rates similar to African Americans (23%) but poverty among U.S. born Latinos is substancially lower than among foreign born Latinos (14% verses 27%) reflecting the progress across immigrant generations. For Asians, poverty rates are relatively low with the exception of some of the Southeast Asia refugee sending countries of Vietnam, Laos and Cambodia. Pearce's study of California, which took into account more cost factors, found that a full 30 percent of the population was not making ends meet. The full report can be found at this link: http://www.ppic.org/content/pubs/cacounts/CC_506DRCC.pdf
California Home Sales Falling. Home sales fell across California during April, but prices continued increasing from year-ago levels in most markets, according to the L.A.-based California Association. Last month, sales declined an annual 21.4 percent and slipped 4.1 percent from March. April continued the sales slide that began at the start of last year's fourth quarter. The April 2005 sales total was the second-highest since the association began tracking the market. Sales are softening in part because of high prices and rising mortgage rates. The 30-year fixed mortgage rate is at its highest point since June 2002. The rate for adjustable mortgages is at its highest since August 2001. Last month 30-year fixed mortgage interest rates averaged 6.51 percent, up 11.1 percent from 5.86 percent a year ago. Adjustable mortgage interest rates averaged 5.62 percent in April, up 32.2 percent from 4.25 percent a year ago. "Concerns about the likelihood of future interest rate increases continue to influence the market," said association president Vince Malta. The median price, the point at which half the houses cost more and half less, increased an annual 10.2 percent to $562,380 and was unchanged from April. In Los Angeles County, where sales fell an annual 12.8 percent, the median price increased an annual 17.3 percent to $567,480 and inched up 1.9 percent from March. While many in the real estate industry remain optimistic, this combination of rising prices and falling demand have renewed fears that a deflationary bubble may be in store for the California housing market.
More California homes nearing foreclosure. Lending institutions sent 18,668 default notices to state homeowners from January to March, up 23.4 percent from the fourth quarter and 28.7 percent from the year-ago period, according to La Jolla-based DataQuick Information Systems. The number of notices, however, is still below the state's historic average of 33,000 default notices per quarter. "It seems like a high increase, but it's only above abnormally low levels," said DataQuick analyst Andrew LaPage in the Contra Costa Times. "And it tends to lurch whenever it's coming off the bottom like that". Economist Stephen Levy agreed that the jump isn't worrisome in itself, but said it could be a sign of building stress in the housing market. He believes that many home owners will be at greater risk for default in the coming months, as teaser rates on the adjustable-rate or interest-only loans that helped fuel the recent real estate boom adjust to higher minimum payments. "That may put a lot more people into danger," said Levy, senior economist with the Center for Continuing Study of the California Economy in Palo Alto.
California Representatives arrested at Sudan Embassy. Representative Barbara Lee of Oakland was among seven members of Congress who were arrested in May when they blocked the front entrance at the Embassy of Sudan in Washington, D.C. The arrests occurred during a protest and civil disobedience was designed to embarrass the Sudan's military dictatorship for its ongoing genocide in the troubled Darfur region and to build public support for a United Nations peacekeeping mission there. "The world stood by when nearly one million people died in Rwanda," Lee, a Democrat, said before her arrest by Secret Service agents. "The most that our country unfortunately did was say 'I am sorry,' after the fact. Now, over 400,000 people have died as a result of the genocidal actions of the Khartoum government against the people of Darfur ... Not on our watch will we allow another genocide to take place." Lee and her colleagues urged President Bush to persuade the government of Sudan to release its 300,000-500,000 metric tons of grain reserves to feed the starving people of Darfur and to take immediate measures to restore security so that the refugees can return to their homes. This was the second recent protest and civil disobedience at the Sudanese Embassy involving the arrest of one of our Congressional Representatives. Representative Tom Lantos (D-San Mateo) was among five members of Congress arrested April 28 outside the embassy. Four other Democratic House members were among 11 protesters arrested on charges of disorderly conduct and unlawful assembly, a misdemeanor subject to a fine. Dozens of demonstrators attended the protest, and they cheered as the House members and others were led to a white police van by U.S. Secret Service uniformed officers. Lantos is of Hungarian descent and is currently serving his 13th term on the House of Representatives. He is the only holocaust survivor to ever serve in the U.S. Congress. Online Journalists win Apple Lawsuit. A state appeals court has rejected Apple Computer Inc.'s bid to identify the sources of leaked product information that appeared on Web sites, ruling that online reporters and bloggers are entitled to the same protections as traditional journalists. Apple had argued that the bloggers weren't acting as real journalists when they posted internal document about future Apple products. The court, however, disagreed. "In no relevant respect do they appear to differ from a reporter or editor for a traditional business-oriented periodical who solicits or otherwise comes into possession of confidential internal information about a company," Justice Conrad Rushing of the 6th District Court of Appeal wrote in a unanimous 69-page ruling. "We decline the implicit invitation to embroil ourselves in questions of what constitutes 'legitimate journalism," he wrote. "The shield law is intended to protect the gathering and dissemination of news, and that is what petitioners did here." The online journalists are thus entitled to the protections provided under California's shield law as well as the privacy protections for e-mails allowed under federal law, the court ruled. The Electronic Frontier Foundation called the ruling "a huge win". "Today's decision is a victory for the rights of journalists, whether online or offline, and for the public at large," said the group's staff attorney Kurt Opsahl, who argued the case before the appeals court last month. Rolling Stone Banned In China. San Francisco based Rolling Stone Magazine has been shut down in China after publishing just one issue of its Chinese edition. The magazine was apparently a bit too "edgy" for Chinese authorities who said they would not allow it to publish a second issue. The rock 'n' roll publication entered the Chinese market in March with a huge promotional effort that included billboard advertisements, a 125,000-copy roll-out and free Rolling Stone hats with each magazine- and Chinese readers bought nearly every copy of the inaugural edition. On the cover of this edition was Chinese Rock Star Cui Jian, who was associated with the Tiananmen Square protests and until recently was banned from performing in China. The magazine also featured Jay Chou, a pop star from Taiwan, Nigo, a Japanese hip hop artist and Muzimei, a Chinese blogger famous for her sex diary. In an opening editorial, Rolling Stone says: “Today we are sending out a call to our readers, let us join together in the East to create a legend that will be worthy of this age”. According to a report in the LA Times, the magazine's brash business strategy also contributed to it running afoul of authorities. Beijing has not issued licenses to foreign magazines for several years so many foreign magazines use an existing Chinese publication as a "shell" to help them enter the market. This common business practice is to make a arrangement with a local publication and then use this to gain government approval for the publication of foreign content. "They didn't go through the proper procedure," said Chen Li, director of the newspaper and magazine department of the Shanghai Press and Publishing Administration, where Rolling Stone was published, under the guise of an existing Chinese magazine. "There will be no future Rolling Stone content in this magazine. There's no such thing as 'Rolling Stone.' ". According to the Times report, China is extremely sensitive about issues related to media content and the use of foreign names, befitting a government that long considered the media a lapdog rather than a watchdog. Propagandists referred to media as the "throat and tongue" of the Communist Party. "Rolling Stone was quite tricky," said one executive in the industry who spoke to the Times on condition of anonymity, citing continuing dealings with regulators. "But they got nailed. The content was well beyond what the Propaganda Department could tolerate, aside from their not pretending to follow the rules." The local publishers: China Record Corporation, will continue to publish some toned down Rolling Stone content under the Chinese name "Audio Visual World". UC pays salary of former Los Alamos Lab Chief. The Director of the Los Alamos National Laboratory resigned last year but the University of California agreed to keep him on the payroll for more than two additional years so he will be able to qualify for the university's retirement plan, according to a copy of the director's separation agreement obtained by The San Francisco Chronicle. The university is paying the annual $235,000 salary of G. Peter Nanos - at a total cost of about $548,333 even though he is no longer at the University. In September 2007, when the former lab director will have accrued the five years of employment required to vest in UC's retirement plan his official employment with the University will end," according to the Chronicle report. The terms of Nanos' departure were negotiated last spring, while UC was preparing to bid for a new contract with the Department of Energy to continue running the atomic weapons complex it has run since World War II. UC's control of the lab was in jeopardy because of years of security lapses and allegations of fraud and mismanagement at Los Alamos. As part of the agreement, Nanos - an outspoken former Navy admiral who was appointed director in January 2003 and promptly vowed to "drain the swamp" at the lab - agreed not to say anything disparaging about the university or the lab. The Chronicle reported that the agreement calls Nanos' silence "a fundamental and substantial part of this agreement". Texas wine lovers fight for California. Once-forbidden acts in the alcoholic beverage trade are now commonplace in States like Texas where out-of state wineries ship their products; in-state liquor stores send overnight packages across county lines with not just wine, but hard stuff, too. By law, however,. non-Texas wine stores cannot ship their good to the State - a provision long supported by the state's powerful liquor sales lobby. According to a report in the Dallas Morning News, a trio of Texas wine lovers has now joined forces with online California merchants to challenge the ban, under the Constitution's interstate commerce clause and every adult Texan's "importation right". Ronald D. Parrish, a retired RadioShack executive who lives in Fort Worth, is one of the named plaintiffs in a federal lawsuit filed in Fort Worth against Texas Alcoholic Beverage Commission administrator Alan Steen. Mr. Parrish, who "knows just enough about wine to make a fool of myself in front of somebody who really knows wine," said he ran into the restriction when he recently tried to ship a birthday champagne bottle from an online California dealer to a friend across town. It's more than just sour grapes, he said, citing the Internet's broader product selection, availability and price competition. "I'm of age, and I live in a wet area, and I can purchase wine locally," Mr. Parrish said. "Why can't I purchase it from an out-of-state retailer if I choose to? I think it is discriminatory to Texas residents." The lawyers who filed the case include former U.S. Solicitor General Kenneth Starr, another attorney in his firm who owns a small winery and two Texas lawyers who successfully brought an earlier challenge on behalf of wineries. "The losers under the current law are Texas consumers, who have less wine available to them and pay more," said James Shannon, another attorney in Mr. Starr's firm. "Every state has middle men who want to protect their fat margins. The whole point of the commerce clause is to prevent that kind of economic protectionism."
Sun Microsystems to cut 5,000 jobs. Sun Microsystems has announced it will cut as many as 5,000 jobs, or 13 percent of its workforce, over the next six months. Since the end of the dot-com boom, Sun has suffered as the market has shifted to cheaper servers using Intel-compatible chips and the Linux operating system. The restructuring is the first big move by Chief Executive Jonathan Schwartz, who took over last month from Sun CEO and co-founder Scott McNealy. The company stock rose on the news and they announced that the layoffs should yield annual savings of between $480 million and $590 million, with the full impact expected in the fourth quarter of fiscal 2007. In addition to the job cuts, Sun will be selling its Newark, California campus and exiting leased facilities in Sunnyvale, California.
Intel to spend $1 billion to push Net in poor nations. Intel Corp. said it plans to spend $1 billion over five years to promote Internet use and computer training in developing countries. The program, which Intel has dubbed "World Ahead," aims to bring high-speed wireless Internet access to 1 billion people who can't now get online, while training 10 million teachers to use technology in education. "Decades of providing technology in growing volume and at decreasing costs have driven great gains for developing nations, communities and people worldwide, but there is still much to do," Intel Chief Executive Paul Otellini said in a statement. The program includes Intel's ongoing effort to promote cheap PCs that it hopes will find enthusiastic buyers among schools and villages in developing countries, where most people cannot afford to buy their own personal computers. It also extends Intel's push to popularize a new wireless technology called WiMax. WiMax's fast speed and long range has led many companies and industry groups to think it is ideal for poorer regions.
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 Letters to the Editor back
Message from the California-Taiwan Business Forum Dear Rob: I do like what you are doing. The newsletter is great. I hope we can work more closely so we can overcome all the politics (politicians) that are obstructing the good intention of us private citizens that are concern about the well being of everyone instead of individual. I think you know what I mean! Anyhow, maybe through your organization, our small voice here can be heard in Sacramento. I look forward to working with you. Please let me know if you need anything from us. Personal Regards, Executive Officer California-Taiwan Business Forum
Taiwan Friends of California Association Taipei, Taiwan
Thinks we are like Fox News! Hi Rob, Thanks for continuing to send the CIBR. Most of the information is very helpful. I'm a bit confused, however, as to why your report has articles about MS-13, the capture of 70 illegals and Al-Zawahiri? What do these have to do with California Business? Illegals detained in our state is a daily occurrence. Also, threats of gangs have never materialized to my knowledge. My point is we hope the CIBR is not losing its focus as a source of business information and being supplemented with biased political news. After all, that's what the Fox News Channel is for. Axxiom Business Consulting
USDOC Trade Events List Dear Rob Gordon, I am writing to you on behalf of the United States Department of Commerce with the link below to the Office of Global Trade Programs' Trade Events List. The Trade Events List is updated monthly and includes all trade promotion events produced by the International Trade Administration. The list is searchable, includes links to event descriptions, and contact information for local U.S. Export Assistance Centers. If any of our trade events listed are of interest to you, please contact the Project Officer noted below each trade event. If you have any additional questions or comments, please call Jesse Lapierre on my staff at 202/482-0299 or by e-mail at Jesse.Lapierre@mail.doc.gov. http://www.export.gov/comm_svc/tradeevents.html
We would like to hear from you. Please send us your ideas and opinions to caltrade@gmail.com | |
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Army Cancels Parsons Contract for Iraq Clinics A reconstruction contract for the building of 142 primary health centers across Iraq has been cancelled after spending the entire $200 million budget and with only about 20 clinics expected to be completed. The contract, awarded to Pasadena-based Parsons Inc. in the early days of reconstruction in Iraq, was to lay the foundation of a modern health care system for the country, but an audit by the Army Corps of Engineers found that in some cases they produced only "empty shells of crumbling concrete and shattered bricks cemented together into uneven walls". According to a report in the Washington Post, the cancellation came with little public warning, and the 86 percent shortfall of completions dismayed the World Health Organization's representative for Iraq. "That's not good. That's shocking," Naeema al-Gasseer said from Cairo. "We're not sending the right message here. That's affecting people's expectations and people's trust, I must say." By the end of 2006, the $18.4 billion that Washington has allocated for Iraq's reconstruction runs out. All remaining projects in the U.S. reconstruction program, including electricity, water, sewer, health care and the justice system, are due for completion. As a result, the next nine months are crunch time for the easy-term contracts that were awarded to American contractors early on, before surging violence drove up security costs and idled workers. Early in the occupation, U.S. officials mapped out the construction of 300 primary-care clinics, said Gasseer, the WHO official. In addition to spreading basic health care beyond the major cities into small towns, the clinics were meant to provide training for Iraq's medical professionals. "Overall, they were considered vital," she said. In April 2004, the project was awarded to Parsons Inc., a leading construction firm in domestic and international markets. In total, Parsons has been awarded about $1 billion in reconstruction projects in Iraq according to Brig. Gen. William McCoy, the Army Corps commander overseeing reconstruction in Iraq. Starting in 2004, the need for security sent costs soaring. Insurgent attacks forced companies to organize mini-militias to guard employees and sites; work often was idled when sites were judged to be too dangerous. Western contractors often were reduced to monitoring work sites by photographs, Parsons officials said. "Security degenerated from the beginning. The expectations on the part of Parsons and the U.S. government was we would have a very benign construction environment, like building a clinic in Falls Church," said Earnest Robbins, senior vice president for the international division of Parsons in Fairfax, Va. Difficulty choosing sites for the clinics also delayed work, Robbins said. Faced with a growing insurgency, U.S. authorities in 2004 took funding away from many projects to put it into building up Iraqi security forces. "During that period, very little actual project work, dirt-turning, was being done," Bowen said. At the same time, "we were paying large overhead for contractors to remain in-country." Overhead has consumed 40 percent to 50 percent of the clinic project's budget, McCoy said. In 2005, plans were scaled back to build 142 primary clinics by December of that year, an extended deadline. By December, however, only four had been completed, reconstruction officials said. Two more were finished weeks later. With the money almost all gone, the Corps of Engineers and Parsons reached what both sides described as a negotiated settlement under which Parsons would try to finish 14 more clinics by early April and then leave the project. The agreement stipulated that the contract was terminated by consensus, not for cause, the Corps and Parsons said. Both said the Corps had wanted to cancel the contract outright, and McCoy rejected the reasons that Parsons put forward for the slow progress. "In the time they completed 45 projects, I completed 500 projects," he said. Parsons has a number of other contracts in Baghdad, from oil-facility upgrades to border forts to prisons. "The fact is it is hard, but there are companies over here that are doing it."
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California Enterprise Zones not working, Report Says. An economic policy think tank has issued a report asserting that the state's enterprise zone program offers too many tax breaks to businesses while doing little to help the economy. The California Budget Project, an independent analysis group in Sacramento, said the amount of revenue being lost by the state under the program grew to $299.3 million in 2003 -- up from just $15.6 million in 1993. Overall, the program has doled out $1.5 billion in tax breaks since it was created in the mid-1980s, according to a report titled ``California's Enterprise Zones Miss The Mark.'' Enterprise zones were started in California in 1984. The plan was to create special districts in economically distressed areas that would offer tax breaks and incentives to businesses to encourage them to relocate to these struggling areas. The incentives include tax credits for hiring certain employees who qualify, tax credits for buying some kinds of equipment, and several other favorable tax treatment options. According to a report in Mercury News, the Budget Project called on the state agency that administers the program and the Legislature to sharply reduce the number of enterprise zones - currently 42 - and more carefully target benefits so that only the most economically distressed areas are eligible. The zones aren't sufficiently targeted, with one in eight California employees working in an enterprise zone, the think tank said. "The program should be substantially reduced in size,'' said Jean Ross, executive director of the Budget Project. `"The cost of the program has skyrocketed, yet the effectiveness of the tax breaks is tenuous, at best, and companies claim tax breaks without demonstrating that they create new jobs". Among the Report's conclusions are several practices that seem to abuse the purpose of the program. For example, Ross noted that in the case of the tax credit for hiring, companies could get rewarded for hiring some employees even while firing others. As a result, it would be to a company's advantage to increase `"churn'' so it could gain a tax advantage. The full report can be found at this link: http://www.cbp.org/2006/0604_ezreport.pdf Southern California Trade Going up but Capacity Problems Remain. Southern California's international trade sector should produce another record year in 2006 but complications persist according to a report released by the Los Angeles County Economic Development Corp. The number of containers processed at the Los Angeles/Long Beach port complex is expected to increase this year by 10.2 percent, to 15.6 million units. While the report notes the huge imbalance with all major trade partners, the LAEDC tends to emphasize the value of "two-way trade" and limits distinctions between imports and exports. They report that total value of two-way trade moving through the Los Angeles Customs District should grow 11 percent, to $326.1 billion. "This is a sector that has been zipping right along, but now we're dealing with a set of complications," said Jack Kyser, the business development group's chief economist in a newspaper interview. One is the environmental issues stemming from the heavy use of diesel fuel aboard ships, in trucks hauling product to and from the ports and railroad locomotives. While cargo generally moves easily within the port, once outside the facilities it can get held up on roadways and rail lines that are at or near capacity. Other areas of concern are port security, port truck driver unrest about a program that requires nighttime work and cargo being diverted to other facilities over concern about congestion. The report also stressed the importance of infrastructure improvements including the proposed bond issue that could include as much as $18 billion for transportation, including up to $6 billion for international trade, Bill Allen, the LAEDC's president and chief executive officer. "I think it is absolutely essential that we address these infrastructure issues as quickly as possible. The growth in trade is accelerating and we have to develop the capacity to handle the increased growth efficiently". The full report can be found at this link: http://www.laedc.org/reports/Trade-2006.pdf Tourism is Southern California's biggest Export. Tourism has emerged as Southern California's biggest "export" industry, according to a report released by the Los Angeles Economic Development Corp. The report revealed that the marketing of Southern California attractions outside the five-county region generated an average of 512,600 Southland jobs last year. "Direct international trade came in second place with an average of 450,100 jobs, while technology was third with an average of of 361,400 jobs in 2005," said Jack Kyser, the LAEDC's senior vice president and chief economist. Business and professional services and film and TV production followed, generating 251,800 jobs and 251,600 jobs respectively, the study said. Southern California's climate, beaches and Hollywood movie industry have long been big draws for the region, but Kyser said the San Gabriel Valley has plenty of tourist attractions of its own. "The San Gabriel Valley scores well with things like the Norton Simon Museum and the Huntington Library," he said. "But we've also highlighted an export industry that's often overlooked - higher education. Locally, you've got places like Caltech and the Art Center College of Design. And a lot of times the students who graduate will decide to stay here and enrich our local economy". Broken out separately, Los Angeles County's No. 1 export for 2005 was international trade (an average of 290,300 jobs), followed by tourism (263,500 jobs), motion picture and TV production (241,100 jobs), technology (207,300 jobs) and business and professional services (165,100 jobs). "It's not surprising that international trade would be No. 1 in L.A. County because we've got the two ports and Los Angeles International Airport, which handles a lot of freight," Kyser said. "It tends to mostly be smaller, high-value goods like medical equipment and electronic components." In the Inland Empire, tourism ranked No. 1 last year, thanks in part to the combination of the Coachella Valley and Indian gaming. Last year tourism in the two-county region generated an average of 97,100 jobs, followed by wholesale trade/logistics (45,800 jobs), health services/bio-medicine (36,200 jobs), agriculture/food products manufacturing (28,100 jobs) and technology (22,700 jobs). The full report can be found at this link: http://www.laedc.org/newsroom/releases/2006/041206.pdf California Space Authority wins Innovation Grant. The California Space Authority has been selected to be the lead on a US Department of Labor Workforce Innovation in Regional Economic Development (WIRED) grant. The project is intended to promote entrepreneurship, develop innovation-oriented talent and support industrial competitiveness throughout a 13-county region from San Diego to Alameda dubbed the "California Innovation Corridor." The CSA innovation corridor project was one of 13 regional proposals nationwide to be awarded a $15 million Federal Grant. In winning this grant, the California Space Authority emphasized "Staggering manufacturing job losses" in the area: 438,500 since 1990 and noted that many of the jobs that have been retained are still at risk due to globalization. New California Business Forum Started in Mongolia. Lt. Gov. Cruz Bustamante has signed an agreement to establish a public-private partnership to promote trade between California and Mongolia. The partnership will be known as the California-Mongolia Business Forum-Ulaanbaatar. California exported $12.3 million in goods, services and agricultural commodities to Mongolia during the last five years, according to the U.S. Dept. of Commerce. Two California firms will receive assistance from the Business Forum as they conduct a feasibility study and develop a contract with the Mongolian government to build a hospital in Ulaanbaatar and equip it with state-of-the-art technology. The companies are TTE International Development Corp. of Santa Maria and Oscar Larson & Associates Consulting Engineers and Land Surveyors Inc. of Eureka. The Steppe Link Association, a non-profit organization financed by businesses in Mongolia, will manage the partnership and assist business people in California and the host country. While California no longer has a Trade Office Program, the Lt. Governor has been active in establishing "California Business Forums" throughout the world and has has signed agreements for seven such forums in Beijing, Hong Kong, Taiwan, Mexico City, Tijuana, and Perth Australia. Gavilan College Will Fight for SBDC Funding. Gavilan College in Santa Clara County, plans to fight a federal decision to stop funding the Small Business Development Center according to a report in Hollister Free Lance. President Steve Kinsella recently learned the school would not have its contract renewed to administer an $80,000 federal grant for the Gavilan College Small Business Development Center, a program the college has operated for 18 years. The notice - issued by the parent SBDC at the University of California, Merced - means the school also will lose a matching $140,000 economic development grant from the state. The program will continue to operate with some federal funding, but will no longer be connected to the community college. Kinsella has called charges of fiscal mismanagement at the school "unsubstantiated". The decision to search for a new host agency comes after a long dispute between Gavilan and U.C. Merced officials over the community college's accounting practices. Federal officials in charge of small business grants are blaming Gavilan College for mishandling SBDC funds and hurting the effectiveness of the program. A Federal auditor had visited the school and declared its ledgers "un-auditable". The school had also only served a third of the 990 people set as its target. "None of that can be chalked up to lack of interest," said Chris Rosander, director of the SBDC at U.C. Merced, "Most small business centers get close to the milestones or exceed them". The regional center at Merced is one of six lead agencies in California that doles out hundreds of thousands of dollars each year from the federal Small Business Administration. Those monies were administered by the California Trade and Commerce Agency for more than a decade, until the state dissolved the agency in 2003. UC San Diego, UC Irvine Get UK Grant. UC San Diego and UC Irvine have received a $2.6M grant from a UK-based business accelerator, the universities reported yesterday. UCSD and UCI have received a grant from the UK Department of Trade and Industry, as part of SETsquared, a UK-based business accelerator program. The grant is part of a program to seed collaboration between technology clusters in the US and the UK, and funds research projects in areas such as life sciences, new materials, stem cells, and tissue engineering. The project includes collaboration with universities in Bath, Bristol, Southampton and Surrey. The UK Department of Trade and Industry is active in Southern California promoting investments and collaboration between UK-based technology firms and Southern California's high tech companies. Water technology incubator announced for Central Valley. California State University, Fresno and the Central Valley Business Incubator announced that they will develop a $5 million water and clean energy technology incubator in Fresno. The incubator will house research and design laboratories and testing and certification equipment, through a collaborative partnership with Fresno State’s International Center for Water Technology (ICWT). It will also house offices for water- and energy-focused entrepreneurs and for staff helping innovators’ ideas become job-generating reality. The 13,000 square-foot building is expected to be occupied by the end of the year. “This facility will be another step to advance the transformation of our regional economy,” says John Welty, president of Fresno State, in a written statement. “It is a great example of a public-private partnership that will make a difference in our future.” Fresno State’s concept of focusing on water technology grew out of a report in 2000 that recommended forming industry clusters to work together toward the greater economic good. Water technology, one of the recommended clusters, led to development by Fresno State and industry of the International Center for Water Technology. Claude Laval, CVBI chairman and a water technology industry executive instrumental in cultivating the new incubator from idea to reality, says the region will benefit greatly from the effort. “Since our first meeting in April 2001, we have accomplished an amazing amount through collaborative effort and we have drawn attention to the San Joaquin Valley as the focal point of this growing global industry”. Hollywood leading source of jobs and revenue. A study by the Los Angeles Economic Development Corp has shown that Hollywood is a leading source of jobs and revenue for Southern California and a major influence on other top export industries. The study reports that motion picture and television production accounts for an estimated 251,600 jobs in the greater Los Angeles area, making it the fifth-largest export industry in the region. Hollywood ranks just behind business and professional services and, in terms of jobs-per-industry, below technology, direct international trade and the largest export industry -- tourism -- with an estimated average annual employment of 512,600 jobs last year. "What drives a lot of our tourists to California is the motion picture industry, which also has a huge impact on our apparel industry as well as furniture, manufacturing and even jewelry," LAEDC chief economist Jack Kyser said. The report also showed that the film and TV industry continues to be located primarily in Los Angeles County, where it was the third-ranking industry with about 241,100 jobs. Hollywood's work force faces mounting challenges from declining boxoffice, slower DVD growth, runaway production and union militancy, according to an annual forecast issued by the LAEDC in November. The full report can be found at this link: http://www.laedc.org/reports/Film-2005.pdf SF hires consulting firm to form economic development strategy. ICF Consulting has announced that it is assisting the City of San Francisco, California, in creating the City's first economic development strategy. The focus will be on identifying and developing industries that have the potential to establish good jobs that align with the education and skills of San Francisco's residents. "ICF Consulting's national and global expertise in economic development strategy makes this firm well suited to handle the challenge of San Francisco's first official economic development strategy," said Jesse Blout, Director of the Mayor's Office of Economic and Workforce Development. "The City is excited about working with ICF Consulting and its team to build a globally competitive San Francisco economy that can generate prosperity for all of its residents." Development of the plan comes as the city recovers from the boom and bust of the technology market during the dot-com era. In 2004, San Francisco's residents voted to approve Proposition I, which authorized the creation of this economic development strategy. ICF Consulting's plan will not only guide and coordinate economic development efforts across the city government, but will provide a framework for the newly-created Office of Economic Analysis, which will conduct economic impact analysis on new legislation coming before the City's Board of Supervisors. "San Francisco has an impressive array of economic strengths on which to build," said Dr. Ted Egan, an ICF Consulting economist who is leading the effort. "Our challenge is to work with the community and craft a strategy that can shape the City's future in a way all San Franciscans can support." More information on this strategy can be found at this link: http://www.sfeconomicstrategy.org/
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Hewlett-Packard will close 79 data centers, Profits up. Hewlett-Packard, the personal computer and printer maker, has announced that it will close 79 data centers worldwide as part of a plan to save $1 billion. Six existing data centers outside of California will be made into larger offices to handle Hewlett-Packard's storehouse of information, such as e-mails and records of business transactions, according to a report in Bloomberg News. Any job reductions in the move would be part of the company plan announced in July to cut the total work force by 15,300, said a spokesman. The company said it was already halfway through that process, helping the company post a 51 percent jump in profit. Hewlett-Packard's net profit for the second quarter rose to $1.46 billion from $966 million a year earlier and revenue rose 5 percent to $22.6 billion. Hewlett-Packard's earnings are largely driven by the performance of its printing unit, where revenue grew 5 percent in the latest quarter, to $6.7 billion. The printing business provided about $1 billion in operating profit, up 23 percent from the year-earlier period. The data centers would be closed in the next three to four years, the spokesman said. The company would add more automated equipment when it expanded six centers in Atlanta, Houston and Austin, Texas.
Amgen to open office in Dubai biotechnology park. Southern California biotechnology company Amgen has announced it will open its Mideast headquarters in a Dubai free trade zone developed to lure biotechnology research and development firms. Amgen says the office will focus on selling cancer and arthritis drugs to an estimated 300-thousand patients throughout the Middle East and Africa. Amgen vice president Ugo Di Francesco says the Thousand Oaks-based company could move some of its research and development work to Dubai in the future. Its chief labs are in the United States, Britain and Germany. Di Francesco says Amgen was attracted to Dubai's business-friendly setting, with intellectual property protection and no taxes or restrictions on foreign ownership, expatriate employees or sending profits outside the country. Amgen is the world's largest biotech company with revenue of over twelve billion dollars last year.
Computer Sciences Corporation will axe 5000 employees. Computer Sciences Corp., of El Segundo, has announced that it is exploring a potential sale of the computer services company and will cut 5,000 jobs as part of a restructuring plan to save $450 million. Its restructuring program, aimed at improving cash flow and earnings, involves work force reductions of about 4,300 employees during fiscal 2007, which began April 1, and about 700 employees in fiscal 2008. It said a majority of the cuts will occur in Europe. Excluding pretax restructuring charges of about $345 million in fiscal 2007 and $30 million in fiscal 2008, the restructuring plan will result in pretax savings of $150 million in fiscal 2007 and $300 million in fiscal 2008, CSC said. "For some time it has been apparent to us, and to other companies in our industry, that there is excess capacity in certain geographies, particularly Europe," CSC Chairman and Chief Executive Officer Van B. Honeycutt said in a statement. "After lengthy consideration, we have decided that this is an appropriate time to deal with the issue through a restructuring," he said. "This action is designed to enhance shareholder value regardless of any strategic alternatives we may explore." Ameriquest laying off 3,800 workers. California's ACC Capital Holdings Corp., owner of Ameriquest Mortgage Co., is dismissing 3,800 workers and closing 229 branches. Closely held ACC said the job cuts at its Ameriquest and Town & Country Credit mortgage lending units will shrink its total work force by about a third as rising interest rates and a weakening real estate market hit lenders. Ameriquest is the No. 1 U.S. subprime mortgage lender, according to trade journal Inside Mortgage Finance. E-Trade to close its call center: 500 jobs will be relocated, Online brokerage giant E-Trade Financial Corp. will close its Rancho Cordova operations at the end of August, relocating some 500 jobs, mostly call center positions. A Company spokeswoman said the jobs will be spread among six other E-Trade call centers around the United States, including those formerly operated by brokerages BrownCo. and Harrisdirect, both of which E-Trade acquired last year for a combined $2.3 billion. E-Trade officials said they weighed numerous factors before making the decision to relocate, but declined to state their exact reasons for leaving California. "It's about the acquisitions and efficiency and consolidations" the company spokeswoman said. New York-based E-Trade was founded in 1982 and opened its Rancho Cordova operations a decade ago as a data storage center and a call center. It grew from 50 employees to more than 500, including accounting specialists, software experts and licensed securities brokers.
Apple wins Beatles Lawsuit. Apple Computer Inc. will be able to use the apple logo on its iTunes Music Store, a judge in London has ruled, rejecting a suit filed by Apple Corps Ltd., the guardian of The Beatles' commercial interests. Judge Anthony Mann of Britain's High Court ruled that Apple Computer used the fruit logo in association with the store, not the music, and thus did not breach the agreement. "I conclude that the use of the apple logo ... does not suggest a relevant connection with the creative work," Mann said in his written judgment. "I think that the use of the apple logo is a fair and reasonable use of the mark in connection with the service, which does not go further and unfairly or unreasonably suggest an additional association with the creative works themselves." Apple Computer has sold more than 1 billion songs through the iTunes Music Store, which is available throughout Europe as well as in the United States, Canada, Australia and Japan, but because of the dispute it has no Beatles songs listed. Apple Corps was started by the Beatles in 1968 and is still owned by Paul McCartney, Ringo Starr, the widow of John Lennon and the estate of George Harrison. Apple Corps still claims that the computer company had broken a 1991 agreement in which each side agreed not to enter into the other's field of business, said has said it would appeal the ruling.
Disney Family to buy old General Dynamics Plant. A partnership that includes the investment arm of the Roy E. Disney family and focuses on job-generating projects has bought a former aerospace facility in Pomona that it will convert into an industrial park. The Genesis Real Estate Fund II, managed by Burbank-based Shamrock Capital Advisors, and Seventh Street Development acquired 20.6 acres of land that includes a shuttered plant formerly occupied by General Dynamics. The partnership plans to turn the site into a 380,000-square-foot industrial park called Mission-71 Business Park. It is adjacent to the Corona Expressway at Mission Boulevard and will include a freeway ramp. The Genesis fund is contributing $8.5 million to the project. The Pomona site is already titled and has been subdivided into 22 parcels. Genesis' investment will finance the acquisition of the site and the development of 19 buildings. They will range in size from 13,000 to 70,000 square feet with development occurring in two phases over the next 30 months. They will then be sold to owners needing warehouse space or a light manufacturing facility. This partnership will mark the second project Genesis has done with Long Beach-based Seventh Street Development and its fourth project with Seventh Street principals Craig Furniss and Doug Hinchliffe. This Genesis fund totals $104 million and provides developers with financing packages that typically range from $10 million to $80 million. Shamrock focuses its investments in low- to moderate- income neighborhoods in Los Angeles, Kern, Riverside, San Bernardino, Ventura, Santa Barbara, Orange, San Diego and Imperial counties. The initial Genesis Fund, credited as the first investment vehicle of its kind in the United States, has helped develop more than $250 million in retail, industrial, mixed-use and creative office development and was responsible for the creation and/or retention of an estimated 5,000 jobs in Southern California, the company said. Shamrock Capital Advisors is an affiliate of Burbank-based Shamrock Holdings of California, Inc., the investment arm of the Roy E. Disney family. Universal Music settles payola probe for $12 million. Universal Music Group Recordings Inc., the world's largest record company, has agreed to pay $12 million to settle a payola case that claimed the company provided vacations, electronics and other bribes to increase radio play for their artists, New York Attorney General Eliot Spitzer announced. The Santa Monica, Calif.-based company agreed to pay the cash to charity along with $100,000 to cover the cost of the investigation and to adopt reforms, Spitzer said. The company didn't admit guilt, but acknowledged "various employees and independent promoters acting on behalf of the company" engaged in the illegal practice, Spitzer said. The bribes and gifts were used to gain airplay for songs that included records by Nick Lachey, Ashlee Simpson, Brian McKnight, Big Tymers, and Lindsay Lohan, Spitzer said. "UMG has illegally provided radio stations with financial benefits to obtain airplay and boost the chart position of its songs," Spitzer said in papers filed in state Supreme Court along with the settlement. "UMG has obtained airplay for its songs through such deceptive and illegal practices as bribing radio station employees, on occasion, to play UMG songs, providing a stream of financial benefits to radio stations, to assist with stations' overhead costs or to provide promotional support, on condition that UMG records receive airplay," Spitzer stated. UMG was also accused of "engaging in fraudulent call-in campaigns to increase airplay." Spitzer said UMG used interns and employees and "outside vendors" to pose as listeners requesting UMG songs. "We have been working cooperatively with the attorney general's office in resolving these promotion issues and are pleased to have completed the process with this agreement," UMG said in a statement. "The reforms that we have agreed to with the attorney general are consistent with the policies that we voluntarily implemented over a year ago."
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U.S. Director of Foreign Assistance and U.S. Agency for International Development (USAID) Administrator Randall L. Tobias announced the appointment of UCLA Economics Professor Arnold Harberger as Chief Economic Advisor to USAID. This position has been unfilled since the mid- 1990s and Professor Harberger has agreed to fill the role as a contractor. His duties will be outreach to U.S. Government and the U.S. public on the critical role of economic growth in development. Professor Harberger received his Ph.D. degree at the University of Chicago. Afterwards, he spent 38 years with the faculty of economics there, most recently as the Gustavus F. and Ann M. Swift Distinguished Service Professor Emeritus since 1991. He has been Professor of Economics at the University of California Los Angeles since 1984. Other academic positions included visiting professorships at Harvard, Princeton, and the University of Paris, as well as the MIT Center for International Studies in New Delhi and the Institute for the Economy in Transition in Moscow. Professor Harberger has served as a consultant to sixteen foreign governments, nine U.S. government agencies (including USAID), eight international agencies and foundations (including the International Monetary Fund, the World Bank, the Asian Development Bank, and the Organization of American States). Numbered among his students at the University of Chicago and the University of California Los Angeles are more than a dozen central bank presidents and two dozen foreign government ministers.
Former Yahoo! developer, John Robison, has been appointed Senior Vice President of Engineering at travel search engine, SideStep, responsible for managing its engineering team and driving the company's technology strategy. Mr. Robison's appointment adds more than 15 years of extensive Internet-based engineering and management experience to SideStep's executive roster. Prior to joining SideStep, Mr. Robison spent 10 years at Yahoo! managing the development of some of the world's largest Internet platforms, including My Yahoo!. Most recently, Mr. Robison served as Vice President and General Manager of Premium Services Infrastructure, playing an integral role in the development and support of Yahoo!'s technology and business infrastructure. Mr. Robison said, ''SideStep, as the founder of online travel search, has built a strong foundation and vision that sets it apart from other online travel web sites. "I'm thrilled to join a company that has the management bench strength and strategic vision to revolutionize the category.'' SideStep is designed to be a traveler's search engine and has forged alliances with leading travel brands such as Hilton Hotels Corporation, Marriott International, Continental Airlines, JetBlue, Dollar Rent A Car and Enterprise Rent-A-Car. Headquartered in Santa Clara, California, SideStep is privately held and has raised more than $17 million in funding from Trident Capital and individual investors.
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With great fanfare, the California Department of Business Transportation and Housing has announced the launching of a new California Business Portal. In their press release they said, ""The site is a one-stop shop for businesses to access information and resources for starting, growing, financing, expanding or relocating a business to California".
It took them three years to come up with this website and I found it to be somewhat uninspiring- mostly just a collections of links- One of the PowerPoint presentations I looked at even seemed to contain draft material. Decide for yourself- it is at this link: http://www.calbusiness.ca.gov/. This Department also has an initiative for something called the California Economic Development Partnership but we haven't been able to learn much about it or if there is any way for mere mortals to participate. Since this Department seems to have a penchant for closed door meetings we spoke with a senior administrator at another major State agency involved in economic development. Incredibly, they too were left out of this department's initial plans for an interagency partnership and we asked how this could be possible. "They don't have any real programs", this source told us, "so about every six months they dummy something up to make it look like they are doing something". Maybe someone in the State Legislature will know what is going on? We called Laura Metune in the office of State Senator Fegueroa and she said a few bills passed and were now being considered by joint legislative committees. BTH still has no legal mandate to develop international business programs but Assembly bill AB2601 has passed the assembly and is being forwarded to the Senate for consideration. It stipulates that the Department of Business, Transportation and Housing "shall be the primary state agency responsible for domestic and international trade and investment activities in the state, subject to specified conditions. It would require the secretary to develop an international trade and investment policy, complete a study on the potential role of the state in global markets, and develop an international trade and investment strategy for the state, subject to specified requirements. It would require the secretary to convene or join a statewide business partnership for international trade and investment to advise on business needs and priorities in that regard"
The Senate, however, wants to study the issue a bit more before they give BTH this blank check. Their bill SB1513 says only that, "The Secretary of Business, Transportation and Housing shall study the feasibility and desirability of establishing permanent international trade and investment programs within state government". Perhaps the Senate is right. BTH has proved itself to be a big, unresponsive bureaucracy- maybe they should just got back to being the "Transportation and Housing" agency- a huge mandate in its own right. It seems to me it would be much more logical for the California Secretary of State to take on this role. After all, they already manage the State Corporation registry, and a simple foreign relations program- plus their California Business Portal is actually quite good. Has anyone even considered this?
As long as we are talking about State international programs here, it is probably time to mention the Calfornia Center's for International Trade Development (CCITD)- somebody has to do it and for too long they have gotten a free pass. This program is run by the California Community Colleges and they operate a network of 14 international trade assistance centers throughout California. So what's wrong with that? In theory, nothing- in fact on paper it looks like a great program- and this has allowed them to be very effective in getting Federal funding. Unfortunately, the problem with the CCITDs is not with the concept, it is with the people- they simply stay there too long. It is probably just human nature that people in government bureaucracies tend to lose their effectiveness after three or four years, and after about five they often become completely useless. After about 10 they sometimes become completely corrupt- maybe without even realizing it. Here is San Diego, their former Director was running multi-level marketing scams out of their office. So shocked was his own secretary that she called me covertly and paid me a backhanded compliment, "Rob, you are much too honest to be working with these people". Long term employees of government agencies often see their primary role of justifying their own positions- i.e. they "institutionalize" themselves, and this seems to have happened at the CCITDs. After they joined Governor's Schwarzenegger's trade mission to China, and received profuse praise from the Governor- Jeff Williamson announced that a new role of the CCITDs would be "participation in high profile trade missions". Well of course, why wouldn't they? Everybody loves a junket. In my opinion, however, someone should clean house in this organization- it really could be a great resource for the State but they desperately need some new blood.
Whoops, I did it again - Part 3. Only a few days after University President Robert Dynes stood before a state Senate legislative hearing and gave a solemn oath that he would not to grant further exceptions to University compensation policy, he went ahead and authorized a whopping $832,500 subsidized loan for one of his top aides. Linda Williams, an Administrative Assistant to Dynes is paid $177,870 in salary, but that is apparently not enough to make ends meet. She was granted this exception to UC policies so that she could join a low-interest loan program usually limited to senior executives and faculty members and borrowed the $832,500 through the program. That's not even the worst thing they have been caught at recently in this never-ending scandal. As reported in the San Francisco Chronicle, when G. Peter Nanos, the Director of the Los Alamos National Laboratory resigned last year, the University of California agreed to keep him on the payroll in his new job for up to 28 months so he would qualify for the university's retirement plan. There was a catch though- he has to keep his mouth shut. It seems that Mr. Nanos had been highly critical of the security policies at the Lab, and they were in the middle of a bid for a new contract with the Department of Energy to continue running the atomic weapons complex it has run since World War II. The university is now paying the annual $235,000 salary of G. Peter Nanos even though he is now at a job with the Defense Department's Defense Threat Reduction Agency in Virginia. The mafia has a name for this- it is called hush money. The UC must be laughing at all the poor saps who try to eek out a living in the business world, because let's face it- if you want a really sweet deal get a job with the University of California, especially in the Chancellor's office- it will likely be FAR more lucrative.
The recent Democratic primary contest had us looking high and low for any discussion about business- especially small business. Since until just recently Governor Schwarzenegger hasn't shown the slightest interest in small business, we thought this could be a golden opportunity for the Democratic Party, because there is a big difference between being "pro-business" and being "pro-corporation" that Republicans just don't seem to understand. Unfortunately, the Democrats seem to have dropped the ball. Except for Angelides comment that "California can never win a race to the bottom" - which is true, the entire campaign was almost entirely devoid of business discussions. What in the world are they thinking? That we are all Government employees or Union members with fat pensions and benefits up the yin yang! Now, Governor Schwarzenegger has belately started talking about small business. Mostly just symbolic things like declaring "small business week" but he has also issued an executive order decreeing that twenty five percent of all state contracts will go to small business. We hope this is sincere, and not just election year pandering, because small businesses need all the help they can get. Even this small step may be a challenge though- the State bureaucracy doesn't understand small business needs at all, and sometmes they are not just indifferent to small business, they are often overtly hostile. The aforemented CITDs, for example, have a bid process that is totally internal- they issue RFPs to themselves and their associates- and what happens if they lose? Why nothing of course, they just keep doing their jobs as usual. It would be really nice if the Governor could change this culture in the State bureaucracy but it is deeply entrenched and will likely be a great challenge.
Once again we find ourselves with too many candidates for this issue's lame award- the notorious distinction we give each issue for extreme dishonesty, corruption or incompetence in California. Sometimes this award is funny, sometimes it is sad, but this time it is tragic. Pasadena-based Parsons Corporation was awarded a $200 million contract to build 142 primary health care clinics in war ravaged Iraq. After completing just 12 hospitals the Army was forced to cancel the contract. A subsequent audit laid most of the blame on the Army Corps of Engineers for "lax oversight" but Brig. Gen. William McCoy, the Army Corps commander overseeing reconstruction in Iraq disagreed, "The fact is it is hard, but there are companies over here that are doing it" he said. We have no doubt that there is plenty of blame to go around- and that Parsons was working in an extremely difficult
environment- but they are doing nearly a billion dollars of work in Iraq, and it is the responsibility of private contractors to "find a way" - not just take the money and run. The people of Iraq needed those clinics- now more than ever. Therefore, Parsons Corporation, it is our sad duty to award you the CIBR Lame award, for disservice to your State and Country below and beneath the call of duty.
Let's move on to something positive- namely the not clueless award - it is the polar opposite of the lame award and is given to the person or organization that has the most positive impact on our society. As you may have heard, Apple Corporation tried to claim that bloggers weren't real journalists and didn't have the same rights to protect their sources as the mainstream media. Apple wanted the courts to force a blogger to identify who had leaked some trade secrets that had been posted on a website and tried to force them to turn over not just their internal sources but also all their email. Justice Conrad Rushing and the 6th District Court of Appeal, however unanimously disagreed. He said of bloggers "In no relevant respect do they appear to differ from a reporter or editor for a traditional business-oriented periodical who solicits or otherwise comes into possession of confidential internal information about a company". Good move Justice Rushing! We are not sure if you are one of those "activist judges" or not but this was an important ruling. Therefore, it is our honor to give you and your colleagues on the 6th district court of appeals the coveted CIBR not clueless award, for service to your State and country above and beyond the call of duty.
Suddenly, the U.S. Constitutions seems very important again. Younger people often don't realize that once they take away a right, they never give it back. This might be a good time to remember that the First Amendment to the Constitution that guarantees freedom of the press was not meant to protect just mainstream media- there was no Fox News or Clear Channel Communications back then. The amendment was written to protect small pampleteers. Guys like Thomas Paine, who's acid pen launched revolutions in two different countries - the United States and France, but who died drunk and destitute and abandoned by his friends. Let's hope the author of this little newletter experiences a different fate. Till next time.
RG
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State Training Grant Funding Available. A new non-profit organization "Global Economic & Workforce Development Coalition" has established a service to help California firms secure State funded grants for employee training and workforce development programs. These services help member organizations to improve their profitability, productivity, effectiveness and efficiency while reducing operating costs. Several million dollars in grant funding is available for qualifying organizations. GEWDC also has online educational programs with over 14,000 hours of educational content available. Some of this funding must be used before the end of the fiscal year. For program details, contact William Prouty, PhD at 951-301-0605 or visit http://www.gewdc.org
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June 14: San Pedro, 19th Annual Seafood Feast. Hosted by International Longshore and Warehouse Union and the Propeller Club of Los Angeles-Long Beach. Over 1300 attended last year and had a great time!! We are pleased to once again present to the Southern California Maritime community and opportunity to mix and mingle with members of the International Longshore and Warehouse Union and the Propeller Club of the United States, Port of Los Angeles-Long Beach. Time: 5:30 PM to 7:30 PM, Cost: $40.00 AFTER JUNE 2ND $ 50.00. Download reservation form at www.propellerclublalb.org
June 16: San Francisco, Third Annual BAWTC Global Logistics Conference- “Ideas from the Cutting Edge”. Sponsored by Wells Fargo HSBC Trade Bank. 8:30AM -12:30PM. Speakers: Barry R. Sedlik Undersecretary Business, Transportation and Housing Agency, Port of Oakland, GAP, Sun Microsystems, Sun-Maid Growers, IBM, Burlington Northern Santa Fe Railroad, MOL, GSC Logistics, Dreisbach Logistics, FedEx, Sprint/Nextel, XORA, Oracle, IAS, Port of Oakland, Global 4PL. Register online: www.acteva.com/go/bawtcevents June 20: Long Beach, Is your Importer C-PAT Certified? Hosted By: Los Angeles Customs Brokers and Freight Forwarders Association. Do not miss this critical update on the latest issues on being C-TPAT certified. Time: 12:30 PM to 4:30 PM, Cost: Members $45.00 p.p. Non-Members and Walkins $65.00, Location: COAST LONG BEACH HOTEL, Event Info Link: www.lacbffa.org
June 25: Long Beach, Family Fishing Trip! Hosted By: Japan America Society of Southern California. This popular event is a fun, half-day fishing trip designed for beginner and casual anglers, and ALL FISHING EQUIPTMENT IS INCLUDED! We will fish for Yellowtail, Barracuda, Bass, Halibut and Mackerel. Our staff will help prepare your fishing pole and get you started fishing. Our fishing boat, “City of Long Beach,” holds up to 75 people and is designed for your comfort and safety. Time: 12:30 PM to 5:45 PM, Cost: $40 Adults / $35 Seniors (65+) / $25 Children (under 16), Location: g Beach Marina Sport Fishing - (At Seaport Village in Alamitos Bay). For More Information: http://www.jas-socal.org/jas/DesktopDefault.aspx?tabindex=2&tabid=3
June 28: Long Beach. Exporting Port Technologies to China. Hosted by The Long Beach International Trade Office. A conference to explore the opportunities available for California companies to sell their environmental equipment and technologies world-wide. The conference will have two panel discussions. Time: 9:00 PM to 2:00 AM, Cost: $75.00 per person $750 for a table, Location: Renaissance Hotel in Long Beach. Contact: Priscilla Lopez, Email: citd@lbcc.edu Phone: (562) 938-5018 June 29: Los Angeles, Customs Classification Seminar. Hosted by Women in International Trade. Speaker BRUCE LEEDS Senior Export/Import Advisor, The Boeing Company Topics include: Understanding tariff classification. How to classify goods under the U.S. Harmonized Tariff Schedule (HTSUS) Understanding internal controls. WHO SHOULD ATTEND? Importers Exporters Freight Forwarders Custom Brokers, Time: 1:30 PM to 5:00 PM, Cost: $40.00 members $50.00 non members, Location: THE WESTIN LOS ANGELES AIRPORT, For more information visit www.wit-la.org
July 14: Los Angeles, A Night Under the Stars at Hollywood Bowl. Hosted By: Women in International Trade- Los Angeles. Time: 8:30 PM to 11:30 PM, Cost: $ 30.00 MEMBERS AND GUESTS.
For more information visit www.wit-la.org
July 15: Simi Valley, 97th Anniversary and Gala Celebration, "Bridging the Skies Across the Pacific"
Hosted By: Japan America Society of Southern California. TOUR, THEN DINE UNDER THE WINGS OF AIR FORCE ONE as the Japan America Society honors the five companies that bring more Japanese and Americans together than any other group... the Japan and U.S. based airlines that bridge Japan and Southern California: ALL NIPPON AIRWAYS AMERICAN AIRLINES JAPAN AIRLINES NORTHWEST AIRLINES UNITED AIRLINES , 6:00pm Reception & Silent Auction 7:00pm Dinner Celebration The fun begins once you board one of our deluxe buses and “fly” to the dinner celebration! Deluxe Bus service is $25 (R/T per Passenger) with departures from Downtown Los Angeles, Orange County, Pasadena, South Bay and the Westside. For more information, please call (213) 627-6217, ext. 205Time: 6:00 PM to 9:00 PM, Cost: $10,000 - First Class Sponsor, $5,000 - Executive Class Sponsor, $3000 - Premium Coach Sponsor, $250 - Premium Coach Seat. Location: AIR FORCE ONE PAVILION - The Ronald Reagan Presidential Library and Museum Contact: JAS Staff, Email: info@jas-socal.org , Phone: (213) 627-6217
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Reading the Future By Peter Schrag Sacramento Bee Columnist, Reprinted with Permission Ever since Gray Davis' landslide victory in the 1998 race for governor (if anyone still remembers it), California has been dismissed as too liberal, too absorbed by its own insular concerns - gays, identity politics and environmentalism - too brown and Asian, too dominated by immigrants to remain the national trendsetter it was once supposed to be. Take the piece by Fred Barnes, executive editor of the conservative flagship The Weekly Standard, published in 2000. "By the late 1990s," he wrote, "California was more Democratic, more pro-President Clinton, and more pro-abortion than the rest of America. Its population was more Hispanic and Asian. Its business community was more culturally liberal." Barnes' piece was titled "Why California Doesn't Matter." Not long after, "Lexington," the U.S. column of The Economist magazine, called California the "Left Out Coast." Five years after his landslide, Davis was gone, victim of the first gubernatorial recall in California's history, and replaced by Republican Arnold Schwarzenegger. Meanwhile, the voters had passed one of the first laws in the country outlawing gay marriage. By 2004, they'd also rejected any loosening of the state's harsh three-strikes sentencing law, refused to lengthen legislative term limits and rejected an attempt to make it possible for the Legislature to enact budgets and raise taxes by less than a two-thirds majority. They also made clear their vehement opposition to driver's licenses for illegal immigrants and the so-called car tax, which they'd quietly paid for generations. What sort of liberalism was all that? But even if you disregard California's recent tilt to the Democrats, the state's demographics, its economy and its sheer size will almost inevitably continue to make it the nation's political and social laboratory. As of the 2000 Census, California became the first large U.S. state in which there was no ethnic majority. Within another generation, the state's burgeoning Latino population will be the largest minority. Eventually, barring the impact of the growing rate of inter-marriage or in the way people identify themselves, Hispanics will be an absolute majority. In a nation where many other states are following the same demographic path - Texas is now also a minority-majority state - and where a dozen other states are drawing large numbers of immigrants, California's ability to create a successful society and to assimilate and profit from the energies and global connections of its new population will be a crucial test for the nation. But given the state's dysfunctional government structures, its apparent uncertainty about what it wants and the great gaps between the older, whiter, more affluent people who vote and the younger, browner, poorer people most dependent on the schools and other public services, there's plenty of cause for concern. For the nation as a whole, as for California, this is both an opportunity and an awesome challenge. Roughly 26 percent of California's population is foreign born, far and away the highest percentage in the nation and the highest in California since the generation after the Gold Rush; one fourth of our children come to school from homes where English isn't the primary language and where, in many cases, no English is spoken at all. That population has become a huge market for hundreds of foreign language newspapers, magazines, radio and TV stations, as well as part of a global economic system that moves not only capital and goods but technology, labor and billions in remittances from one country to families in another. California is also a principal base of a huge network of hometown associations - Mexican and Salvadoran particularly - that raise tens of millions of dollars annually from fiestas, dances and individual contributions to build and repair churches, roads, schools and other facilities in the old country. Those contributions are matched two-to-one or three-to-one by the federal and state governments in Mexico. Almost every Californian knows that there are neighborhoods and whole towns where a bilingual person is one who speaks English. All of that, and more, underlies the clash-of-cultures arguments of people such as Victor Davis Hanson, the former Fresno State classicist who warns about the growth of "Mexifornia," or Samuel Huntington, the retired Harvard government professor, who maintains that unlike the immigrants of a century ago "Mexicans and other Latinos have not assimilated into mainstream U.S. culture, forming instead their own political and linguistic enclaves and rejecting the Anglo-Protestant values that built the American dream. ... Demographically, socially and culturally, the reconquista of the southwest United States by Mexican immigrants is well under way." There's a familiar echo here. A century ago, major figures like Rep. (later Sen.) Henry Cabot Lodge of Massachusetts warned that the Russians, Italians, Poles and Hungarians then immigrating by the millions were from "races most alien to the body of the American people and from the lowest and most illiterate classes ... and do not promise well for the standard of civilization in the United States. ... That kind of immigrants reduce the rate of wages by ruinous competition, and then take their savings out of the country, are not desirable. They are mere birds of passage. They form an element in the population which regards home as a foreign country, instead of that in which they live and earn money. They have no interest or stake in the country, and they never become American citizens." Lodge was also a Harvard man. In fact, today's new immigrants - Hispanic, Asian, Middle Eastern - generally follow the same paths as their predecessors. By the second generation, there are few Latinos not fluent in English; by the third only a small minority still speaks any Spanish. The California Hispanic Chamber of Commerce estimates that there are now 600,000 Latino-owned businesses in the state; in Los Angeles, according to urbanist Joel Kotkin, one third of all businesses are minority-owned, and of all Latinos who arrived here before 1980 and are still here, 55 percent own their own homes, almost the state average. And, according to Rand economist James P. Smith, "the concern that educational generational progress among Latino immigrants has lagged behind other immigrant groups is largely unfounded." Unlike many studies which compare today's third generation with today's first and second generations, Smith uses the first generation of a half century ago - in theory the real grandparents of today's third generation, as the base - which shows much greater gains from grandparents to grandchildren. The fears that Latinos are not assimilating, says Smith, "are unwarranted." But, by definition, Smith's story of progress is about the past, not the present or the future. Is California-present - or for that matter the nation - prepared for the new society growing up around us in which we are all, to one degree or another, immigrants? Are we still willing to maintain and pay for the good society we seemed at one time on the road to becoming, and seemed sometimes to take for granted, or will we settle for an increasingly fractured, inequitable society divided between rich and poor? The question transcends the immediate concerns about infrastructure bonds, inadequate schools and crowded freeways, although all are part of it. The great period of public investment and growth of welfare-state programs in the United States - from roughly 1933 to 1968 - coincided almost exactly with the period of lowest immigration. In California it began later, but its end - symbolized most particularly by the passage of Proposition 13 in 1978 - coincided with the great spike in immigration that began in 1965 with the repeal of the national origins immigration quotas enacted in 1924. Three months after Proposition 13 passed, Howard Jarvis, its principal author, wrote a piece for The Bee complaining about "illegal aliens who come here to get on the taxpayers gravy train." Since then we've had a string of ballot measures seeking to restrict services, including public education, for illegal immigrants, and ending ethnic preferences in employment and education. We can debate endlessly about the merits of those measures, and about the success and failure of existing U.S. border control measures and proposals (mostly to do more of the same) - fences, walls, employer sanctions - and about the relative assets and liabilities that immigrants bring. (The truth seems to be that the economy gains and the federal treasury may gain from the difference between the Social Security taxes illegal immigrants pay and the benefits they'll never get, but in the short run at least state and local governments are disproportionately burdened.) In any case, despite the fluctuations of the economy, there's almost certainly an inverse relationship between high rates of immigration in a post-industrial society, illegal immigration especially, and the welcome those immigrants get. Some scholars have also concluded from experience in other places that the more diverse a society is, the less generous it tends to be with public goods. "The more a middle-income voter looks at the likely recipient of public aid and says 'that could be me' (or my daughter, or my whole family)," says UC Davis economist Peter Lindert, "the greater that voter's willingness to vote for taxes to fund such aid. Affinity would be fostered by ethnic homogeneity between middle income voters and the perceived recipients. Conversely ethnic division would create suspicions that taxpayers' money will be turned over to 'them.'" "California cannot be expected to educate millions of children brought here by untold numbers of illegal aliens and millions of legal immigrants," said one handout from Californians for Population Stabilization. "Schools have reached the crisis point." As the state's complexion gets browner, reducing the "us and them" dichotomies, and as the percentage of Latino voters, now at roughly 19 percent of the electorate (vs. 67 percent non-Hispanic whites), continues to grow, California may rediscover itself. But in the long meantime, California's cumbersome governmental machinery - its supermajority vote requirements, its auto-pilot spending mandates, its incomprehensible fiscal machinery, its wild-card initiative process - make it appear that despite voters' expressed desires, they really aren't sure they want the thing to work at all. Yes, people don't trust the politicians (another grand old American tradition), yet everything the voters have done makes the process less accountable, manageable or comprehensible. In the past few years, almost every governmental reform proposed by either liberals or conservatives has been rejected at the polls. What's certain is that California has become the test case for something that no nation had ever attempted before: forge and maintain a modern, prosperous high-tech democracy out of the great ethnic and social diversity of people, most of them from the Third World, who the state has attracted. That means taking people from that enormous spectrum of California backgrounds and cultures and educating them all to the high level of proficiency that those ambitions require, not only for the world's economy but for effective citizenship and cultural competence in this new society. Simultaneously, California is also testing the power and adaptability of classic Western constitutional principles of limited government, individual liberty and right to dissent, equal protection, due process, minority rights, separation of powers, civic participation and responsibility in that new environment - something that people like Huntington and Hanson believe can't successfully be done. California, with its diversity of cultural backgrounds and languages, has extraordinary advantages both as a beacon to - and as the nation's pre-eminent economic and cultural link with - the rest of the world. But that good news also brings problems: Indian Silicon Valley engineers, Japanese computer-designers and Mexican restaurant workers who never went past sixth grade have more offshore connections - more links with family and peers - in Taiwan, Mumbai, London or (in the latter case) in Michoacan or Zacatecas - than they have with each other. Can we create institutions to bridge the gaps and bring Californians together in a single vital political and social community? Almost every week brings another question asking whether California is governable. But the more pertinent issue may be whether California really wants to be governable. At a time when there's growing overseas competition in industries and technologies that California had once regarded as its own, it's entirely possible that even under the best of circumstances, as planner William Fulton said, "the best possible result might not be as good as it used to be." The state's history and traditions of adventure and optimism are always there for those who care to recall and honor them. The question is which way California - or the nation for that matter - really wants to go.
Note: This essay was exerpted from the book: California: America's High Stake Experiment, and was reprinted here with the permission of the author: Peter Shrag.
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