News Column

A look at manufacturing in Ventura County, which pays the highest in Southern California

July 26, 2014

By Carol Lawrence, Ventura County Star, Calif.

July 26--Camarillo, Ca. -- At chip-maker Vitesse Semiconductor Corp.'sCamarillo headquarters, highly technical workers like electrical engineers and designers make up half the staff. Manufacturing, however, has been outsourced since 2002.

"That's the way the industry has moved," said Michelle Lozada, Vitesse's corporate communications director. "What's positive for California, and for the U.S., is that we retain the (engineering) brainpower here, and that's really the heart of any semiconductor design."

Another local chip-maker, Semtech Corp., also no longer makes computer chips at its Camarillo headquarters and sends much of its manufacturing overseas.

Both are examples of critical trends in manufacturing -- the outsourcing, and often offshoring, of less-technically skilled production jobs replaced by equipment and highly technically-skilled staff.

The good thing for Ventura County is that the making of high-tech products -- particularly computer and electronic parts and chemicals -- provide most of the industry jobs here and are the two leading types of manufacturing done here. Because of their high salaries, the overall industry in the county pays an average annual wage of $95,500.

Not only is that higher than the state's average of $77,400, but it's the highest average annual wage for manufacturing workers in the seven Southern California counties analyzed in a new report by the Los Angeles Economic Development Corp.

The 64-page study, completed for the Torrance nonprofit service, California Manufacturing Technology Consulting, analyzes key trends changing how manufacturing is being done in California and how they influence jobs.

Ventura County has "a very high technical level of manufacturing which allows it to be fairly high in wages," said Christine Cooper, one of the report's authors and vice president of the Los Angeles County Economic Development Corp..

The county also has 17 sub-areas, such as pesticide production, electrical lighting, communications equipment and metalworking manufacturing, that make it highly competitive in those areas.

But manufacturing as an industry is at a cross hairs. Its processes and labor force are increasingly affected by automation, innovation, higher technology and offshoring, said Cooper, and especially in California.

"We can see there is manufacturing employment going to lower-cost states, and what is remaining here is technologically intensive manufacturing, and that which is higher capital intensive," she said.

The report describes technology trends that have hurt jobs, such as using computer simulations to test materials instead of making and testing prototypes, which are labor and time intensive.

"It's not just automation, but the different capabilities and processes," Cooper said.

Cooper and her co-authors make dire predictions for manufacturing jobs in Southern California -- they will continue to decline, and the low-skilled, offshored jobs won't be returning to the United States.

That is why California Manufacturing Technology Consulting, which consults with about 800 companies a year on technology, growth and other issues, hired the LAEDC to do the report.

"I'm concerned about employment," said CMTC President and CEO Jim Watson. "I'm finding that technology is increasing productivity, but not necessarily increasing jobs."

He wanted to know how all those factors and the present workforce are changing, and the direction of those changes.

The report found that statewide, manufacturing companies cut almost 40 percent of their workforce from 1990 to 2012. Ventura County lost 20 percent of its jobs in the industry in that time period, according to the report.

Cooper acknowledges the unemployment trend but said the industry is still "alive and well, especially in California," and "continues to contribute significantly to the state's and nation's overall economic growth."

Additionally, the report says the increasing digitization of manufacturing is calling for more programmers, software engineers, and mechanical and structural engineers.

Watson's hope is that eventually, the changes will lead to an increase in jobs.

"Technology hopefully drives innovation, which leads to new markets, and then new customers, and then hopefully, new growth," he said, and the need to add jobs.

In Ventura County, manufacturing accounts for 10 percent of the workforce. Thirty-nine companies employ 7,900 in the chemical products sector, including Thousand Oaks drugmaker Amgen Inc. and Monsanto Co.'sOxnard seed plant. Together with computer and electronic parts, they are the county's leading sectors.

Bruce Stenslie, president and CEO Economic Development Collaborative-Ventura County, highlighted the local economic importance of the county's high number of competitive manufacturing areas, such as pesticide production, electrical lighting, communications equipment and metalworking manufacturing.

Many of those subsectors have grown since 2002, Stenslie said, and their "great diversity" collectively contributes positively to incomes here.

"Retaining our diversity through the recession, and continuing the concentration on the high tech end of the manufacturing spectrum, is a very good thing," he said.


(c)2014 Ventura County Star (Camarillo, Calif.)

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Source: Ventura County Star (CA)

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