THE electric car company is based in China. The noodle factory was founded decades ago by a Chinese immigrant. The two businesses may have China in common, but they represent two different ways of looking at the jobs crisis in this city.
Half a century ago, Los Angeles was a dominant economic force in various respects, with its formidable military contracting industry, for example, and a garment trade that rivaled that of New York. Today, unemployment in Los Angeles County is 12.5 percent, one of the highest rates among the country’s major metropolitan areas. The recession walloped industries like manufacturing and retailing that have traditionally been strong in the city.
Now, Los Angeles is more like an “Athens by the Pacific,” Joel Kotkin, a professor of urban development at Chapman University, has written, comparing the city to modern-day Greece. But dysfunction can breed innovation. As Los Angeles works to solve its economic woes, it could provide a road map for other ailing metropolises, said Austin Beutner, the city’s former first deputy mayor and chief executive for economic and business policy. Mr. Beutner, who was once an investment banker, left his city posts last spring so he could work full time on campaigning to succeed Antonio Villaraigosa as mayor in 2013.
In tackling the city’s jobs deficit, Mr. Beutner asked: Can the city’s sheer size and complexity be turned into an asset? He maintains that it can — provided that the bureaucracy that usually goes along with those qualities can be tamed.
To explain, he points to BYD Auto (the initials stand for Build Your Dream), a Chinese electric car company that was recently scouting for a site for its United States headquarters. Los Angeles, with its heavy population of drivers and its relative proximity to Asia, might have seemed a natural choice.
But when Mr. Beutner sat down to meet with BYD executives about the matter, he was told that the city was off the list. When he asked why, “they took out a 12-inch stack of rules and regulations, things I didn’t understand, and I think were equally unintelligible to them,” he said in a recent interview.
He offered to start over with BYD. Los Angeles couldn’t compete on cash incentives, so he came up with enticements that tapped into the city’s wide array of resources. BYD could showcase one of its cars at the Los Angeles International Airport, which is city-owned. A Hollywood celebrity would be asked to drive a BYD car to the mayor’s annual Oscars party. Finally, a collaboration between the city-owned utility company and government inspection agencies would guarantee that battery chargers were installed in customers’ homes within a week.
“Long story short, they’re coming,” Mr. Beutner said. The decision is resulting in an estimated 150 jobs.
Los Angeles County has a population of more than nine million, and this market size should be used to lure more businesses, Mr. Beutner said. And the area’s diverse resources, from its universities to the creative capital of its entertainment industry, should be harnessed to work with city government, he said. “We’re not using the assets we have, not thinking creatively how the public and private can work together,” he said.
Mr. Kotkin says he thinks a different approach to attracting jobs — one that focuses on the city’s small, local communities, as opposed to its vast size — would be more fruitful. “He’s a deal-maker, but we don’t need deals,” he said of Mr. Beutner. “That doesn’t strike me as the way to build the L.A. economy. He has an investment-banker mentality.”
(In his defense, Mr. Beutner said, “What I learned in the world of finance and deal-making was how you bring people together with opposing views and convince them of a commonality.” To say that it is not a relevant skill, he added, “I think totally misses the point.”)
Mr. Kotkin says that to achieve growth in an economy like that of Los Angeles, “you’ve got to grow it from the ground up, nurture its roots — in the small factories, in people’s houses,” Mr. Kotkin said. “L.A. can never again compete at the megacorporation level. It can’t compete with Dallas.”
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