Businesses from these three countries employ thousands across Southern California


Japan-based Kinkisharyo International made the trains used on the Metro Gold Line. (Photo by Walt Mancini/Pasadena Star-News)

By Kevin Smith, San Gabriel Valley Tribune
POSTED: 06/17/16, 12:27 AM PDT | UPDATED: 9 HRS AGO

A pair of new reports show that Southern California is a powerful magnet for foreign investment and a major player in international trade, despite global economic challenges.

Related story: Read our analysis of LAEDC’s second report

The reports will be unveiled today at the SELECT LA Investment Summit in downtown Los Angeles. The event brings together hundreds of global investors with business and government leaders from throughout Southern California.

SOCAL HOME TO MORE THAN 9,000 FOREIGN-OWNED BUSINESSES

The first report, “Foreign Direct Investment in Southern California,” shows that there are more than 9,000 foreign-owned enterprises (FOEs) in Southern California that directly employ 366,415 people.

And the economic power of those workers is significant.

Their annual wages total $23.6 billion and generate an economic impact that sustains 8.1 percent of all direct, indirect and induced jobs in Southern California. The lion’s share of workers employed by FOEs — 116,721, to be exact — work in manufacturing. That accounts for $6.8 billion in estimated wages.

Stephen Cheung, president of World Trade Center Los Angeles, isn’t surprised by those numbers.

“I’m not surprised but I think it’s a big surprise to a lot of people,” he said. “We are the number one manufacturing center in the U.S. and we want to convey that message to the world.”

JAPAN LEADS THE WAY IN U.S. INVESTMENT

The majority of FOE jobs in Southern California can be attributed to a handful of countries, including Japan, the United Kingdom, Germany, France and Canada.

Japan tops the list, with 2,439 business and 79,403 jobs. That was followed by the UK, with 1,135 firms and 54,910 jobs, and Germany, with 825 businesses and 32,594 jobs.

LA AND ORANGE COUNTIES HAVE THE MOST FOREIGN BUSINESSES

On a more local level, Los Angeles County accounts for the biggest chunk of FOEs with 4,367 foreign-owned firms and 177,427 jobs.

Orange County ranks second with 1,812 businesses and 84,142 jobs.

San Bernardino County has 654 FOEs with 20,523 jobs, and Riverside County has 502 businesses with 15,998 jobs.
KINKISHARYO EMPLOYS MORE THAN 300 WORKERS IN SOUTHERN CALIFORNIA

Kinkisharyo International LLC, a company based in Osaka, Japan, is a prime example of an FOE that’s helping to boost Southern California’s economy.

The company makes light-rail train cars for the Los Angeles County Metropolitan Transportation Authority and maintains its U.S. headquarters in El Segundo. The vehicles are made and assembled at two facilities in Palmdale.

“We have been working in the states since the early 1980s and we got our first contract with L.A. Metro in 2012 to make 78 cars,” company Vice President Donald Boss said. “That was later extended to 235 light-rail vehicles.”

Kinkisharyo employs more than 300 workers in Southern California, but Boss said the business environment isn’t exactly easy.

“We’re excited to be here but there are a lot of challenges,” he said. “The challenges include labor costs, the cost of doing business here and the high cost of living. We have to pay good wages to get people who will do a good job.”

The report also shows that California has the biggest foreign investment in “greenfield” projects of any state in the U.S., with 230 projects. Greenfield projects are developments built on unused land where there is no need to remodel or demolish an existing structure.

Foreign investment in greenfield projects in Southern California totaled more than $29 billion from 2003 to 2015.

The foreign investment report was published by World Trade Center Los Angeles and prepared by the Los Angeles County Economic Development Corp. The LAEDC also prepared the trade report.

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