Spectra-Physics
"Business moves quickly, and this community
can move as quickly as business"
When Spectra Physics set out to upgrade its San Francisco Bay area operations in 1989, spiraling costs and miles of red tape blocked the optics manufacturer's expansion. Hoping to reduce costs and retain employees, a search was launched for an alternate location. Complex operations and a desire to stay within a few hours of the Bay area ruled out an offshore move.
The company had high expectations for a new location, ranging from a highly educated, but affordable work force to outstanding quality-of-life issues. Spectra Physics even developed a surrogate measure for testing per capita income against high school and 8th grade test scores. Test scores generally equate to income percentiles, but Butte County was three to one off the norm. Why? "Butte County residents place a higher priority on education," says Spectra Physics vice president/general manager George Balogh. "We probably have the best group of teachers in the state. The university is also appealing to many of our employees."
A location close to a major university was part of the company's criteria and California State University, Chico offered outstanding mechanical engineering and computer science programs. Spectra Physics also wanted a location with high quality-of-life standards. Housing affordability, educational, cultural and recreational opportunities and proximity to metropolitan areas were all important to the company's high-level engineers and technicians. In Butte County, home costs are about one-third of those in the Bay area, the educational systems have all received national acclaim, and cultural and recreational opportunities abound.
When company officials decided to visit the City of Oroville, the entire city council turned out to meet with them. Initially, Spectra Physics wanted to build a 65,000 sq. ft. plant and have the option of adding another 100,000 sq. ft. without a six-month debate over permits.
Local government granted the request and set the land aside. The company was offered five acres and first refusal rights on an adjoining five acres.
Instead of red tape, the community introduced a fast-track construction program. All permits were issued within two weeks, and it took just three months to level the site and build the plant. A second building was under construction within a year.
"The community worked as partners," says Balogh. "The mayor and city manager came out once a month to see how we were doing and what they could do to help us. Butte County is pro-industry and there's plenty of land. The industrial park is very well laid out, infrastructure is in place, and it goes back for miles‹it's big enough to handle even the largest corporation."
"There's a wage differential between Butte County and the Bay area of about 35 percent," says Balogh. "Most high-tech assembly plants have a labor content that's three to four percent of sales level, but because Spectra Physics is fabricating components, its labor content is above 10 percent. Anytime it's that high, you have to manage the margins carefully."
With somewhat lower wages and less employee turnover, along with the tax credits and other benefits gained from locating in Butte County's enterprise zone, Spectra Physics realized a 30 percent savings in operating costs‹important to a company whose customer base totals one-third of the world's market.
"Business moves quickly, and this community can move as quickly as business," adds Balogh.
Company Information
Address:
2001 Challenger Avenue
Oroville, CA
530-532-6154
Manufacturing
Product: Biomedical Instrumentation
Process: Fabricate and coat optical components for very high-end laser applications.
Fast Facts
Employees: 130
Square Footage: 65,000
Customer Base: World-wide 1/3 of market share., divided equally in the United States, Europe and Japan.
Broke Ground: 5-31-91
Permitting Time: 2 Weeks
Construction Time: 3 Months
Top Factors in Site Selection:
1. 35% savings on wage rates
2. Quality of life for professionals
3. Enterprise Zone
4. Pro-industry city government
5. Quality of Education
© Butte County Economic Development Corporation 1999-2001. Any other use must have express permission.
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