The Press-Enterprise – Mattel consolidates distribution operations in San Bernardino

07:41 PM PDT on Thursday, April 15, 2010 (http://www.pe.com/business)
By CHRIS H. SIEROTY
Special to The Press-Enterprise
Mattel Inc. will close its distribution center in the City of Industry within the next three months and consolidate operations to its distribution center in San Bernardino.
The company’s decision to shut down its Industry distribution facility July 30 means the loss of 115 jobs, according to Mattel spokeswoman Lisa Marie Bongiovanni. She said she wasn’t sure when or if any of the positions being eliminated would eventually be transferred to San Bernardino.
The Inland facility, which was completed in 2004, employs 125 people and is a 1.2-million-square-foot distribution and logistics center on a 58-acre site formerly occupied by Norton Air Force Base.
The decision to close their Industry distribution center was made “following an extensive assessment to streamline distribution capacity in Southern California,” Bongiovanni said in a statement, adding that employees were given advance notice of the closure.
The elimination of the 600,000-square-foot distribution center comes during changing times in the toy industry. Despite reporting an 86 percent increase in fourth-quarter profits, Mattel continues to face stiff competition from other toy manufacturers both in the United States, Taiwan and China.
“They are in a very competitive market. They continue to do anything they can do to streamline their costs and operations,” said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp.
Kyser said the one piece of good news was that international trade continues to improve, with exports continuing strong growth, along with modest growth in imports. He expected that continued growth to translate into a pickup in demand for distribution and logistics jobs in Southern California.
Inland politicians and economists welcomed Mattel’s announcement as confirmation of the region’s strength as a center of warehousing and logistics.
“It’s good news that we will be retaining our facility here, and it puts us in a good position for future expansion as the economy recovers,” San Bernardino County Supervisor Neil Derry said.
Despite the job losses in Industry, Derry said Mattel’s decision was more confirmation of the strength of the San Bernardino market as a central hub for distribution in Southern California.
“It’s also cheaper to do business here than in Los Angeles and Orange counties,” the supervisor said.
John Husing, a Redlands-based economist, agreed, saying Mattel’s decision was based on the cost of doing business being less in the Inland Empire.
“Companies under pressure tend to migrate out here,” Husing said. “Mattel’s announcement was just one of several announcements from other companies” moving operations to local facilities.
Recently, Kohl’s Inc. announced the purchase of 970,000-square-foot warehouse at 825 E. Central Ave. in San Bernardino. Meanwhile, Skechers USA Inc. announced plans to build a 1.8 million-square-foot distribution hub in Moreno Valley.
“It’s never good to see job losses, but this move demonstrates the vibrancy of this market,” said Jim Morris, chief of staff to San Bernardino Mayor Patrick J. Morris. “The upside as I see it, is as the economy recovers, Mattel will rehire some of those positions (lost in Industry) here.”

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