Genentech Tour Even Better Than Willie Wonka's

Genentech Tour Even Better Than Willie Wonka's
By Steve Huddleston

It is big. It is shiny. It is high-tech beyond high technology. It is incredibly complicated. Only by seeing it firsthand can an outsider, a greenhorn, truly grasp the miracle of a science that is battling cancer and other life-threatening diseases.

"In business for life," Genentech is the new landmark in Vacaville, which hosted a group of business folks on Thursday to tour its massive $1.2 billion expansion. Behind the safety goggles, my eyes were popping out of my head.

The other miracle: It chose to re-invest in Vacaville - or more precisely, California.

Sure, there was already a plant here making its life-science medicines. And the city and community have embraced the well-respected company. The biotech giant finds good employees here, thanks to UC Davis, UC Berkeley and Solano Community College.

But the state sometimes seems to do its best to chase away good employers, who offer high-paying jobs, some on the cutting edge of a new technology that provides hope for those with debilitating diseases such as cancer, lymphoma and asthma.

While other states and countries scratch and claw to catch the attention of such companies, the attitude of Gov. Arnold Schwarzenegger and others in his administration is puzzling. "This is Kal-ee-fornia," the guvenator will say, "open for business."

So why does the great Golden State fail to reward investment here? Why are there tax laws that penalize manufacturing plants? Why are there no incentives to move jobs here and build billion-dollar, state-of-the-art facilities here? Why don't we try to compete with Oregon, Arizona, Texas and Singapore, who understand that the benefit of having a Genentech will repay a community, a region, a state tenfold over time?

Vacaville, and California, is fortunate to have the latest expansion of Genentech. It wasn't because of the state's business-friendly environment. Not at all. It was because of the city's collaborative and cooperative ability to fast-track approvals of the $1.2 billion plant, knocking a year off the construction schedule that would have been necessary were it to be built anywhere else.

It wasn't the tax laws. It wasn't the governor's warm and fuzzy TV commercials.

At the end of our 90-minute tour Thursday, it became painfully obvious that a key piece of the manufacturing cycle is missing in Vacaville. There is no packaging and distribution here. That will be done in a town near Portland, Ore.

You see, the cost of construction and the tax structure in California, combined with the incentives for investing in Oregon, make it better to create the drugs here, freeze them here, and truck them up the Pacific Coast to another multi-million facility for packaging and shipping.

It's more affordable. Crazy, but true.

Consider this conundrum. If Genentech were Campbell's Soup in Dixon, then it would take in all the tomatoes, process them and make huge batches of soup. They'd put the soup in large tanker trucks and drive to Oregon where workers there would fill soup cans and distribute them to grocery stores.

That, in effect, is what is happening. A state that comprises one of the Top 10 economies in the world, won't tweak things to reward investment here and create jobs.

It's disheartening when you consider the Bay Area is the origin of the biotechnology revolution. As Charles Calderaro, the new chief of Vacaville's Genentech facility said, "It would be unfortunate for California to lose the industry that it gave birth to."

But that's what's happening. We were lucky to get a $1.2 billion Genentech expansion (and the property taxes that someday will come with it). But we lost the packing and distribution facility to Oregon.

Johnson & Johnson, parent company of Vacaville's Alza Corp., is disinvesting in California. Last week Alza announced layoffs for 60 of its middle-management folks, with more likely in coming months.

Let's hope it's not a trend.

The author is publisher of The Reporter. Email: hud@thereporter.com.