Valley Forum The events of Sept. 11 and their aftermath have changed the mood of many in the country. Added to that the economic downturn has caused many companies to scale back on spending in many categories. The San Fernando Valley Business Journal asks: Is your company scaling back or canceling holiday events or parties for your employees due to the economy and the overall mood of the country? Marty Cooper President Cooper Communications, Inc. Woodland Hills I was at Ground Zero three weeks after the World Trade Center attack. I saw firsthand the resilience and commitment of New Yorkers to deal with the devastation and return to a normal life. We should all do the same. At Cooper Communications I expect my staff to once again mark the holidays with an incredibly expensive gift for me…and I plan to reciprocate with an equally outrageous token of appreciation. And our holiday staff lunch will be no less celebratory than any in the past. Don Potter President PKPF, Inc. North Hollywood At PKPF, we are using some cash and lots of credit card award points to give our staff a special holiday celebration. It’s time to be good to ourselves, and we’re doing our part to create a positive attitude throughout the company today. Hopefully, this will help instill faith in the future for our business and our country. Alan E. Kassan Executive Vice President/General Manager Beitler Commercial Realty Services Sherman Oaks We are not really scaling back, just changing the nature of our holiday party to focus more on recognizing the value and contributions of our employees and agents, and to impart a positive outlook for the future. Bob Caine President Caine and Weiner Company, Inc. Van Nuys We are not scaling back our holiday event. We have this as an annual company dinner where our employees can get together in a non-office setting and help build our relationships and teamwork at the same time as taking notice of the holiday season. We feel it is important for support of our staff to be able to carry on this tradition.

With new video game platforms like Xbox, PlayStation 2 and GameCube coming on the market, area game makers are gearing up for what could be their biggest holiday season ever. Calabasas-based THQ Inc., one of the largest video game software developers in the U.S., is leading the pack with 39 new games to take advantage of what is expected to be a rush by consumers to restock their game inventories for the new consoles. “It’s truly the ideal time to be in this industry,” said analyst Shawn Milne of SoundView Technologies. “You have new game platforms and people who can’t wait to buy the latest games.” Beginning with the introduction of Sony Corp.’s PlayStation 2 last year, video game console makers have developed a new generation of game platforms Microsoft Corp.’s Xbox and Nintendo Co.’s GameCube with lifelike graphics and faster speeds that mimic the quality of a feature film. Today, game makers are scrambling to get their products on shelves in time for the holidays, prompting what could be a 40-percent to 50-percent increase in game titles over last year’s holiday season, Milne said. With the earlier launch of PlayStation and this month’s debut of Xbox and GameCube, local game-makers THQ, Tremor Entertainment Inc., Vivendi Universal Games, and TDK Mediactive Inc., among them are betting that video game software sales could surpass $9 billion during the holiday season alone, nearly as much as was sold all of last year.

The events of Sept. 11 and their aftermath have changed the mood of many in the country. Added to that the economic downturn has caused many companies to scale back on spending in many categories. The San Fernando Valley Business Journal asks: Is your company scaling back or canceling holiday events or parties for your employees due to the economy and the overall mood of the country? Marty Cooper Marty Cooper President Cooper Communications, Inc. Woodland Hills President Cooper Communications, Inc. Woodland Hills I was at Ground Zero three weeks after the World Trade Center attack. I saw firsthand the resilience and commitment of New Yorkers to deal with the devastation and return to a normal life. We should all do the same. At Cooper Communications I expect my staff to once again mark the holidays with an incredibly expensive gift for me…and I plan to reciprocate with an equally outrageous token of appreciation. And our holiday staff lunch will be no less celebratory than any in the past. Don Potter President PKPF, Inc. North Hollywood At PKPF, we are using some cash and lots of credit card award points to give our staff a special holiday celebration. It’s time to be good to ourselves, and we’re doing our part to create a positive attitude throughout the company today. Hopefully, this will help instill faith in the future for our business and our country. Alan E. Kassan Executive Vice President/General Manager Beitler Commercial Realty Services Sherman Oaks We are not really scaling back, just changing the nature of our holiday party to focus more on recognizing the value and contributions of our employees and agents, and to impart a positive outlook for the future. Bob Caine President Caine and Weiner Company, Inc. Van Nuys We are not scaling back our holiday event. We have this as an annual company dinner where our employees can get together in a non-office setting and help build our relationships and teamwork at the same time as taking notice of the holiday season. We feel it is important for support of our staff to be able to carry on this tradition.

Ex-Studio Execs Start a Business on Bedtime Story By JACQUELINE FOX Staff Reporter Westlake Village-based Bent Willow Publishing, a relative unknown in the publishing world, says positive pre-release sales and interest in its first book, “The Moon in My Room”, indicate a solid entry into the children’s book market. The book, one of six planned in a series called “Willowbe Woods, Campfire Stories and Sing Alongs,” doesn’t officially hit the shelves until January. But already Bent Willow has secured a nationwide, in-store reading tour with Borders Books & Music following a successful first reading at the company’s Thousand Oaks store in September. Toy and novelty manufacturers have called to express interest in developing a character line for the retail market, and an additional 15,000 copies of the book have been printed to meet expected demand. “I knew it was going to be successful, but I don’t think I knew exactly how successful,” said Bill Wallen, a former Columbia Tristar executive who launched Bent Willow in January of this year, along with Patrick Davidson, former senior vice president for The Disney Channel. Wallen and Davidson, along with Wallen’s daughter, Ila, also the book’s author, started Bent Willow’s parent company, Wallen Davidson, a marketing and promotional firm for the film and cable industry in 1999. Their plan was to earn enough income to start a publishing house and get the book series off the ground. The elder Wallen said executives for kid’s programming at Disney, Nickelodeon and big-name publishing houses all expressed interest in the Willowbe project from the start. Instead, they have kept the project in house and managed to earn close to $1 million of their own money through Wallen Davidson projects. “Whenever the book was shown to someone like Disney or Sony or a publisher, the usual reaction was, ‘This was amazing but, of course, we would have to buy the whole thing,”‘ said Wallen. “So we said, ‘It’s not for sale.’ We are leaving that world so we could do this on our own. And in order to do that, we had to raise enough money so that the business side of me said we have enough to go the course.” The first book features a bear named Will, who takes readers on a journey through the fictitious land of Willowbe Woods in order get advice and ultimately overcome his fear of the dark. He eventually learns that all he needs is a simple nightlight. According to Sue Zussman, area marketing manager for Borders, a typical in-store reading will draw about 30 people and produce sales of about 20 books. Ila’s “pajama mania” reading in September, which featured an actor dressed as Will, drew an audience of about 250 and the store sold more than 100 copies of the book. “All I can say is the book is doing very well,” said Zussman, who is based in Thousand Oaks. She said she pushed for Willowbe because of its local appeal and local roots. “This is a 100-percent Valley based project, and that’s what we were drawn by,” said Zussman. “We want to grow our book from the community. Yes, Borders is a big chain of books, but we are also about what’s homegrown.” Ila’s next reading is set for Dec. 1 at the Glendale Borders store, and another is scheduled for Dec. 7 in Northridge. Bill Wallen said he plans to spend $5 million to $10 million between now and next spring preparing for the launch of the video and CD series for “Moon,” and anticipates expanding his staff from about 12 to 20. “We expect to sell between 100,000 and 200,000 copies of our first book in January, but everyone is saying it’s going to be higher,” said Wallen. So far, the only products set to hit the retail market are a nightlight and a line of “Willow wear,” also due out in January. But Wallen said Bent Willow has been barraged by marketing firms hoping to land licensing agreements for the Willowbe characters. “Believe me, we’ve been deluged,” said Wallen. “And I know that there’s an opportunity for us to develop high quality toys for our franchise, but we want to be sure that we craft the consumer product line very cautiously so that it reflects the same degree of integrity we have achieved in the book. We are growing a franchise here, but we are not a Disney.”

Burbank-based animation studio DIC Entertainment Inc., has signed an agreement with ad agency Universal McCann and Cereal Partners Worldwide, a global partnership between General Mills Inc. and Nestle S.A., to give European broadcasters the opportunity to trade advertising time for DIC shows. Under the deal, advertisers will get free air time during DIC shows that air in Europe in exchange for paying DIC licensing fees. DIC CEO Andy Heyward said the joint venture will mean better access for the company’s shows in the European market. European broadcasters have limited budgets for programming. The arrangement will help subsidize DIC’s programming, allowing it to air its shows in the overseas market. “Europe is ready to do business this way and it won’t be long before DIC’s cartoons and our clients’ products are airing in Europe,” Heyward said. Under the plan, DIC will provide broadcasters with 2,500 half hours of programming. In exchange the broadcaster will provide commercial time for General Mills and Nestle products free of charge during the show’s airing, Heyward said. “Bartering has been around a long time in television and we’ve been successful at it before. ‘Inspector Gadget,’ is one example,” Heyward said, of DIC’s 1983 cartoon series. Already, the company has begun producing “Mary-Kate & Ashley in Action,” a live action show with twins Mary-Kate & Ashley Olsen; “Super Duper Sumos,” and “Liberty’s Kids,” for the current season and possible European distribution. Heyward said European broadcasters pay cash for programming, making it difficult to acquire a variety of different shows. “Everyone wins in this scenario,” he said. “Broadcasters will be able to afford to program children’s shows and the advertisers will have more outlets for their products.” Universal McCann will oversee the joint venture from its London office. ‘Thing’ to Become a Video Game John Carpenter’s 1993 box-office bomb “The Thing” is making a comeback of sorts, say the folks at Universal Interactive. It will be a full-fledged video game set for release next fall for Microsoft Corp.’s Xbox platform. The game will have the look and feel of the movie, which deals with an extraterrestrial monster who terrorizes scientists in Antarctica, said Jim Wilson, Universal Interactive president. “We’re very excited about this game and possibilities for future games for Xbox,” said Wilson, who said other characters from Universal Studios’ films are being considered for future game titles. ‘Powerpuff’ DVD Recalled Warner Home Video said last week that it plans to recall the a DVD featuring the Powerpuff Girls cartoon characters, titled “Meet the Beat Alls,” because it carries a computer virus. The DVD was released on Oct. 23, but the company said it only recently became aware of the problem. Warner says it’s offering all who bought the title a full refund. Warner said the virus only affects PCs and not DVD players. The company would not say how many copies of the title have been sold. Three computer programs and the intrinsic installer in the disk carry the virus, known as “Fun Love.” Alera Launches DVD Recorder Van Nuys-based DVD and CD recording equipment manufacturer, Alera Technologies LLC, is launching its new DVD+RW Cruiser, a device that can rewrite DVDs at speeds faster than the company had previously offered. The company says the new device is offered with FireWire IEEE 1394 interface ports and connected to other devices via connect kits that are now available. The DVD+RW Cruiser also allows video professionals to create DVDs and CDs with high-quality video production and data management software, like other more expensive devices, the company said. It is also useful for archiving and storing data. The Cruiser retails for $699. Fiberspace Receives Financing Fiberspace Inc., a Woodland Hills-based optical communications products maker, has received $1.5 million in equipment financing from Comerica Bank’s Technology and Life Sciences Division. Fiberspace said the financing was needed to continue to develop its Optical Phase Locked Loop technology, which would increase the efficiency in the use of the optical spectrum on existing fiber optic lines. The company said the technology will increase fiber optic capacity and improve its stability and accuracy, making it an attractive tunable laser platform. Hawker Feels Pinch of Travel Downturn The drop in air travel isn’t just hurting the airline business, but the entire aerospace industry said Jim Bennett, CFO of Sun Valley-based aircraft parts reseller Hawker Pacific Aerospace Inc. “It’s affecting all aspects of the industry,” said Bennett, whose company has been adversely impacted by the reduction in air travel. The company has seen business slow to a crawl in the weeks following the Sept. 11 attacks, but the drop did little to dampen Bennett’s enthusiasm for the 22 percent revenue increase for the quarter ending Sept. 30. The company lost $977,000 on revenues of $22.5 million, compared to an $11.1 million loss on revenue of $18.5 million last year during the same period. The company’s third quarter numbers showed the impact of cost-cutting that streamlined its operations, both here and at its England facility, Bennett said. Hawker officials, however, are bracing for further cuts in the airline industry that could adversely impact operations. Already, a number of airlines have announced plans to retire many of their aircraft, thus eliminating potential repair work or parts sales for Hawker. But the company is moving forward with plans to bolster its sales through a partnership with its majority shareholder, Germany-based Lufthansa Technik AG. The deal allows the companies to cooperate and support each other by providing aircraft component services to their combined customers. The deal, Bennett said, is worth an estimated $22 million in additional revenue over the next three years. But Bennett cautioned that the company would likely post lower revenues for the fourth quarter, compared to a year ago. Last year, the company posted a loss of $19.3 million on $77.1 million in revenue, compared to a $2.3 million loss on $82.3 million in revenue. Staff reporter Carlos Martinez can be reached at (818) 676-1750 ext. 17 or by e-mail at [email protected]

As a business, the Burbank Airport has taken a hit from all sides and is heading into the new year with many questions pertaining to operating costs, legal battles with city officials, and when and if it will ever get its new terminal built. If that isn’t enough, the new airport security measure signed into law last week will force Burbank, along with all other airports, to comply with new guidelines for safety that pose even more questions and threaten to affect the bottom line even further. Long before the attacks of Sept. 11, businesses across the board were beginning to feel the sting of a softened economy following the demise of the dot.com industry, and Burbank Airport was no exception. The ongoing game of chicken with the city of Burbank over plans to put in the new terminal forced the airport to, at least publicly, give up on hopes of building on land set aside for the project and consider a smaller piece of property nearby. Then came the attacks and airport closures, which resulted in heavy losses in revenues by way of downed flights and drops in passengers. The airport has since been spending roughly $160,000 a month to pay for extra security and police personnel as required by the federal government in the wake of the attacks, and there is little indication those expenditures will go away any time soon. In early October, the voters of Burbank passed Measure A, which essentially bars the city from giving the airport the green light to make any terminal improvements without first getting a flight cap and night time curfew. City officials have said publicly that they don’t like the measure, but must abide by law and implement it. So they have turned to the courts for help. The city filed a lawsuit naming the airport as defendant with the goal of getting clarification on the scope of the measure. Now, new federal guidelines call for putting the nation’s 28,000 airport security screeners to work for Uncle Sam, and there are clear indications that that is just the tip of the iceberg. Airport spokesman Victor Gill said it’s too soon to say what the airport’s share of the costs for making that facility’s roughly 110 security screeners federal employees will be. But the airport’s nine-member governing board is working under the assumption that it will be forced to pick up a portion of the tab, he said. “From a conservative planning point, you sort of have to plan that it’s your money until you hear otherwise,” said Gill. Furthermore, the airport will likely have to install new explosive detection equipment, now required under the Bush’s measure. Burbank may also need to pay for facility upgrades to accommodate what some predict will be an increase in security screeners at most airports and any demands they may bring to the table, such as new storage, locker and training facilities. The airport has now put its terminal plans on hold and sold the property it had been targeting as an alternate location in order to generate badly needed revenue. It has reduced its revenue forecasts for 2002 by as much as $4.7 million and cancelled plans to build a $10 million, double-decker, long term parking structure. Any future facility improvements that may be required under the security measure will, likely be hamstrung by the terms of Measure A, if not indefinitely, surely well into the first quarter, when airports are supposed to show evidence that they’ve begun to implement the new guidelines. “It’s a mess,” said Airport Authority President Chris Holden. “I think what (the Authority) is now trying to do is regroup. I guess just about everything that could make you reevaluate your businesses plan has occurred, and none of us could have predicted it.” On the one hand, the new measure and the events that have devastated the airline industry could work in Burbank’s favor. Increased security at LAX could result in increased passenger overflow to Burbank, which would also boost revenues. “The way this shakes out may be good for Burbank in one perverse way,” said James Gattuso, vice president for policy with Competitive Enterprises, a Washington D.C. think tank. “If the system is slowed down to some degree because of increased security at the larger airports it may drive traffic to the smaller airports. So what’s bad for the nation as a whole is good for Burbank.” Increased passenger levels at Burbank would also bolster the airport’s case for building a larger terminal and increasing the number of gates, which could prompt more involvement from the Federal Aviation Administration. “I think in terms of if there were an increase, certainly we would have a situation where the need to have a relocated terminal would only be enhanced,” said Holden. “But that’s more of a capacity issue, so we don’t know right now just exactly how much Burbank sits on the federal radar screen.” On the other hand, said Gattuso, making a federal agency out of a privately run business hasn’t always gone over so well with the public. And he’s not sure the switch wouldn’t exacerbate an already tenuous relationship between the airport and residents of Burbank. “My concern is simply a common sense one,” said Gattuso. “It’s difficult to find examples where making a federal employee out of a private one makes them a better one. There are exceptions for everything, but we do know from experience (that they) don’t have the same degree of accountability. It’s very difficult to do that with the federal government.” Gill said the airport hasn’t taken a position on whether federalizing the screeners is a plus or negative for overall operations. It is simply being viewed as a way to bring back passengers. “I think the authority hasn’t debated the merits of the proposals,” said Gill. “But no matter what happens, we are going to end up with better trained screening personnel, and definitely more attention paid to the activity, and that’s a plus for everybody.” In addition, said Gattuso, there is an indication that the government will see a need to significantly increase the number of screeners now in place at each facility across the country. Passengers will help fund the program by paying $2.50 each time they board a plane and up to $5 per trip. But that won’t be enough to cover all the costs, particularly if the government decides 28,000 screeners isn’t enough, he said. “I would be very surprised if the numbers (of screeners) didn’t go up dramatically and those fees won’t cover everything, so I wouldn’t be surprised either if we were to see tax increases,” said Gattuso On the Measure A issue, Holden said he’d like to see the city re-write the terms of the law and throw it back to the voters for another round of approval, rather than add another layer of uncertainty to an already murky and costly debate. Gill agreed that putting it before the courts will do more harm than good. “Right now, we do not want to be a defendant,” said Gill. “We are not in a position to debate the merits of the case.” The city had debated whether to pull the lawsuit on Measure A, but instead is now considering bringing in its authors to help clarify their original intent. However, Burbank City Manager Robert “Bud” Ovrom said he’s simply hoping the courts will recognize the measure for what it is and throw it out alltogether. “I’ve said publicly from the beginning that (Measure A) would never hold up,” he said. Ovrom added that the city was hoping to “get some kind of clarification on the measure” by the first of the year. “We are caught in a tough spot,” said Ovrom. “The council will have to carefully weigh which airport projects it can implement, and which ones are blocked by the measure.

Summary Business: Automation devices and data systems Headquarters: Woodland Hills CEO: Larry D. Brady Market Cap: $231.6 million Dividend Yield: NA* Total Liabilities: $1.03 billion P/E: NA Long-Term Debt: $328.5 million *UNOVA does not pay dividends Like many in the tech sector, Woodland Hills-based automation and data collections systems maker UNOVA Inc. took it on the chin during the third quarter. The $1.8 billion company, with holdings in industrial automation systems and automated data systems, posted a $250.7 million loss (or $4.39 per diluted share) on sales of $358.9 million. That compares with a $7.3 million loss (or $0.13 per diluted share) on sales of $439.5 million for the same quarter in 2000. Most of that loss was attributable to goodwill charges for acquisitions made several years ago, and some of UNOVA’s divisions even generated a profit. But with a number of its businesses in sectors that have been hardest hit by the economic downturn and mounting debt, analysts say the company still has a long way to go to return to health. “It’s a matter of not being able to turn things around which makes investors worry,” said William Potter, an analyst with ABN AMRO. The longer the company continues to sustain losses, the more difficult it will be to rebound, Potter said. “There are good signs coming from the company, but it’s going to be a rough fourth quarter,” he said. The third quarter of 2001 marks the fourth consecutive quarter of losses for the company. UNOVA’s debt has grown to $272 million from $259.2 million in the second quarter. UNOVA’s stock price has reflected its performance, recently returning to the $4 range in which it traded a year ago, after several peaks and valleys that saw shares rise to $6.88 and drop to a low of $2.15 over the 52-week period. On Nov. 23, the stock closed at $4.38. UNOVA officials declined to be interviewed. But they said in a statement that they were encouraged by the quarterly results. The company’s loss, they said, was due mostly to $237 million in goodwill charges for the 1998 acquisitions of Amtech Corp.’s Transportation Systems Group and the R & B; Tool Co. Without the charges, UNOVA would have posted a loss of $1 million, a dramatic improvement over the same quarter last year, they said. “We are pleased with these improved operating results, given lower revenues and the uncertain macro-economic environment,” said UNOVA CEO Larry D. Brady. In a statement announcing the company’s third-quarter results, Brady also said that UNOVA plans to continue its cost reduction program. UNOVA’s businesses include Automated Data Systems, which houses its Intermec Technologies unit and Industrial Automation Systems, comprised of a group of companies involved in body welding and assembly products, machine tools and other manufacturing products and systems. Hardest hit was Automated Data Systems, which lost $11.3 million in the third quarter on revenues of $142.9 million. That compared with a loss of $21.9 million on revenues of $161.9 million a year earlier. The Industrial Automation Systems unit saw its net income rise slightly to $16.9 from $15.4 million in the comparable period last year. Revenues for the division fell to $216 million, from $277.6 million in the earlier period. The increase was due largely to one of the IAS divisions, Integrated Production Systems, which posted an operating profit of $18.5 million on revenues of $167.6 million, compared to an operating profit of $16.6 million on revenues of $213.7 million a year ago. The improvements in its manufacturing sector in part reflect an ongoing program of consolidation and cost reduction in its Everett, Wash. manufacturing facility, Brady said. The company said plans underway should help to generate further improvements. The Intermec Technologies unit, which develops data collection systems for business, won new retail customers including Wal-Mart Stores Inc., J.C. Penney Co. Inc., Dillard’s, Liz Clairborne, Blockbuster Inc. and Chadwick’s, the company said. Intermec also launched a new partner program intended to help cross-sell its mobile communications products. “We’re hoping to see some better numbers and overall growth next year, but it’s tough to make progress in this economy,” said Potter, who rates the company a “hold.” Others, like analyst Walter S. Liptak of McDonald Investments, said the company is making the right moves, but is hampered by declining orders and the sudden decline in the aerospace market which supports its metal manufacturing and assembly operations.

Remember last year’s holiday office party? A nationwide economic recession had yet to be declared. There was no anthrax scare to contend with. Employees in satellite offices out of state weren’t afraid to fly in for the company bash, nor were budget constraints keeping them from doing so. And it was perfectly OK to break out the champagne and dress accordingly, even if you were soon to become one of the many walking wounded out there searching for a cure for the dot.com hangover. Well, things are going to be a little different this year. Executives at companies large and small say they are rethinking their company party plans, focusing instead on throwing family related events as opposed to big social bashes with open bars; substituting subdued lunch settings for posh evening soirees, and looking for ways to do it all on a tighter budget. Employees at one San Fernando Valley company have voted to donate their party funds to a relief organization for victims of the Sept. 11 attacks. Others are simply canceling their plans altogether because the idea of throwing a party just doesn’t fit the mood of the country right now not when joy has been replaced by jitters and many are being forced to strategize over formulas for economic recovery and can’t seem to justify the expense. “We have clearly had to scale back our plans this year,” said Lisa Haines, spokesperson for Health Net Inc. in Woodland Hills. “And it’s linked as much to the economy as it is to the overall mood of the country since the attacks on the East Coast.” For the last five years Health Net has thrown a daylong charity event at a local hotel to benefit underprivileged children. The company’s annual “Celebration of Children” holiday party, which always included all 2,000 Health Net employees based in the Valley, will be replaced by a company-wide toy drive this year. “It used to be a big event,” said Haines. “We’d rent out a big ballroom, and it would be a great party for about 1,000 kids. But we are really reacting to the current state of the economy right now and, of course, we are also trying to balance our desire to have an event with what’s going on around the country.” Haines said she’s already heard the sighs of disappointment. “I can say talking to several people who have volunteered to help organize this event in years past that there is certainly disappointment,” she said. The company will be providing toys for roughly the same number of recipients as last year, and, in addition to the toy drive, employees will also be sponsoring an adopt-a-family program to benefit 50 families across Los Angeles, Haines said. Robert Goodman, chief executive officer for Box Brothers in Woodland Hills, said he was still on the fence but economic factors will weigh in heavily when making the decision on whether to hold the annual office party, for which he usually allocates about $5,000. “Right now it’s all on hold,” said Goodman. “We typically do a pretty nice party with a full bar, nice buffet, lot’s of music. But this year I’m still not sure if I can justify it.” If Goodman cancels the event it will be the first year in 16 that the company hasn’t thrown a holiday party. He said he’s fully aware of the effect canceling would have on the morale of the roughly 50 employees based here, not to mention what it means for the service businesses that count on the holiday period to carry them through the fourth quarter. “I know people want you out there spending right now,” said Goodman. “But it just doesn’t seem like a good time to throw a party, and the truth is, I’d rather not have a Christmas party than lay anybody off.” “It’s tough everywhere, but certainly on the East Coast in the last few weeks it’s been difficult,” said Goodman. Andrea Michaels, owner of Extraordinary Events in Sherman Oaks, which organizes large-scale corporate events, conceded many of her clients are scaling back this year. She said her company is trying to combat the shift in attitudes by convincing her clients not to cancel their plans altogether, but rather to change the style of the event to fit both their budgets and the nation’s disposition. Michaels is pushing parties with patriotic themes (think U.S.O. bands and lots of flags) instead of big Hollywood-style productions; motivational speakers in lieu of the stand-up-comics, and family-style get-togethers at company headquarters instead of black-tie affairs in rented ballrooms. “The priorities are somewhat different this year, no question,” said Michaels. “But we are trying to come up with alternatives for them other than (saying) no. We are finding that people still want to have a nice event to reward their employees, but they just don’t want it to look too celebratory. ” Kathy Shepard, a spokeswoman for Hilton Hotel Corp. in Beverly Hills, said there has been a marked decline in large-scale holiday bookings for the Glendale Hilton Hotel, particularly on weekdays throughout the month of December. “It’s definitely a little soft compared to last year,” said Shepard. “What we are seeing is business groups are cutting back. They are not doing elaborate events, but having buffets instead of sit down dinners, and many are not including spouses to those events this year either.” Shepard added that even the traditional black-tie affair the corporate offices typically organize for her company has been nixed this year. It’s the cost factor, but it’s also the mood: It’s not a good time to be flamboyant when all this bad stuff is happening around the country and the world.” At least one Valley company has made the collective decision to donate party funds to help those who have been most affected by the recent disasters. The employees at the West Coast regional offices of Cigna Health Care in Glendale took a vote and decided to donate the $15,000 the company planned to spend on its holiday party to the United Way’s Sept. 11 Fund. The money would have paid for parties for all 450 Glendale employees, as well as workers in the company’s Seattle and Oakland offices. “We usually start planning our party in late September,” said company spokesman Jim Harris. “But we decided to send out an e-mail this year and ask our employees what they preferred to do. And overwhelmingly the response was to donate the money.” In keeping with company policy, Harris said that $15,000 donation was matched by corporate headquarters in Philadelphia for a combined contribution of $30,000. “That’s not a party for us, but it certainly leaves our employees with a good feeling,” said Harris. Last year Cigna workers were treated to a daylong celebration at the Glendale Hilton. Linda Scott, director of catering at the Sportsmen’s Lodge Restaurant and Special Events Center in Studio City said her sales and catering staff is grappling with their first year with no increase in holiday bookings. “We are very spoiled,” said Scott. “We haven’t had any increases in holiday bookings over last year and we are used to seeing one of between 10 and 12 percent every year.” The good news is bookings are on par with 2000 figures, said Scott. But the indication so far is that those events likely won’t include as many people, and certainly won’t call for as much fanfare.

Fred Gaines Title: Chairman-elect, VICA, and partner, Gaines and Stacey Age: 42 Education: B.A. in economics and political science, UCLA; M.P.P. in public policy, John F. Kennedy School of Government, Harvard University; J.D., UC Berkeley Boalt Hall School of Law Career turning point: Opening own law practice in 1997 Most admired person: Father, Erwin Gaines Personal: Married, three daughters Incoming VICA president Fred Gaines looks forward to advocating for the organization’s broad constituency As companies and organizations shift into their traditional planning season for the upcoming year, the Valley Industry and Commerce Association does so as well. However, for the 50-year-old business advocacy group, that process comes with a change of leadership. Current VICA Chairman Cathy Maguire’s two-year term ends on Dec. 31 when the gavel will be passed to Chairman-elect Fred Gaines. Gaines, a Woodland Hills attorney who specializes in land use issues, spoke to Business Journal editor Michael Hart recently about VICA’s goals for the upcoming year, the challenges the organization faces in the near future and his reasons for taking such an active voluntary role. Question: What does VICA do that is different from the Economic Alliance of the San Fernando Valley or the handful of chambers of commerce in the Valley? Answer: VICA has always been intended to be a broad-based business advocacy group. That’s what we’re there to do, and really on the major issues of the day. VICA was formed for the purpose of bringing infrastructure to the Valley. There was a time when there were a small number of larger businesses who wanted to make sure the Valley was going to have water and power and the public facilities that it needed. VICA, frankly, is almost still true to that 50-plus years later in terms of really looking at those bigger issues: transportation, taxes, workers compensation. The chambers of commerce, they’re there typically to help create business exchange amongst their various members, to advocate to a certain extent but more on local issues. If you need, for example, a stoplight at an intersection, the Reseda Chamber of Commerce can help you. But for the Reseda Chamber of Commerce to put its arms around a tax issue or the 405/101 interchange, that’s more difficult. The Economic Alliance grew out of other things that we wanted to do that were not advocacy-related: Valley-wide promotion, Valley of the Stars campaign, research. Q: What do you say to the criticism by some that VICA represents larger mainstream companies but to an extent ignores the Valley’s small business community? A: I am not unaware of those criticisms. We could always do better in terms of advocating on behalf of Valley business. We have about 350 members representing 250,000 employees throughout the Valley. There are always more members we could have, more participation we could have. And one of our goals as an organization is to broaden our base as an organization, to broaden our membership. We have to do a better job of including minorities and small businesses in our membership. Anybody can join, but we have to do a better job of being representative of all the businesses in the Valley. I realize VICA is not completely reflective of all the economic diversity of the San Fernando Valley, not because it’s a closed organization, but because it takes time for these things to develop. I’m hopeful we can see improvements in that area. Q: What role do you expect VICA to play in the debate over secession? A: If, in fact, it goes on the ballot in November, I think our board and our membership are going to want to look at it and see what the effects on business are and whether or not VICA should have a position. We have already started to put together a schedule of activities, panel discussions and meetings where we try to look at what would be the effect on business, leading up to a vote of the membership. While it’s not specifically a business issue, there are certainly aspects of it that affect business and that’s what we want to focus on: How would it affect business? Q: What do you believe is the sentiment of VICA membership on the secession issue? A: I think it’s mixed. Most businesses tend to be a little more conservative about major changes. They want to make sure the water’s going to flow and the power’s going to flow and services are going to be there. So, there’s some hesitancy to create a big change. On the other hand, the feelings people have in the Valley about reorganization are often very deep-seated. Many people feel they have not been properly represented, have not gotten the level of services they deserve, so I think there are mixed feelings. Q: When will that vote take place? A: I think it will occur in the first half of the year, leading up to some kind of position shortly thereafter. Q: One of VICA’s major goals this year was business tax reform. What more is there to accomplish on that issue? A: This last year, (VICA member) Mel Kohn was one of the co-chairs of the city-wide tax commission. They sort of did a first round of changes in terms of simplifying the process, streamlining the process with this tax amnesty program. Our next goal is to now go after the tax and see if it can be eliminated or severely reduced. Q: What about the move to get more state funding for Valley transportation projects? A: We want to keep our pressure on the infrastructure issues. We have made some progress in the last few years in getting the Governor to focus the state and regional authorities on transportation issues in the San Fernando Valley the 405/101 interchange, mass transit options but nothing’s been completed yet. We need to continue to be diligent in moving the ball forward and keeping these projects on schedule and on top of the priority list. Q: Do you expect the state government’s recent budget problems to have an impact on that goal? A: I’m very concerned. We are going to rely heavily on the state to fund these projects. We really have to stay on the front burner with this. We need to work with the strike force that is trying to keep people’s feet to the fire to keep these projects on schedule. We’re going to be fighting with other communities in the state for these dollars. Q: What other issues do you anticipate VICA getting involved in next year? A: Three priorities from VICA would be a great year, but I think we’re going to have a fourth. That’s going to be participating in and helping to create some kind of economic stimulus package in the Valley. Clearly, it looks like there’s going to be at least a little blip on the economic horizon. There’s planning going on nationally and locally on an economic stimulus and we want to make sure we get our share in the San Fernando Valley. Q: Of the four goals you’ve mentioned for VICA next year, is one more important than the others? A: No, but they may be spread out over different times of the year. The business tax, we want to hit hard on that at the beginning of the year because Feb. 15 is when people pay their city business tax. Our constituents will be most riled up about that in the first quarter of the year. The legislature’s going to do its budget in the second quarter of the year, so we have to focus on making sure we get our share of infrastructure money and seeing transportation projects are on track. The secession issue is going to be hottest in the third quarter and heading into the fourth quarter of the year. Q: How do you perceive the state of the Valley economy at this point? A: I think the Valley is in many ways a snapshot of the national economy. As we see a slowdown in the economy, I expect the Valley will be affected. The Valley economy is strong but, like the national economy, is vulnerable to weakness. People are more cautious about their spending. We may benefit on the defense-aerospace side, where we still have a fair bit of activity. The entertainment industry still is a very large factor. At least initially, it looks like people may be a little more hesitant to spend discretionary income and we could be affected by that. Retail is a big part of the Valley economy, and I think there is an expectation now that people will hold off on their purchases. Q: What would you like to see VICA become by the end of your two-year term? A: I would like to see VICA become part of a more broad-based coalition of groups that are working for the betterment of the San Fernando Valley. There has been a disconnect at times between business groups and some of the other social welfare organizations and the neighborhood organizations. There is a lot of common ground. You could put in a room five business leaders, five labor leaders, five homeowner association leaders and ask them to list the most important issues for them. Those lists would be the same 90 percent of the time.

Alfred E. Mann, founder of MiniMed Corp. and several other biotech firms, thinks area biotech firms are getting short shrift in the battle for investment dollars. “We need to develop a way to market ourselves and make ourselves more visible,” Mann told a crowd of about 200 people at the Valencia Hyatt Hotel in Santa Clarita on Oct. 30 for a conference on the area’s biotech sector sponsored by Newhall Land and Farming. The luncheon gathering also featured representatives of CTL ImmunoTherapies Corp., AlleCure Corp., and Advanced Bionics Corp. speaking on the current state of the biotech industry in Southern California and its future. Mann blamed San Francisco-based investment bankers for the lack of investment capital in the San Fernando Valley and surrounding areas. “They’d rather spend their investment dollars in their own backyard than here and that’s a shame,” said Mann, who has bankrolled his own firms, like MiniMed Corp., CTL ImmunoTherapies Corp., MannKind Corp. and others. According to the Southern California Biomedical Council, the biotech firms in Southern California received $118 million in venture capital last year, compared to $5.1 billion received by biotech firms in the Bay Area. The figures, Mann said, are all the more surprising since Southern California has more biotech firms than Northern California 2,090 companies in the five-county Los Angeles-Orange County area compared to 1,344 firms in the Bay Area. Mann blamed the higher profile of Northern California-based biotech firms who cater to the investment banking community in San Francisco. Mann called on biotech firms to join together in a marketing effort to attract more investment dollars. “I believe there needs to be a concerted effort by local companies to market themselves,” he said. Mann said many of these companies lack the sophistication to recruit backers and often are too busy with the job at hand to think about fund raising. “Companies have failed to market themselves effectively,” said Mann. “They’re not used to doing that and carrying on the work that they do.” John Simard, president and CEO of CTL ImmunoTherapies, said companies are hampered by the inability to get venture capital. He said some biotech firms in the area, many of which are struggling to keep going, are unable to grow as a result of the tough venture capital market. Mann said he has personally supported a number of biotech firms with badly needed cash investments, but he noted that his own efforts are but a drop in the bucket for a local biotech industry that needs billions in investment dollars. “We’re not all Amgen. We have to make do with what we have,” he said. Biotech firms, he said, must often count on a small group of venture capitalists who specialize in the field, since other venture capitalists are leery of investments in a field that could take 10 years or more, if ever, to realize a profit. “It’s a gamble, but it’s a gamble on helping benefit mankind,” he said. Another speaker, Stephen J. McCormack, president and CEO of AlleCure, pointed to other obstacles to building a strong biotech economy in the area. He said firms must also look to attract more college students, many of whom shun the biotech industry. “There’s a misconception about what biotech is all about,” McCormack said. “It’s not manufacturing and selling drugs. But developing and discovering new products.” AlleCure, based in Valencia, develops drugs for allergies and other immune-related diseases like asthma, rheumatoid arthritis and others. McCormack said that up until the 1980s, there had been no biotech industry to speak of, since pharmaceutical firms did their own research and development. But while the industry grew, it has managed to attract only a fraction of new college graduates that other segments of the tech industry have recruited. Mann underscored the importance of building a strong biotech industry, which he said holds the key to curing many diseases. “I fully believe that we’ll find a cure for cancer. I’m committed to finding the cure,” said Mann, whose CTL ImmunoTherapies Corp. is conducting ongoing research into skin cancer. Mann’s MiniMed Corp., which he sold last summer, helped develop a number of diabetes treatments including electronic glucose monitors and implanted insulin pumps.