10 SAN FERNANDO VALLEY BUSINESS JOURNAL SEPTEMBER 3, 2018 Tariffs Raise Input Prices for Valley Manufacturers tatives from Lockheed Martin and Congressman TRADE: Chief executive Steve Knight (R-Palmdale), who serves on the urges letter-writing to House Armed Services Committee. Knight took his turn in a F-35 mobile cockpit demonstrator lawmakers for relief. on display by Lockheed at Crissair in Valencia. “The fifth-generation capabilities of the hen it comes to the tariffs imposed F-35 are essential to our ability to combat 21st by the Trump Administration, Rich- century threats,” Knight said in a statement. “I ard Brent is not shy about express- take great pride in having the opportunity to W th ing his opinion. recognize the workers in the 25 Congressional “Tariffs are crazy, and retaliation is nuts,” said District who are an important part of making it Brent, chief executive of Louroe Electronics, a a reality for our Armed forces and our allies.” Van Nuys maker of audio surveillance equipment. Small manufacturers in the Valley and Fast-Growth Companies throughout the U.S. may agree with Brent’s as- Multiple manufacturing and technology com- sessment of the decision panies in the San Fernando, Santa Clarita and by the White House to Conejo valleys were included on this year’s Inc. impose tariffs starting in 5000 list of fastest-growing private companies. January on solar panels Arctic Mission: Congressman Steve Knight pilots F-35 flight simulator in Valencia. Among those recognized for their growth and washing machines over a three-year period was Faye Business and later steel and the company’s steel costs have risen more than minimize any impact could be helpful. Al- Systems Group, a Woodland Hills technology aluminum from China, 22 percent this year. though he works in the security industry, Brent consulting and software company. The company , and the The increase is due to the tariffs and a said he didn’t think Louroe’s products warrant- made it on the list for a fifth consecutive year. European Union. Those requirement that all steel must be sourced from ed a special exemption from the tariff. “It’s a great honor to have made the Inc. countries in turn have U.S. companies. Timely has had a long-term 5000 list for the fifth year in a row,” said Chief placed tariffs on imports relationship with USS POSCO, a joint venture F-35 Supplier Award Executive David Faye. “Earning another spot MANUFACTURING from the U.S. China’s between U.S. Steel and POSCO, in South Korea. Crissair Inc. was recognized Aug. 21 with on this amazing list continues to be a real tariffs equal about the “What has led to an increase in steel cost a 2017 Elite Supplier Award from Lockheed source of pride for us.” & TECHNOLOGY $34 billion tariff im- has been the did not have the Martin Corp. for its work on the F-35 Light- Also included on the list were ZPower Mark R. Madler posed on it by the U.S. capacity to keep up with the demand and ning II military jet. The Santa Clarita aerospace LLC, a developer of rechargeable silver zinc For Louroe, the tar- needed to gear up more blast furnaces which parts manufacturer makes 30 different fluid microbatteries at No. 82; SolaRack in Thou- iffs will increase costs on capacitors, transform- takes months to get online,” Manzo wrote in an control components used on the stealth fighter. sand Oaks, a manufacturer of solar racking ers and some circuit boards used in the audio email to the Business Journal. Company President Mike Alfred said it equipment at No. 383; information technology capture equipment the company makes. For The next step for Brent is to get letters was an honor to recognize the work of the services provider JKL Technologies Inc. in example, Brent said, a capacitor that had cost a out to area lawmakers. Louroe is located in nearly 200 employees on the world’s most Newbury Park, at No. 2186; IT consulting and nickel now will cost 6.5 cents. While not a huge the district of Congressman Tony Cardenas advanced fighter jet. private cloud hosting firmISSquared Inc. in leap, it does add up, Brent said. (D-Panorama City) while Brent lives in the “The men and women who make up this Newbury Park, at No. 2991; and Bioluz LED, “We use enough of them that it will have a district represented by Congressman Brad company embody the very values upon which it a Woodland Hills manufacturer of LED lighting small impact on the cost of the hardware,” he Sherman (D-Sherman Oaks). was built: hard work, dedication and, most impor- products, at No. 3360. added. He said that a letter outlining specifically tantly, a shared commitment to the success of our Tom Manzo, president of Timely Prefin- what products will be subject to the tariff and clients and customers,” Alfred said in a statement. Staff Reporter Mark R. Madler can be reached ished Steel Door Frames in Pacoima, said that asking the congressman what they can do to Invited to attend the ceremony were represen- at (818) 316-3126 or [email protected].

Assets: Suit disputes Franchise Court Battle the ownershp of 35 Ms. Stewart’s misguided leadership, the fran- Applebee’s locations. : Dine Brands’ chisor quickly lost touch with the Applebee’s lawsuit alleges $23 million brand, with key positions either left unfilled for years or filled by newcomers without relevant owed in operating fees. industry experience or a clear sense of Applebee’s roots,” RMH wrote in the filing. fter Applebee’s second largest franchi- RMH went on to blame Applebee’s introduc- see RMH Franchise Holdings Inc. filed tion of upscale menu items and expensive wood- A for bankruptcy protection in May, Ap- fired grills for increasing costs and hurting sales. plebee’s parent company, Glendale-based Dine The company also pointed to Dine Brand’s Brands Global Inc., sued to prevent RMH high-profile marketing campaign for IHOP’s from liquidating its restaurants. new burgers as damaging the Applebee’s brand Dine Brands, which also owns the IHOP and eating into Applebee’s burger sales, which it chain, alleges that Nebraska-based RMH is said account for 16 percent of revenue. also on the hook for more than $23 million “Finally, adding insult to the injury, the in damages stemming franchisor announced on June 11, 2018, from unpaid royalty that it intended to rebrand IHOP to become fees and improper ‘IHOb’—the ‘b’ standing for ‘burgers,’” the store closures. It seeks filing reads. “Yet much of the recent Apple- to terminate RMH’s bee’s advertising campaign — for which there’d be any way to prove causation.” fast-food industry nationwide. This is a major franchise rights to Dine Brands asked Applebee’s franchisees to RMH’s bankruptcy proceedings and the step forward in achieving that goal, but we’re Applebee’s locations in pay for an increased portion of the bill — is pending litigation with Dine Brands are not done. Other fast-food companies that use no- Arizona and Texas and focused on advertising burgers.” ongoing. reported that poach provisions are now on the clock to accept take control of the 35 In an interview with Business Insider, RMH’s parent firm,Acon Investments LLC, a similar deal or face litigation from my office.” locations. Applebee’s President John Cywinski denied plans to accept bids on the franchisee’s assets In addition to Dine Equity, Church’s RMH owns more the IHOP campaign had affected Applebee’s at the end of September. Chicken, , Jamba Inc., Little RETAIL & 146 Applebee’s franchises, pointing to a 5.7 percent increase in Caesar Enterprises Inc., HOSPITALITY restaurants in 15 states, comparable same-store sales last quarter. ‘No Poach’ Demise and Sonic Drive-In will remove no-poach accounting for nearly 8 “We have fundamentally different oc- In an agreement with Washington State At- language from worker contracts. In July, seven Ethan Varian percent of all Apple- casions that we target,” he said. “From my torney General Bob Ferguson, Dine Brands other chain restaurants agreed to stop enforcing bee’s locations. perspective, from a Dine Brands standpoint, restaurant chains IHOP and Applebee’s agreed no-poach provisions. They include Arby’s, In June, RMH filed a counterclaim in that’s a win-win, and not a concern at all for to end their policies of prohibiting employees Auntie Anne’s, Buffalo Wild Wings Inc., bankruptcy court alleging Dine Brands’ poor me or our franchisees.” from moving from one restaurant franchise to Carl’s Jr. Restaurants, and Jimmy management and ill-advised promotional David Henkes, an analyst at foodservice another. John’s Franchise. campaigns caused sales to drop. In the claim, consulting firmTechnomic Inc., agrees with The move follows an investigation led by Ferguson said he will continue to investi- RMH cited the company’s move from Kansas Cywinki’s assessment. Ferguson in January into so-called “no poach” gate restaurants that use no-poach contracts and City to Glendale along with the hiring of “It’s very hard to see a link between the contracts, which critics say limit worker mobil- is prepared to file complaints against compa- former chief executive Jill Stewart in 2014 as IHOb campaign and some challenges with ity and depress wages. nies who fail to come to come to an agreement. catalysts for the downturn. sales at Applebee’s franchisees,” Henkes told “Businesses can’t rig the system to avoid “As a result of this exodus, resulting in a the Business Journal. “Consumers have nearly competition,” said Ferguson in a statement. Staff Reporter Ethan Varian can be reached at massive loss of institutional knowledge, and infinite options for burgers, and I’m not sure “My goal is to eliminate no-poach clauses in the (818) 316-3130 or [email protected].