The Pain of the Squeeze : Rockwell and the City of Anaheim work toward a survival strategy

Fortunately, a Rockwell International executive’s suggestion that the firm might be forced to leave Anaheim if the city raised its utility rates turned out to be a hollow threat. Rockwell this week quickly issued a disclaimer, saying it had no plans to leave.

But the incident raised important issues facing cities throughout the state as they try to meet the demand for services even as they watch revenues shrivel.

Businesses, of course, must pay their fair share to keep their host cities viable. But, as many cities have learned, if pressed too far, firms will head for lower-cost states or even out of the country.

It takes wise city councils to distinguish between a firm that is bullying and one that legitimately needs help in order to keep valuable jobs at home.

The controversy in Anaheim arose when the City Council announced it would ask voters to approve the transfer of up to $9 million from its Utility Department to its depleted general fund.

It’s true that Rockwell--with 4,000 employees Anaheim’s second-largest employer, after Disneyland--may have jumped the gun by assuming the city would raise utility rates to make up the difference. But it was dead right to conclude that the city would have to make up the money somehow, and utility rates seem a likely target.

Indeed, robbing Peter to pay Paul has become a fact of life in Anaheim, Los Angeles and most other cities. The state’s current budget crisis isn’t expected to make things easier.

To its credit, Anaheim has shown a willingness to work with businesses in order to keep them. For example, Anaheim made a valiant but failed attempt to keep a 105-employee TRW Inc. unit in the city rather than see it move to Texas. Nearby Orange had more success in inducing TRW to keep its 1,000-employee credit reporting division in that city.

Working with business to retain jobs is an increasingly important role for city councils. But it isn’t easy in these hard times, when cities sometimes must decide just how far to squeeze businesses without squeezing them to death.