Cavco loses $3 million manufacturing contract

The Santa Monica, Calif., City Council has canceled a $3 million contract with a Phoenix-based maker of manufactured homes to protest Arizona's new immigration law, even though it will likely cost the city more money.

The decision was made even after a judge suspended most of the law pending appeals.

Lawmakers in the beachfront city voted 6-0 to not buy $3 million worth of manufactured homes from Cavco Industries Inc. The city staff had determined after a year and a half that Cavco's bid was the "clear first choice" and "most responsive."

The homes were needed for the city-owned Mountain View Mobile Home Park, where residents have been waiting for years to get their old travel trailers and mobile homes replaced.

Santa Monica's housing and economic-development department determined that a joint proposal from Cavco and Los Angeles-based Marmol Radziner Prefab was the best of seven it received, according to a city report.

Even though the Santa Monica City Council voted in May to boycott Arizona, the department still recommended that Cavco and its partner get the contract. Department officials estimated it would cost $250,000 to $450,000 more to buy the homes from another manufacturer because the other bids were higher. And the residents, who have to put up some money, could end up paying more, too.

Nevertheless, the council stuck with the boycott, which will force the city to go to the open market to buy the housing.

"I think we really did mean to send a serious message to the state of Arizona," Councilman Kevin McKeown said at the Aug. 10 meeting, according to the Santa Monica Daily Press.

Joe Stegmayer, chairman, president and CEO of Cavco, said he was disappointed but that there wasn't anything he could do.

"We have 200 people at the plant that were to produce those units, and they clearly will not have as many hours," he said. Cavco also might have added employees.

But Arizona is still scoring some deals.

Niagara Bottling LLC announced Tuesday that it was going to invest $35 million and open a bottling facility in Phoenix and hire 63 people.

The company is from Ontario, Calif. California is the state where about half the cities and counties that are boycotting Arizona are located.

by Betty Beard The Arizona Republic Aug. 27, 2010 03:44 PM



Cavco loses $3 million manufacturing contract