Following upheaval within the ranks of Molina Healthcare, a Fortune 500 company and one of the largest employers in Long Beach, the Long Beach City Council last week voted to create a business support team to “attract and retain” the firm’s operations and services within the city.
As directed by the council, the city manager is now tasked with assembling a business support team made up of “county and state agencies, business leaders, economic development officials and Molina Healthcare executives.”
In May, the founder’s sons, Dr. Mario Molina and John Molina, were ousted by the company’s board of directors from their positions as CEO and CFO, respectively, although both retain board positions. The Molinas have deep roots in Long Beach, where the firm was started, and are known for involvement with local entitles such as the Aquarium of the Pacific.
When the Business Journal spoke with a Molina Healthcare representative in March, she indicated that the company had about 10,000 people employed in the city. Earlier in the year, news surfaced that 400 employees were slated to be moved from Long Beach to an office in San Pedro, but spokesperson Sunny Yu told the Business Journal that she believes that move is on hold for the moment.
Yu did not address questions about the city council’s action or about the company’s future plans in Long Beach, including whether more employees or operations might be moved, saying that the company had no comment.
Sixth District Councilmember Dee Andrews brought the item forward in part because many residents of his district are employed by Molina Healthcare, his chief of staff, John Edmond, said at the council meeting. While he said there have been assurances that the company has no intention to leave the city, he pointed out that when shakeups occur in any company, offers are often made to buy it.
Mayor Robert Garcia said he met with the Interim CEO Joseph White on July 10 and that White was clear that Molina Healthcare is “100% committed to Long Beach.” Garcia told White the city is 100% committed to the company, as well.
Seventh District Councilmember Roberto Uranga took issue with the motion, arguing it would mean spending public money and resources on a private interest when that company had not even asked for assistance. He said that forming a business retention team and perhaps offering incentives “starts a slippery slope where we have other businesses wanting that same assistance.”
Eighth District Councilmember Al Austin also expressed concern, noting that he worked in the aerospace industry in 1995 when the city formed a “red team” to retain about 10,000 industry jobs in the area. “Since then, several red teams have been established. Boeing went from number one employer here in Long Beach. Now they’re number seven,” he said, gesturing at a PowerPoint presentation identifying the employer as such. “And I’m not even sure they are number seven anymore.”
Austin continued, “Private companies are loyal to one thing, and that is their profits. And I am going to end my comments with that because I have experience. I have seen 40,000-plus jobs leave Long Beach, and we had the same model in place to keep it in place. So I am not trying to turn my back in any way on the employees and the good people of Molina Healthcare. . . . I support the jobs here. But I want to make sure that we are smart with how we direct our staff and our resources.”
Vice Mayor Rex Richardson expressed his full support of Andrews’ motion, as did Councilmembers Lena Gonzalez and Jeannine Pearce. Richardson expressed concern that the council would not come across as unified on the matter. Uranga said he took offense to that and that he was not trying to divide the council.
Austin made a substitute motion to instead create a resolution expressing the city’s support of Molina Healthcare, which only he and Uranga voted in favor of. Andrews’ original motion then passed unanimously with all nine councilmembers in favor.