HRE Performance Wheels execs call California costly -- but worth it

Executives at HRE Performance Wheels, which manufactures premium rims for racing teams and for luxury and sports-car aficionados in its Vista factory, say that the costs of doing business in California are constantly rising.

But the company is convinced that California is the place to be.

“California is the largest center in the world in terms of automotive passion and consumption,” said HRE co-owner and chief executive Chris Luhnow.
While many U.S. companies have outsourced their manufacturing to states that are considered more business-friendly or to cheaper overseas locations, like China, HRE executives say the company would likely suffer if it was moved out of the state.

PHOTOS: Made in California, HRE Performance Wheels

“People always ask, ‘Why don’t you move to Nevada or somewhere else?’” Luhnow said. “It would just be disruptive to try to move it. Our job is to figure out how to stay here and make money and be here for the next 20 years.”

HRE President Alan Peltier said that one thing that would be impossible to replace is the California’s pool of creative business thinking and its engineering talent.

“Our business requires a lot of hands-on manufacturing and hands-on sales,” Peltier said. “You need quality people for that. It’s hard to find people in places where the quality of life isn’t as great as California.”

He added: “If we were to move out of Southern California, basically there would be a brain drain on the business.”

HRE Performance Wheels manufactures so-called monoblock, or one-piece, and three-piece forged wheel sets that range in price from $3,000 to $20,000. The latter is the retail cost for the company’s latest line of carbon-fiber and aluminum wheels.

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