Archive for September 2014

California’s ‘Score’ for Business Deteriorates

September 12, 2014

Down again.

That’s what we can say about California’s “business attractiveness” as it lost its tenth place ranking in a survey of site consultants, published yesterday by Area Development Online. Here is what Editor Dale Buss had to say about the state losing the ranking it had in last year’s survey:

“The state’s reputation with site consultants keeps taking hits — witness Toyota’s announcement earlier this year that it plans to move its corporate headquarters and 4,000 jobs to suburban Dallas from southern California. And so this year, California placed in the top states in only three of the 18 sub-categories, notably ranking third for access to capital and project funding, no doubt a legacy of the continued success of Silicon Valley.”

The new survey was interesting in other respects, too, in that Georgia took over the top spot, with Texas moving to second place. States in the South and mid-South dominate the list because of their continuing momentum in business development. Also, some states in the Midwest “are scratching their way back into position as major players in the U.S. economic-development derby.”

Area Development did an excellent job explaining the survey’s findings. For the story, along with state profiles, see “Top States for Doing Business 2014: Georgia Unseats Texas, Industrial Midwest Rises.”

The finding should unnerve California business leaders because site selectors surveyed over the years by the publication have been kind to California – especially when compared with other surveys that usually portray conclusions that are less kind.

I would be remiss if I failed to remind business owners and corporate leaders that this year Chief Executive magazine found California to be the “worst state for business” — for the tenth year in a row. CEO’s comments include: “California could hardly do more to discourage business if that was the goal.” “The state regulates and taxes companies unreasonably.” “California is getting worse, if that is even possible.”

Moreover, CNBC’s 2013 “Top States for Business” scored states on 51 measures of competitiveness, weighted states based on other criteria, and found California ranked low at 47.

As if that weren’t enough, 24/7 Wall St. ranked California 50th in its evaluation – for the third year in a row.

Incidentally, after reading the Area Development story, the next item to pop up on my news screen was headlined, “California Rocket Company Moving to Texas.” Turns out Firefly Space Systems of Hawthorne will relocate its headquarters to Cedar Park, near Austin, where it will hire up to 200 workers, mostly highly paid engineers. It will develop rocket engines in collaboration with the University of Texas.

Twenty-five years ago California was among the best states for business. Sadly, it’s lost that distinction, and I expect little improvement in the business climate. When I consider the strength of business-hostile interest groups, the attitudes of elitist voters along the coast, and Gov. Jerry Brown surrounding himself with business-clueless advisors, I see more regulations and higher taxes in the future for California businesses.

Joseph Vranich of Spectrum Location Solutions, based in Irvine, California, helps companies find optimal locations in which to grow. Joe also is a keynote speaker on the challenges and benefits of business owners relocating out of high-tax, high-cost, over-regulated states. More information is available at Biography and Speaking Availability.

© Excerpts from this blog may be used, but only if attribution is given to “Joseph Vranich of Spectrum Location Solutions in Irvine, Calif.”

It’s official: Tesla selects Nevada for its ‘Gigafactory’

September 5, 2014

Elon Musk, Chairman and CEO of Tesla Motors, announced today that the company has selected Nevada in which to locate its $5 billion battery Gigafactory. The company’s news release is here.

Why Nevada over California? Well, for a few insights about that question, see the Oakland Tribune editorial published today, “Tesla’s Reno deal is another example of California’s bad business climate.”

I’ve had the pleasure of working with representatives in Nevada — in the Governor’s Office of Economic Development and the Economic Development Authority of Western Nevada. These are some great people and I’m sure they’ve worked hard on this project. I presume they will participate in a well-deserved celebration tonight.

Joseph Vranich of Spectrum Location Solutions helps companies find great locations in which to grow. Joe also is a keynote speaker on the challenges and benefits of businesses relocating out of high-tax, high-cost, over-regulated states. More information is available at Biography and Speaking Availability.