Archive for December 2015

Another California Company to Expand Big Time – in Texas

December 23, 2015

Breaking news from the Austin American Statesman:

Oracle Corp. will build a huge, new corporate campus on 27 acres in Austin. With the new campus, Oracle plans to grow its Austin workforce by 50 percent over the next few years. The move expands the presence of another rapidly growing California-based technology giant in Central Texas, as companies including Apple Inc., Google and Facebook are aggressively ramping up their workforces there.

Seal_of_Austin,_TXIn addition to its new 560,000-sq. ft. campus, the deal also includes a adjacent 295-unit luxury apartment complex that will be a housing option for Oracle employees. Scott Armour, senior vice president of Oracle Direct, the firm’s cloud sales organization, said, “Our state-of-the-art campus will be designed to inspire, support and attract top talent – with a special focus on the needs of millennials.”

Jobs at the new campus will be primarily sales-oriented, lead qualification, prospecting and technical support. Founded in 1977, Oracle, one of the world’s leading software companies, is based in Redwood City in San Mateo County.

See the full story at: Shonda Novak and Lori Hawkins, Software giant Oracle to build major Austin campus, add employeesAustin American Statesman, Dec. 22, 2015

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One focus of this blog has been to address California’s hostility toward business, as addressed in the new study, California Business Departures: An Eight-Year Review 2008-2015 issued on Dec. 31, 2015.

Joseph Vranich is known as the Business Relocation Coach while the formal name of his business is Spectrum Location SolutionsJoe helps companies find great locations in which to grow. He offers an introductory consultation at no cost to help company leaders understand the Site Selection process and to explore whether a project makes sense. See a summary of the process under “The Three Phases of a Location Project” at Why Get Help.

Joe also is a keynote speaker on the benefits of businesses relocating out of high-tax, high-cost, over-regulated states to friendlier business environments. More information is available at Biography and Speaking Availability. On Twitter, Joe is known as@LocationConsultant.

Good Choice: Faraday Nixes California, Selects Nevada for $1B Manufacturing Plant

December 10, 2015

The Los Angeles Times headline said, “Electric car startup Faraday Future picks Nevada over California to build plant.” I’ll go further and say that the electric-car maker made an excellent decision to locate its new manufacturing facility in the Silver State.

North Las Vegas City SealIt’s been fairly well known that Faraday Future had been searching for a location for its first U.S. factory. It was natural to consider California considering that the company is headquartered in the state, a number of California-based Tesla employees were lured to the company, and some shipping will probably occur through the Ports of Los Angeles and Long Beach.

However, after Faraday Future also considered Nevada, Louisiana and Georgia, the company selected a site in North Las Vegas for the $1 billion facility.

Faraday Future Factory Design

The venture is backed by Jia Yueting, a Chinese billionaire, entrepreneur, and founder and CEO of Beijing-based holding company LeTV.

The company and its products have been called “mysterious.” In an unusual take on the story, Matthew DeBord, Business Insider’s transportation editor, wrote, “Faraday Future could be building … anything. An electric car. An infotainment system. A self-driving electric car. A self-driving electric car with an infotainment system. Or … not even a car! Maybe a self-drivingelectric-car-sharing service!” See more at Everything about Tesla competitor Faraday Future is strange and confusing.

A company news release states:

We plan to construct something more than an ordinary ‘assembly line’ – we’re creating a 3 million square foot workshop for passionate creators and diligent visionaries, where new concepts will be refined and implemented; where new discoveries will be conjured and crafted; and where new possibilities can be made, well, possible. After we get this manufacturing plant up and running, we will be directly staffing it with 4,500 new jobs. These positions will include a wide variety of professional and manufacturing employment opportunities, offering competitive pay and benefits.

Yes, that is a bit confusing. In any event, there are several reasons why I believe this was an excellent decision.

  • A California manufacturer can save between 20% and 35% in operating costs, depending upon which state it relocates to and what products it makes.
  • From a workforce standpoint, any challenge in recruitment should be eased by several factors. First, military people have excellent work habits, and nearby Nellis Air Force base offers a steady stream of potential employees as people leave the military. Also, workers can afford to buy homes in the Las Vegas area that on an equivalent basis would be far costlier in California, so potential home ownership is a lure for those willing to relocate. Finally, to the degree training is needed for Nevada residents, Gov. Brian Sandoval will ask lawmakers to develop a new job-training program through the Department of Employment, Training and Rehabilitation.
  • Airline service out of Las Vegas is outstanding in number of destinations served, frequency of flights and extent of non-stop services.
  • Being near I-15 and the planned new Interstate highway, I-11, and the extension of a Union Pacific Railroad line – as well as proximity to that well-served airport – all offer advantages from a freight logistics standpoint.
  • Finally, the company hopes to leverage Las Vegas tourism to offer tours of its plant, which seems like a smart marketing move.

The Wall Street Journal reported that “Faraday’s plan is to break ground on the plant in early 2016 and begin production sometime in 2017. It is considering a rebuild of an existing factory or building a new plant from the ground up.”

According to the Las Vegas Review-Journal, Faraday has been described as an international team with employees in 40 countries, a facility in suburban Los Angeles and other offices in Beijing and Dusseldorf, Germany.

When it comes to evaluating and deciding on a location for a new factory, somebody at Faraday Future knows what they’re doing.

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One focus of this blog has been to address California’s hostility toward business, as addressed in our study, Businesses Continue to Leave California – A Seven-Year Review, issued in November 2015.

Joseph Vranich of Spectrum Location Solutions helps companies find great locations in which to grow. He offers an introductory consultation at no cost to help company leaders understand the Site Selection process and to explore whether a project makes sense. See a summary of the process under “The Three Phases of a Location Project” at Why Get Help.

Joe also is a keynote speaker on the benefits of businesses relocating out of high-tax, high-cost, over-regulated states to friendlier business environments. More information is available at Biography and Speaking Availability. On Twitter, Joe is known as @LocationConsultant.

Top Destination for California Company Relocations: Texas

December 9, 2015

Today, the Dallas Morning News published a big spread online about businesses migrating from California to Texas. The story is based on our new study of 9,000 companies leaving California in the last seven years “with about 15 percent finding a home in the more business-friendly Lone Star state.” (The print version will appear sometime next week.)

California FlagExcerpts:

“This report echoes what businesses that relocate to Texas continue to say – they are sick and tired of being over-taxed and over-regulated and are making the economically sensible choice to move to Texas,” said John Wittman, deputy press secretary for Texas Gov. Greg Abbott’s Office.

Texas Flag“Texas is an easier place in which to conduct a business,” said Joseph Vranich, president of Spectrum Location Solutions in Irvine, Calif. “Why is that so? A lot of people think it’s taxes, but in my view the No. 1 benefit is an easier regulatory environment. California’s regulatory regime is so harsh that it causes companies to look at all kinds of states to go to.”

California … is one of the costliest states in which to do business, with expenses 20 percent to 35 percent higher than other states, Vranich says.

Of all U.S. cities, Austin was No. 1, gaining 86 California corporate sites or expansions. Dallas ranked sixth (20 companies), San Antonio was No. 8 (16), Houston was No. 11 (11), Plano and Irving tied with Hillsboro, Ore., for No. 13 (9) and Fort Worth tied with Tempe, Ariz., for No. 14 (8).

The online version has a drop-down menu that permits searches by year, company, city, industry and product/service.

See the full Dallas Morning News story here.

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One focus of this blog has been to address California’s hostility toward business, as addressed in the new study, Businesses Continue to Leave California – A Seven-Year Review, issued in November 2015.

 Joseph Vranich of Spectrum Location Solutions helps companies find great locations in which to grow. He offers an introductory consultation at no cost to help company leaders understand the Site Selection process and to explore whether a project makes sense. See a summary of the process under “The Three Phases of a Location Project” at Why Get Help.

Joe also is a keynote speaker on the benefits of businesses relocating out of high-tax, high-cost, over-regulated states to friendlier business environments. More information is available at Biography and Speaking Availability. On Twitter, Joe is known as@LocationConsultant.

 

IBD: ‘High-Tax California Still Losing Thousands Of Businesses’

December 2, 2015

Investor’s Business Daily, citing our latest study, begins an editorial by stating, “To hear its media and political elites tell it, California is back on its golden path to long-term prosperity. But a new study suggests the state will suffer as thousands of businesses flee. Both can’t be right.” A few excerpts from the editorial:

IBD Graph Nov 2015 editorial with borderAs America’s most populous and wealthy state, California, has a lot going for it. But a new study from business location consultant Joseph Vranich suggests it is hemorrhaging both businesses and jobs at an alarming rate — even as it remains home to an estimated one-third of the nation’s welfare recipients.

“In California, costs to run a business are higher than in other states and nations — largely due to the state’s tax and regulatory policies — and the business climate shows little chance of improving,” Vranich writes.

The study is impressive for its size — nearly 300 pages — and thoroughness. Vranich focuses on what he calls “California divestment events” — decisions by homegrown businesses to move elsewhere or not to expand in-state, plus non-California firms that changed their minds about coming.

Vranich counted some 1,510 such events from 2008 to 2014 and says that figure probably undercounts actual divestment by a factor of 5-to-1. So the real level is likely somewhere north of 9,000….

In some areas today, including Los Angeles, it’s nearly impossible to build a manufacturing facility because of environmental concerns. So those jobs go elsewhere — to low-tax, pro-business Texas, Nevada, Idaho, Utah, Oregon, the Deep South and, increasingly, to foreign countries including Mexico, China and India. …

[Voters would] be much better off if they stopped listening to progressive politicians who are systematically ruining the state and started listening to those more in tune with economic reality. Like Joe Vranich.

See the complete editorial here.

One focus of this blog has been to address California’s hostility toward business, as addressed in the new study, Businesses Continue to Leave California – A Seven-Year Review, issued in November 2015.

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