Archive for the ‘Business Location’ category

Businesses Joined by Non-Profits in Leaving California for Friendlier States

September 21, 2017

Friends in economic development agencies and in the site selection consulting world have asked why I haven’t posted anything in quite awhile. My answer is simple: I’ve been exceptionally busy. It certainly isn’t because there aren’t things to write about.

Another question I’m usually asked is whether businesses are still leaving California.

They are, especially with the state legislature again failing to provide tax or regulatory relief to its home-state companies. Overall, taxes, fees and regulations have gotten worse. Such a difficult business environment, combined with grim treatment by local governments, have caused operating costs to grow faster in the San Francisco Bay Area and Los Angeles than in virtually every other metropolitan area in the nation.

So large corporations and small business entities – joined by non-profit organizations – continue to look for ways to partially or fully exit the state. Today alone brought two examples, which by coincidence both involve Nevada.

The first is a loss for Los Angeles with Virtual Guard, Inc. leaving the city’s Sherman Oaks section. The company plans to relocate its headquarters and interactive command and control center to Clark County (Las Vegas area), citing an “unfriendly economic environment” in California. The move is likely to occur later this year.

There, Virtual Guard  is expected to hire 80 new employees within its first two years of operations. The video monitoring company is also a developer and integrator of technology in the perimeter security sector and its solutions are being used throughout the United States and Canada.

California, which a long time ago was a haven for aerospace companies, will lose another one next year.

ERG Aerospace Corp. plans to relocate its Oakland operations to McCarran, Nevada and make the Silver State its headquarters. The company manufactures materials and components for the aerospace, national defense, semiconductor manufacturing, biotech and other high technology industries. The target date for the move is the second quarter 2018, with operations to commence in the same quarter.

Several months ago, a non-profit organization said it would relocate out of state, too. Horizon University, a private, Christian school that started classes in 1993 in San Diego is heading to Indianapolis.

Horizon’s President Bill Goodrich calls the decision “a no-brainer.” He said Indiana offers a “climate” that was slipping away in California, and by that he wasn’t referring to San Diego’s sunny days. Goodrich said that the university helps people “grow academically” while integrating the “strong biblical teachings and we find in Indiana, there’s an openness to that.”

The move will allow the, accredited university to grow on a 97-acre spread – in a state with less “red tape” – and attract more students.

Thanks to high costs, a sizeable non-profit move is upcoming: Toastmasters International will shift its headquarters from its birthplace in Orange County to Colorado.

With about 180 employees, Toastmasters CEO Daniel Rex said costs in California were a concern. “When you look at the availability of workers, when you look at the cost of commerce and real estate, this is something that makes sense.” The organization is spending $19.5 million to buy a building in Englewood, south of Denver. Toastmasters is a legendary California institution, founded in 1924 in Santa Ana. Since 1990 it’s been based in Rancho Santa Margarita.

Business people who endure the decline in California’s business climate and pervasive cost increases can take some comfort knowing that some non-profit brethren are members of the same club.

I’ll write moe about how California treats its commercial enterprises. But first let’s see how many business-helpful bills and business-damaging bills Gov. Jerry Brown will sign into law.

One focus of this blog has been to address California’s perennially difficult business environment. Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

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California Loss: Swiss Company Puts U.S. HQ in Phoenix, not San Francisco

June 9, 2016

The Kudelski Group, a Switzerland-based global technology company, has an office in San Francisco, but selected the Phoenix area for the location of its  350-job U.S. headquarters.

Arizona-StateSeal.svgAccording to the Phoenix Business Journal, “We wanted to be in a business-friendly environment,” said Richard Fennessy, CEO of Kudelski Security, the Group’s cybersecurity division. “The governor made it clear we’d find that (in Arizona).”

“We’re bringing our global finance, human resources, administration, legal and information technology divisions to Phoenix,” Fennessy said, which includes moving employees from Switzerland.

See the complete story at “EXCLUSIVE — Kudelski Security CEO: Phoenix made ‘best business case’ for HQ.”

One focus of this blog has been to address California’s perennially difficult business environment. Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

 

Orange County Register editorial: California stoking job growth – in the moving industry

May 29, 2016

Californiaocr R has earned quite a reputation for being openly hostile to business, as confirmed by numerous studies and surveys. Its plethora of taxes and regulations are driving away legions of entrepreneurs and workers, but they are doing wonders for one segment of the economy: the moving industry. It is almost as though that industry is secretly lobbying the state Legislature for its anti-business policies.

Joe Vranich, as president of Spectrum Location Solutions, an Irvine business relocation consulting firm, knows all about what drives businesses’ decisions to give up and leave for greener pastures.

See more of the editorial, which contains quotes from company CEO’s, here.

One focus of this blog has been to address California’s perennially difficult business environment. Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

Cities With ‘Top Talent’ Win in Business Location Decisions

April 14, 2016

Today’s Wall Street Journal carries an excellent story about the challenges companies face in finding locations that have employees with the proper skills. In my experience, talent availability is the top consideration in selecting communities as destinations for relocating or expanding companies.

US Map in BlueI received an email summarizing the story from Andy Levine, President and Chief Creative Officer of Development Counsellors International in New York. Its such a good digest that I’m passing it along (with his permission, of course) here:

“Firms Flock to Cities with Top Talent” is the headline of an article in today’s Wall Street Journal by reporter Lauren Weber.

For Salesforce and Cisco Systems, two companies profiled in the article, recent location decisions focused on a simple question: Where can we find the right talent? The article suggests companies are using new data sets to answer this increasingly important question:

  • A new tool called LinkedIn Economic Graph to identify the locations of potential job candidates with targeted skill sets
  • A close look at four-year universities and high-quality community colleges with relevant majors that can serve as feeder systems for a specific labor force
  • Review of online job ads to assess supply and demand for specific positions

In an interesting reversal, one unnamed aerospace company used “troves of resume and other data” to identify cities that had relevant workers with migration patterns that suggested a willingness to relocate for new job opportunities. They then spent their recruitment budget seeking to woo candidates from these talent-rich cities to their location in Seattle.

Read the full WSJ article here.

I thank Andy at Development Counsellors International, whose site is here.

One focus of this blog has been to address California’s perennially difficult business environment. Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

 

No Surprise: Small Businesses Unhappy in California

March 17, 2015

Based on a new survey, 20 percent of small businesses in California are considering leaving the state. Today, the Orange County Register published an editorial on the topic, which concluded: “When one-in-five small businesses express a desire to leave the state, it is time to admit that there is a problem with California’s business climate.” Yours truly is gratified to have contributed to the article. See more at “Survey: Don’t go West, small businesses.”

One focus of this blog has been to address California’s perennially difficult business environment. Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

Onshoring: Ford Shifts Some Manufacturing from Spain & Mexico to Cleveland Area

March 9, 2015

The Ford Motor Co. branded an engine EcoBoost, a name designed for a motor that reduces fuel consumption and emissions. However, when it comes to Northeast Ohio, EcoBoost could also mean “Economy Boost” as Ford moves production from Spain and Mexico to the region.

An official from the Federal Reserve Bank of Cleveland recently said the city is enjoying a genuine economic turnaround — a view that the Cleveland Plain Dealer said was a “strong message of optimism” they’re not used to hearing.

Mark Schweitzer, a senior vice president at the bank, noted that Cleveland’s economic performance today is healthier than in the last decade and a key for the future will be the ability of businesses to be innovative and develop new products.

Ford is doing its part by shifting production of EcoBoost engines for North America from Valencia, Spain to its plant located in Brook Park, a Cleveland suburb.

This is the first time the technologically advanced engines are being produced in the United States; they will be used in the all-new Ford Edge, Mustang, Explorer and Lincoln MKC.

Starting in 2013, Ford invested nearly $200 million and added 450 jobs at the plant to support production for the EcoBoost. The facility also builds other engines.

The Plain Dealer reports: “Officials say the surviving plant’s 1.7 million square feet are fully in use now, with more than 1,300 workers…. Elsewhere in Northeast Ohio, Ford is shutting its plant in Walton Hills but investing $168 million in Avon Lake to take over production of F-650 and F-750 trucks from Mexico.”

For some time now, the Northeast Ohio region has seen employment growth in sectors such as biomedical, professional, scientific and technical services. Also, aerospace represents a significant cluster in the region.

The area’s manufacturing sector has expanded somewhat in the last couple of decades — growth that will be boosted further by the onshoring of EcoBoost production to Ohio and upcoming nearshoring work from Mexico.

Sources:

Plain Dealer: “Cleveland is enjoying economic revival, Fed official says, while nation overall continues to rebound”

Plain Dealer: “Ford in Brook Park now making four-cylinder EcoBoost engines”

Company news release: “Ford Cleveland Engine Plant Begins Production….”

Team NEO (Northeast Ohio): “January 2015 Quarterly Economic Review: Northeast Ohio’s Economy Diversifies”

One focus of this blog has been to address California’s perennially difficult business environment. Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

 

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.

One focus of this blog has been to address California’s perennially difficult business environment. Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.