Archive for the ‘Businesses leave California’ 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 more 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.

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Another Company Moves Headquarters Out of California – This Time it’s Irvine

February 11, 2017

AutoAlert, an Irvine, Calif.-based tech firm, announced today that it’s planning to relocate its headquarters to Kansas City, Missouri. The firm offers automotive software tools for management and communications.

missouri-state-sealWith plans to create 300 area jobs in coming years, AutoAlert CEO Mike Dullea said, “Our company is raising the bar to bring high paying tech jobs right to the heart of Kansas City. AutoAlert’s Kansas City headquarters will be operational in the spring of 2017. It seems the company is wasting no time in heading to the Midwest.

The firm will maintain an office in Irvine, the size of which is unspecified.[1]

“Just got off the phone with the CEO of AutoAlert,” Missouri Gov. Eric Greitens said in a release. “We had a great conversation. He told me that because of new policies like Right to Work, which show our commitment to growing our economy, they are excited to bring their business here and create jobs. This is what you sent me here to do, and I’m proud to say that we are getting results for you.”[2]

Dullea said, “As a tenured CEO I have never received such a personal call from a governor to thank me. The efforts and words of Governor Greitens say a lot about him and the type of leadership we can expect to see moving forward.”[3]

[1] Source: Bobby Burch, “Cali tech firm AutoAlert to create 300 Kansas City jobs, Startland, Feb. 10, 2017 http://www.startlandnews.com/2017/02/cali-tech-firm-autoalert-relocates-kc-creating-300-jobs/

[2] Source: Rob Roberts,”California tech firm will move HQ, create 300 jobs in downtown KC,” Kansas City Business Journal, Feb. 10, 2017 http://www.bizjournals.com/kansascity/news/2017/02/10/california-tech-firm-moving-hq-creating-300-jobs.html

[3] “AutoAlert Corporate Office to Move: Will Expand to Downtown Kansas City, Mo.,” news release, Missouri Department of Economic Development, Feb. 10, 2017 https://ded.mo.gov/content/autoalert-corporate-office-move-will-expand-downtown-kansas-city-mo

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One focus of this blog has been to address California’s 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.

To Business Owners: Keep a Low Profile When Leaving California

January 25, 2017

Time and again I’ve encouraged smaller companies planning to escape California’s business-hostile environment to avoid publicly discussing their move. What follows is the story of an honest business owner expressing his legitimate concerns about operating in the state – and the unfortunate blowback that resulted.

city-of-los-angeles-sealHouman Salem, who owns a small apparel design and manufacturing business, wrote in the Los Angeles Times that higher labor costs are forcing him to leave California for Nevada. His article contained common sense, non-incendiary views:

“The biggest reason [to relocate] is the minimum wage, which will rise to $15 by 2021 in the county and by 2022 statewide. I write with some hesitancy, because I’m in no way an opponent of higher pay. When you have a company with fewer than 50 employees, you get to know them pretty well and have a genuine concern for them as individuals. But that has to be balanced with concern for keeping your clients, who can always take their business to other countries or states.”

He added, “When the $15 minimum wage is fully phased in, my company would be losing in excess of $200,000 a year (and far more if my workforce grows as anticipated). That may be a drop in the bucket for large corporations, but a small business cannot absorb such losses. I could try to charge more to offset that cost, but my customers – the companies that are looking for someone to produce their clothing line – wouldn’t pay it. The result would be layoffs.”

The reaction on social media was one of rage rather than reflection, according to Michael Saltsman of the Employment Policies Institute, writing in the Orange County Register:

“Good riddance,’ said one of the top comments on Facebook. ‘If you can’t pay your employees a living wage, you don’t have my sympathy,’ said another. Other comments accused Salem of being a bad businessman, of keeping too much money for himself and of exploiting his employees. Some readers even left negative reviews of his business online – even though they’d never met him or done business with him.”

Salem, the founder and CEO of ARGYLE Haus of Apparel, said he fears that the outraged reaction will discourage other affected businesses from speaking out and telling their own story.

He is correct. As a consultant who helps companies find business-friendly locations in which to locate, I encourage clients to keep a low profile. Otherwise, they will be hammered without mercy from an uninformed public and sometimes from public officials who know little about what it takes to run a business.

Publicly held corporations must divulge a relocation because that is considered a “material” event.  That is why within just a few years we’ve seen media coverage of many companies moving jobs out of Los Angeles County to out-of-state locations. Examples: Toyota, Hilton Hotels, Sony Pictures Imageworks, Occidental Petroleum, Northrop Grumman and Walt Disney Co.

Salem also said he is “contacted on an almost daily basis by other L.A.-based companies in my industry who are scared about the future. They are looking to me for leadership, and want to talk about my decision to leave the state.”

He added that “When politicians talk about an ‘economy working for everyone’ – let me tell you, it’s not working for the small business owner.”

Salem chafed at critics who suggested he’s taking advantage of his employees. He has always paid above minimum wage even though doing so causes increases in payroll taxes and workers compensation.

Saltsman wrote: “Despite the challenges of doing business in California, Salem (unlike some of his competitors) is still committed to making his products domestically. ‘I’m an American – I want this country to do well, to succeed….’ He told me he’s not opposed to raising wages – but that the entire burden can’t rest on small business owners. ‘I need the government to meet me halfway. In California, unfortunately, that kind of compromise doesn’t exist.’”

Other businesses have cited the minimum wage increase while loading moving vans, namely: California Composites of Santa Fe Springs when shifting work to Texas (the company owner said if he were to stay “it would probably make me a nonprofit within a couple years or so”); Competitive Edge Research & Communications that relocated from San Diego to Texas; and Woof & Poof of Chico, which makes handcrafted pillows and stuffed figures, when transferring work to North Carolina.

I noticed something about this event that adds insult to injury. Salem’s website states, “Based in the San Fernando Valley of Los Angeles, ARGYLE Haus is a founding member (emphasis added) of the L.A. Mayor’s Fashion Council, an organization dedicated to building and reinforcing the vibrant fashion and apparel industry in the greater Los Angeles area.”

A founding member? Have public officials shown any gratitude? Well, not that I know of from politicians like Gov. Jerry Brown, Los Angeles Mayor Eric Garcetti or any member of city council. I wonder if any of them think they could run ARGYLE Haus better than Mr. Salem has.

It’s hardly surprising that Salem concluded, “We need more stable, blue-collar jobs in places like the San Fernando Valley – the kind I thought I was helping create. California, however, has put up a giant ‘Go Away’ sign.’”

Mr. Saltsman’s Orange County Register column is here: “Los Angeles’ ungracious response to minimum wage consequences.”

Mr. Salem’s Los Angeles Times opinion column is here: “Leaving for Las Vegas: California’s minimum wage law leaves businesses no choice.”

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One focus of this blog has been to address California’s 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.

US Labor Secretary-Nominee Exits California’s Harsh Business Climate

December 10, 2016
By Joel Fox
Editor of Fox & Hounds and President of the California Small Business Action Committee

President-elect Donald Trump’s nominee as Labor Secretary, Andrew Puzder, heads a California company that decided to move headquarters to Tennessee. His reasoning: California’s suffocating regulatory business climate.

dept-of-labor-logoLabor and union supporters immediately attacked Puzder, head of CKE Restaurants that operates Carl’s Jr. and Hardee’s restaurants, when news of the pending appointment became public. Pudzer opposed California’s $15 minimum wage and has predicted that iPads and robots would soon take over some restaurant jobs.

However, Puzder has defended his statements in the past declaring that it is government policies that drive up the cost of labor to a point that employers must turn to automation to maintain the thin profit margins restaurants offer.

Puzder argues that government mandates are hurting the populations that those who pass the regulations are trying to protect. In his personal blog, Pudzer told of his interview on CNBC’s “Squawk Box” show after California passed the $15 minimum wage. “Jobs will disappear when minimum wage increases make the cost of hiring employees exceed productivity. I also told (“Squawk Box” Co-Anchor Becky) Quick that raising wages so drastically will price entry-level workers out of jobs and force businesses to automate.”

Puzder is not opposed to minimum wage increases but he said he wants them to be “rational” so as to have minimal impact to help preserve jobs. He favors earned-income tax credits to help low paid workers.

He also argues that government policies especially in California stifle the entrepreneurial spirit of immigrants and minorities who would move up to management and ownership of fast food restaurants.

When Pudzer announced the company’s headquarters’ move from Santa Barbara County to Nashville, Tennessee this past March he said the location of headquarters was unimportant. Where restaurants were building franchises and facilities is important and California presented too many business obstacles.

In a 2013 Wall Street Journal article, Pudzer said, “California is not interested in having businesses grow.” He cited as example that it takes 60 days in Texas, 63 in Shanghai, and 125 in Novosibirsk, Russia for one of CKE’s restaurants to get a building permit after signing a lease. But in Los Angeles it takes 285 days. Pudzer said, “I can open up a restaurant faster on Karl Marx Prospect in Siberia than on Carl Karcher Boulevard in California,” a street named for Carl’s Jr. chain’s founder.

Beyond the difficult permitting process, Pudzer complained about labor regulations often required the company to battle class-action lawsuits in the state. He said over the previous eight years his company paid $20 million in damages and attorney fees fighting the lawsuits.

In discussing the debate over minimum wage, Pudzer said he is not a fan of automation at restaurants.

“There’s a personal element that you don’t get from machines, and I think you’re going to lose that.” Fast food is a “great level of job for people to enter the labor force. A high percentage of our employees, particularly in California, are immigrants.”

In a September Wall Street Journal piece Pudzer wrote, “At restaurant-industry meetings, my colleagues typically voice concerns about government mandates. I’d much prefer to hear them complain that labor costs are rising because companies are hiring and the growing market has made competition for workers stiff. A freer market would do much more to improve worker’s lives than the Labor Department’s new regulation.”

Puzder is the co-author of a 2010 book, “Job Creation: How It Really Works and Why Government Doesn’t Understand It.”

If he gets the Labor job he can do something about it.

This column appeared on Dec. 9, 2016 in Fox & Hounds Daily, which gave permission to republish, and can be found here.

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One focus of this blog has been to address California’s 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.

 

More California Companies Hearing ‘Move to Our State’ Pitches

October 18, 2016

This proves that for every action there is a reaction: New measures by Gov. Jerry Brown and the California legislature that have worsened our business environment have boosted efforts by other states to recruit California companies to their friendlier locations.

Each visiting out-of-state representative outlines how a California company will benefit by relocating to one of their communities. Economic Development agencies also promote the advantages to California firms of placing future expansions in their areas.

california-precip-map-not-copyrightedAlthough no official records exist regarding recruitment activity in California by economic development organizations, I’ve experienced several hundred touchpoints from parties in far-flung locations wishing to discuss the state’s business environment.

California industries being targeted include financial services, manufacturing, robotics, software, e-commerce, food processing, aerospace, pharma and biotech, plastics, electronics, distribution and even family-owned dairy farms.

In the past, officials from a couple of agencies would contact me every month, but now it’s often two or three times per week.

The states with the highest California-related activity are Texas with 62 agencies, Indiana following at 22 and Arizona at 18. I define activity as visits, phone calls or direct-mail campaigns.

But the true level of activity is greater. For example, organizations in Texas, Nevada and Florida – and economic development agencies in Phoenix, Indianapolis and Pittsburgh – make multiple overtures in California.

The representatives are able to project significant operating cost reductions when it comes to labor, workers’ compensation, unemployment insurance, health care, taxes, facility leases or purchases, regulatory compliance and transportation. Affordable housing in other parts of the country also make it easier for companies to attract and retain employees.

Officials in other states follow activity in Sacramento where Gov. Brown enacted about 800 new laws this year, some of which will result in more regulations and higher tax and energy costs for California companies.

They also are struck by the unfairness of California’s new one-size-fits-all minimum wage law, which forces companies in low-cost areas to pay big-city wages as if they were located in the West Coast’s most expensive cities – Los Angeles and San Francisco. The legislature and Gov. Brown put businesses that face competition from foreign companies at quite a disadvantage.

Without a change in California’s political climate, I expect more inquiries to come in from states seeking to grow their economic base.

The identities of the 247 economic development entities that represent touchpoints with Spectrum Location Solutions are as listed below:

Alabama:

  1. Alabama Power, Mobile
  2. Baldwin County Economic Development Alliance, Robertsdale
  3. North Alabama Industrial Development Association, Decatur
  4. Power South Energy Cooperative, Montgomery

Arizona:

  1. Access Arizona, Casa Grande
  2. Apache Junction Economic Development Dept.
  3. Arizona Commerce Authority, Phoenix
  4. Arizona Public Service (utility), Phoenix
  5. Arizona Sun Corridor, Phoenix
  6. Avondale Economic Development Dept.
  7. Central Arizona Regional Economic Development Foundation, Casa Grande
  8. Gilbert Office of Economic Development
  9. Glendale Office of Economic Development
  10. Greater Phoenix Economic Council
  11. Mesa Economic Development Dept.
  12. Queen Creek Mayor
  13. Salt River Project (utility), Phoenix
  14. Scottsdale Economic Development Dept.
  15. Surprise, AZ City Manager
  16. Tempe Economic Development Dept.
  17. Wickenburg Regional Economic Development Partnership
  18. Yuma Economic Development Dept.

Arkansas:

  1. Office of the Governor

Colorado:

  1. Centennial Economic Development
  2. Colorado Springs Regional Economic Development Corp.
  3. Commerce City Economic Development Dept.
  4. Erie Economic Development Dept.
  5. Longmont Economic Development Partnership
  6. Metro Denver Economic Development Corp.
  7. Office of the Governor
  8. Westminster Economic Development Office

Florida:

  1. Brooksville-Tampa Bay Regional Airport
  2. Enterprise Florida, Orlando
  3. Florida East Coast Railway, Jacksonville
  4. Gulf Power, Pensacola
  5. Hernando County Economic Development Dept., Brooksville
  6. Jacksonville Port Authority
  7. Lake Wells Chamber of Commerce & Economic Development Council
  8. Manatee County Port Authority, Palmetto
  9. Office of the Governor
  10. Orange County Economic Development
  11. Orlando Economic Development Commission
  12. Power South Energy Cooperative, Miramar Beach
  13. Santa Rosa County Economic Development, Milton
  14. Sarasota County Economic Development Corp., Sarasota
  15. Petersburg Area Economic Development Corp.
  16. Tampa Bay Partnership, Tampa
  17. Tampa Hillsborough Economic Development Corp., Tampa

Georgia:

  1. Atlanta Economic Development Corp.
  2. Atlanta Economic Development Dept.
  3. Fayette County Development Authority, Fayetteville
  4. Georgia Dept. of Economic Development, Atlanta
  5. Rabun County Economic Development Authority, Rabun Gap

Idaho:

  1. Coeur d’Alene Area Economic Development Corp.
  2. Grow Idaho Falls Inc.

Iowa:

  1. Iowa Economic Development Authority, Des Moines
  2. Office of the Governor

Indiana:

  1. Bloomington Economic Development Corp.
  2. Carmel Community Relations and Economic Development
  3. Delaware County Economic Development Alliance, Muncie
  4. Duke Energy Economic Development, Indianapolis
  5. Duke Energy Economic Development, Plainfield
  6. East Central Indiana Regional Partnership, Muncie
  7. Fishers Economic Development Dept.
  8. Grant County Economic Growth Council, Marion
  9. Harrison County Economic Development Corp., Corydon
  10. Hoosier Energy Economic Development Dept., Bloomington
  11. Indiana Economic Development Corp., Indianapolis
  12. Indiana Municipal Power Agency, Carmel
  13. Indianapolis Chamber of Commerce
  14. Indy Partnership, Indianapolis
  15. Jackson County Industrial Development Corp., Seymour
  16. Madison County Corp. for Economic Development, Anderson
  17. Noblesville Economic Development Dept.
  18. Northeast Indiana Regional Partnership, Fort Wayne
  19. Office of the Governor
  20. Shelby County Development Corp., Shelbyville
  21. Vectren Economic Development (utility), Evansville
  22. Whitley County Economic Development Corp., Columbia City

Kansas:

  1. Black Hills Energy, Wichita
  2. Go Topeka Economic Partnership

Kentucky:

  1. Bowling Green Area Chamber of Commerce
  2. Hopkins County Economic Development Corp., Madisonville
  3. Kyndle Economic Development for Northwest Kentucky, Henderson
  4. South Western Kentucky Economic Development Council, Hopkinsville

Louisiana:

  1. Baton Rouge Area Chamber
  2. Cleco Power, Crowley
  3. Entergy (utility), New Orleans
  4. Livingston Economic Development Council
  5. Louisiana Economic Development, Baton Rouge
  6. North Louisiana Economic Partnership, Shreveport
  7. Southwestern Electric Power Co., Shreveport

Missouri:

  1. Kansas City Area Development Council
  2. Kirksville Regional Economic Development Inc.
  3. Lincoln County Economic Development, Troy
  4. Missouri Partnership, St. Louis
  5. Moberly Area Economic Development Corp.
  6. Nodaway County Economic Development, Maryville
  7. Northeast Missouri Economic Development Council, Hannibal
  8. Springfield Area Chamber of Commerce
  9. Louis Regional Chamber

Michigan:

  1. Lansing Economic Area Partnership

Mississippi:

  1. Jackson County Economic Development Foundation, Inc. Pascagoula
  2. Mississippi Power, Meridian

North Carolina:

  1. Advantage West Economic Development Group, Fletcher
  2. Beaufort County Economic Development, Washington
  3. Charlotte Regional Partnership
  4. Davidson County Economic Development Commission, Lexington
  5. Duke Energy, Charlotte
  6. Greensboro Partnership Economic Development

New Mexico:

  1. Albuquerque Economic Development
  2. Mesilla Valley Economic Development Alliance, Las Cruces
  3. NM Partnership, Albuquerque

Nevada:

  1. Economic Development Authority of Western Nevada, Reno
  2. Henderson Economic Development Dept.
  3. Las Vegas Global Economic Alliance
  4. Nevada Office of Economic Development, Carson City
  5. Northern Nevada Development Authority, Carson City
  6. NV Energy, Reno

Ohio:

  1. Cuyahoga County Dept. of Development, Cleveland
  2. Greater Akron Chamber
  3. Greater Cleveland Partnership
  4. Jobs Ohio, Toledo
  5. Piqua Economic Development Dept.
  6. Team Northeast Ohio, Cleveland
  7. Tipp City Community and Economic Development Dept.
  8. Youngstown-Warren Regional Chamber

Oklahoma:

  1. Greater Oklahoma City Chamber
  2. Norman Economic Development Dept.

Oregon:

  1. Business Oregon, Eugene
  2. Confederated Tribes of the Umatilla Indian Res., Economic Dept., Pendleton
  3. Greater Portland Inc.
  4. Hillsboro Economic Development
  5. Klamath County Economic Development, Klamath Falls
  6. McMinnville Economic Development Partnership
  7. Port of Portland
  8. Southern Oregon Regional Economic Development, Inc. Medford

Pennsylvania:

  1. Altoona-Blair County Development Corp.
  2. Armstrong County Dept. of Economic Development, Kittanning
  3. Governor’s Action Team
  4. Greater Pittsburgh Chamber of Commerce
  5. Greater Reading Economic Partnership
  6. Penn-Northwest Development Corp., Mercer
  7. Pittsburgh Regional Alliance

South Carolina:

  1. Central South Carolina Economic Development, Columbia
  2. Myrtle Beach Regional Economic Development, Conway
  3. Oconee County Economic Development Commission, Walhalla
  4. Richland County Economic Development, Columbia
  5. Santee Cooper (utility), Moncks Corner
  6. Spartanburg County Economic Futures Group

South Dakota:

  1. Governor’s Office of Economic Development

Tennessee:

  1. East Tennessee Economic Development Agency, Knoxville
  2. HTL Advantage (Haywood, Tipton, Lauderdale), ED Coalition, Covington
  3. Knoxville Chamber
  4. Montgomery County Economic Development Council, Clarksville
  5. Nashville Area Chamber of Commerce
  6. Tennessee Economic & Community Development, Nashville
  7. Tennessee Valley Authority, Nashville
  8. Williamson County Economic Development, Franklin

Texas:

  1. Allen Economic Development
  2. Amarillo Economic Development Corp.
  3. Arlington Economic Development Dept.
  4. Athens Economic Development Corp.
  5. Austin Chamber, Economic Development Dept.
  6. Bastrop Economic Development Corp.
  7. Bay Area Houston Economic Partnership
  8. Bowie Economic Development Corp.
  9. Brownsville Economic Development Council
  10. Buda Economic Development Corp.
  11. Burleson Economic Development
  12. Burlington Northern Santa Fe Railway, Economic Development Dept., Fort Worth
  13. Cedar Park Economic Development
  14. CenterPoint Energy, Houston
  15. Copperas Cove Economic Development Corp.
  16. Dallas Regional Chamber
  17. Denton Economic Development
  18. DeSoto Economic Development Corp.
  19. Flower Mound Economic Development Dept.
  20. Fort Worth Chamber, Economic Development Division
  21. Frisco Economic Development Corp.
  22. Georgetown Economic Development
  23. Greater Houston Partnership
  24. Greater Irving-Las Colinas Chamber of Commerce
  25. Greater Waco Chamber Business Development
  26. Harlingen Economic Development Corp.
  27. Houston Port Region Economic Alliance
  28. Hutto Economic Development
  29. Katy Economic Development Council
  30. Kilgore Economic Development Corp.
  31. Kyle Economic Development
  32. Laredo Development Foundation
  33. Levelland Economic Development Corp.
  34. Lockhart Economic Development
  35. Longview Economic Development Corp.
  36. Lubbock Economic Development Alliance
  37. Matagorda County Economic Development Corp., Bay City
  38. McKinney Economic Development Corp.
  39. Midland Development Corp.
  40. Mount Pleasant Economic Development Corp.
  41. Nacogdoches Economic Development Corp.
  42. New Braunfels Economic Development
  43. Office of the Governor
  44. Oncor (utility), Dallas
  45. Pearland Economic Development Corp.
  46. Plano Economic Development
  47. Port of Houston Authority
  48. Richardson Economic Development Partnership
  49. Rio South Texas Economic Council, Edinburg
  50. Rockwall Economic Development Corp.
  51. Round Rock Chamber Economic Development Partnership
  52. Rowlett Economic Development
  53. San Antonio Economic Development Foundation
  54. San Marcos Partnership Economic Development
  55. Seguin Economic Development
  56. Southern Texas Economic Development Foundation, Beaumont
  57. Sugar Land Economic Development
  58. Team Texas, Austin
  59. Texas Economic Development & Tourism Dept., Austin
  60. Texas Secretary of State
  61. Victoria Economic Development Corp.
  62. Wichita Falls Economic Development

Utah:

  1. Cache County Chamber, Economic Development, Logan
  2. Economic Development Corp. of Utah, Salt Lake City
  3. Office of Economic Development, Salt Lake City
  4. Office of the Governor
  5. Ogden Community and Economic Development Dept.
  6. Weber County Economic Development Partnership, Ogden

Virginia:

  1. Fairfax County Economic Development Authority, Tysons Corner
  2. Hampton Economic Development
  3. Hampton Roads Economic Development Alliance, Norfolk
  4. Isle of Wright County Economic Development, Isle of Wright
  5. Office of the Governor
  6. Portsmouth Economic Development Dept.
  7. Roanoke Regional Partnership
  8. Rockingham County Dept. of Community Development, Harrisonburg
  9. Virginia Beach Economic Development
  10. Virginia Economic Development Partnership, Richmond
  11. Virginia Port Authority, Norfolk
  12. Virginia’s 2000 Business and Economic Development Alliance, Lynchburg
  13. Virginia’s Growth Alliance, Keysville
  14. Washington County Economic Development & Community Relations, Abingdon

Washington:

  1. Greater Spokane Inc.
  2. Port of Sunnyside
  3. Yakima County Development Association

West Virginia:

  1. Jefferson County Development Authority, Charles Town
  2. West Virginia Development Office, Charleston

A state-by-state tally is below:

Rank

State

Number of Organizations
1 Texas 62
2 Indiana 22
3 Arizona 18
4 Florida 17
5 Virginia 14
6 Missouri 9
6 Tennessee 9
8 Colorado 8
8 Ohio 8
8 Oregon 8
11 Louisiana 7
11 Pennsylvania 7
13 North Carolina 6
13 Nevada 6
13 South Carolina 6
13 Utah 6
17 Georgia 5
18 Alabama 4
18 Kentucky 4
20 New Mexico 3
20 Washington 3
22 Idaho 2
22 Iowa 2
22 Kansas 2
22 Mississippi 2
22 Oklahoma 2
22 West Virginia 2
28 Arkansas 1
28 Michigan 1
28 South Dakota 1
Total

247

One focus of this blog has been to address California’s 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.

Los Angeles KTTV Editorial – ‘California Losing Companies & Jobs’

October 7, 2016

Now here is an editorial that gets to the point about California’s business departures, saying, “Governor Brown: Your attitude needs to change…. Creating a climate that is business friendly should come from the top and be a priority.”

ch-11-point-of-view-calif-losing-jobsThe piece runs a lengthy news crawl at the bottom of the screen that shows the names of some of the companies that have relocated in full or in part out of California.

The commentary cites my study issued in January, entitled, “California Business Departures: An Eight-Year Review 2008-2015.”

The views expressed by the station’s Vice President and General Manager, Bob Cook, are in concert with the assessments held by business leaders throughout the state.

See KTTV’s “Point of View: California Losing Jobs.”

* * *

One focus of this blog has been to address California’s 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.

Case Study: How Politicians Like Sen. Connie Leyva Motivate Companies to Leave California

September 13, 2016

Manufacturing is the number one industry in California to pack up and move to states considered to be friendly to business. Since such losses are happening more frequently, let’s take a look at the record of a politician from a district that will soon lose a major employer. In this case, it’s Senator Connie Leyva who represents Colton.

seal_of_san_bernardino_county_california-svgBut, first things first. Ashley Furniture has announced it will stop manufacturing in Colton and furlough 840 employees.

The company didn’t say that California’s difficult tax and regulatory environment figured into its decision, but I can’t see how any business leader could ignore such factors when deciding whether to stay in or leave the state.

A company statement said that closing the facility will strengthen its production capability and cost structure so as to compete effectively.

The work will be transferred to Wisconsin, Mississippi and North Carolina, all of which have reasonable labor rates, lower workers’ compensation costs, a thoughtful regulatory environment, lower energy costs and a merciful litigation environment.

I have no connection with Ashley Furniture. But in my experience I’m confident that the company could reduce costs by 20-35 percent for each job moved, helping it to remain competitive in the dog-eat-dog retail world.

Consider the experience of Bing Energy, a “green” fuel-cell company, that relocated its headquarters and manufacturing from Chino to Florida.

Bing CFO Dean Minardi said the “tipping point” in his decision was Florida’s friendlier laws and its move to phase out the corporate income tax. Minardi said of eliminating the tax, “It’s huge. The more income a company can keep the more people it can hire…. I just can’t imagine any corporation in their right mind would decide to set up in California today.”

My firm completed a study – California Business Departures: An Eight-Year Review 2008-2015 – that estimates more than 3,000 manufacturers diverted capital out of California because of facility relocations, opting for expansions in other states, or deciding to go elsewhere after considering California.

The difficulty of operating here keeps increasing as our politicians (virtually always Democrats) repeatedly pass costly measures. More tax hikes. More regulations. More fees. More penalties. Much of that translates into bureaucratic harassment.

Ashley Furniture gave employees 60 days notice and met regulations governing layoffs. I’m sympathetic and understand why workers organized a protest in front of an Ashley retail store.

But by protesting at the company’s door, the workers drew attention to the effects of Sacramento’s actions.

It would be nice to see protests at the doors of the politicians who support business-killing, economy-killing, job-killing policies. In other words, speak out against the causes of California’s job losses.

The top political figure I hold responsible for our deteriorating business environment is Gov. Jerry Brown. But he has, for want of a better word, collaborators.

Since Colton has lost jobs before, I decided to examine the work done by the state Senator who represents that community, Connie Leyva. Her website focuses on social issues relating to homeless students; the rights of housekeepers, nannies, and caregivers; and safeguarding children from predators.

All are noble causes, but I didn’t see efforts to boost a business’s prospects for success. In fact, Leyva voted for California’s absurd one-size-fits-all minimum wage, requiring employers in her lower-cost district to pay San Francisco-like high wages, especially when veteran employees demand to be paid more than unskilled workers.

I can’t say that the “Leyva minimum wage” caused Ashley Furniture’s decision, but it’s reasonable to suggest a link between it and the upcoming out-of-state relocation.

According to the California Manufacturers & Technology Association’s legislative scorecard for last year, Leyva has a feeble record of supporting job-creating bills. Another report, one by the California Chamber of Commerce, shows that every time she voted for a business-friendly bill, she voted three times for business-hostile legislation.

As President John F. Kennedy proved years ago, lower taxes boost economic vitality. Thus, it was logical for me to scan the scorecard from the Howard Jarvis Taxpayers Association, which gave Leyva an “F.”

Politicians failed to learn from the event seven years ago when CalPortland Cement closed its plant – also in Colton – because of high state-related costs.

Then, company President James Repman testified that staying in business “is becoming increasingly more difficult due to the myriad of regulations and agencies that oversee every aspect of our business…. The next new plant probably won’t be built in California meaning more good, high paying manufacturing jobs will be lost to Nevada or China or somewhere.”

The biographies for Gov. Brown, Sen. Leyva and most Democrats show that they’ve never run a company. Until voters who want good jobs become wiser about who they elect to office, we will see more businesses leave the state.

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One focus of this blog has been to address California’s 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.