And Brown is correct:Gov. Jerry Brown said Friday that it appears there was little California could have done to keep Toyota, the world's largest automaker, from moving its U.S. headquarters and about 3,000 jobs to Texas.
"Change is inevitable," he told reporters after addressing the Los Angeles Area Chamber of Commerce.
Brown cited comments from senior Toyota officials who said the decision to consolidate operations in Plano, a suburb of Dallas, was based partly on its proximity to company manufacturing plants in Texas, Kentucky, Mississippi and Indiana. Texas Gov. Rick Perry said the state offered Toyota $40 million in incentives, and the mayor of Plano said the city aggressively courted Toyota.
"So, you know, this is a company decision, whether — why and how — I think they explained it," Brown said. "But now, if you don't want to believe them, they gave their reasons — and their reasons were consolidation."
Republicans have said Toyota's move is another sign of California's inhospitable business climate and failure to aggressively court companies, even as Texas and New York target California businesses with what they say are more favorable tax and regulatory environments. - AP, 5/2/14
While the job losses are sad, but here's the big picture:The trouble is that taxes, regulations and business climate appear to have had nothing to do with Toyota's move. It came down to a simple matter of geography and a plan for corporate consolidation, Toyota's North American chief told The Times. And in the big picture, California's and Texas' economies are growing at a similar pace, with corporate relocations — in either direction — representing only a tiny slice of job growth in both states.
"It may seem like a juicy story to have this confrontation between California and Texas, but that was not the case," said Jim Lentz, Toyota's North American chief executive.
Toyota left California to move its company's brainpower, now divided among offices in three states, into one headquarters close to the company's manufacturing base, primarily in the South.
"It doesn't make sense to have oversight of manufacturing 2,000 miles away from where the cars were made," Lentz said. "Geography is the reason not to have our headquarters in California."
The episode highlights the outsized attention paid to the interstate scrum to woo big-name employers — often with public money. Add in Perry's high-profile company-poaching visits to California, and the move teed up a talking point for those who argue that California must change its ways to fend off the Texas assault.
"It's a prime example of the state's unfriendly tax code and business regulations that drive businesses out of the state," said Allan Mansoor, the top Republican on the state Assembly's economic development committee. "The whole thing could have been prevented."
Economic data paint a different picture, according to experts who study job migration and creation. For one thing, poaching of jobs does little to grow the economy of any state.
The Public Policy Institute of California studied this phenomenon over a 15-year period, from 1992 to 2006. It found that less than 2% of jobs lost in California were due to companies leaving, and only 1% of jobs created were due to companies moving in. - Los Angeles Times, 5/2/14
And here's something else everyone needs to take into account:Still, California does get some wins. Boeing Co. announced last month that it will move 1,000 engineering jobs from Seattle to Long Beach, in part to tap the region's deep aerospace talent. That will help replace some of the jobs going away with the end of C-17 production. Technology companies continue to grow in the Bay Area and parts of Southern California.
So while the Golden State could certainly find ways to improve its business climate and economic policy, it's important to keep some perspective, said Chris Thornberg, founding partner at Beacon Economics in Santa Monica.
The loss of 3,000 jobs will not break a state that's home to 15 million jobs, and California still has a lot going for it. - Los Angels Times, 5/2/14
I just wanted to pass this along. Have a great weekend!Brown pointed Friday to other signs that he said indicate a robust economy and strong investment in California.
“We’re getting 60 percent of the venture capital. We’re the number one place for direct foreign investment in the United States. Do we have everything in all respects? No. But we have an abundance that constitutes a $2 trillion economy,” he said.
“Is that any reason for complacency? No. That’s why we have GO-Biz, that’s why the Legislature meets every year. And I’m certainly always on the lookout for things that can improve California.”
Palo Alto-based electric car-maker Tesla Motors Inc. recently announced it is considering four states as sites for two new battery-making facilities: Texas, New Mexico, Arizona and Nevada.
Toyota will maintain about 2,300 jobs in California after the company settles into its new corporate campus in late 2016 or early 2017. - AP, 5/2/14