Chief Executive’s newest Regional Report offers an in-depth look at the pros and cons of doing business in California, Nevada, Utah, Colorado, Wyoming, Idaho, Washington, Oregon and Montana. In California, people call it the Big Wake-Up Call.
After half a century headquartered in a Los Angeles suburb, Toyota North America announced in May that it would relocate to new facilities north of Dallas, Texas. CEO James Lentz attributed the decision to the company’s need for consolidation, ease of collaboration and logistical improvements. He wanted to centralize the auto manufacturer’s operations, now spread out among several states, bringing it closer to global suppliers and transport channels. Lentz insisted he had no problem with California’s business climate, nor was the $40 million incentive package offered by Texas Governor Rick Perry more than a minor factor in determining the move.
The chief informed state and local officials of the relocation plan just moments before announcing it publicly. Inevitably, the news rankled. Talk of companies leaving California and taking their jobs with them is dry kindling in the state fireplace, a reliable “don’t get me started” conversation starter. Talk of the seemingly endless cycle of new tax bills, service cutbacks and regulatory proposals spur a highly vocal reaction to what many denounce as the country’s most anti-business environment. Chief Executive readers ranked the Golden State—the nickname is difficult to cite without a smirk—perennially last in the Best & Worst States for Business rankings.
Once synonymous with economic opportunity and personal striving, California today is a state where pride of place among business owners is considered, if not gauche, then hopelessly naive. Circumstances color the reaction. The epicenter of America’s post-war car culture, Southern California was once home to Japan’s Big Three, two of them Torrance neighbors. In recent years the auto-manufacturing cluster has effectively evaporated. Nissan, formerly based in Gardena, relocated to Tennessee in 2005.