Question: Why would I want to put a new business in California? (Nice: tech job, college)

[Mack Knife]

Originally Posted by oldtrader

Lets imagine if you will, I want to establish a new manufacturing plant in the U.S. I am a company headquartered in the Silicon Valley. I am going to hire 1,500 people at good wages. The product will sell for $400 retail, for $300 wholesale. It has already been costed out, and will cost $250 to manufacture in Los Angeles Ca.

Why would I want to put that plant in California?

Why should I put it someplace else?

What are the reasons for and against putting it in Los Angeles.

That is the problem company execs face every day. Lets look at real reasons for your decision, not just use your emotions. Look at it like a hard nosed businessman.

Until you really have a business or want to start one and are planning, everything is speculation and can't have the focus of reality. Every business is different and to everyone things means something different and carry different amounts of concern. This is a good exercise in make believe but little else. Two people wanting to locate the same type of business might choose locations across the country from each other for something as simple as where their parents live. Maybe that doesn't seem like a business decision until you factor in that one of them is caring for their elder parents and yes, that becomes in part, a decision affecting the business too.

Exercises like this are called vacuum thinking.

[oldtrader]

That is fine for small businesses, and there are many personal reasons to set up a business in a certain location. But the question was for a large business, part of a large corporation. Then you don't think of personal reasons, but what makes good business sense is the deciding factor.

One thing that needs changed in California if they want to compete, is it now takes about 2 1/2 years to get the approval to set up a new business or expand an old one. California may force you to go through over 50 different bureaus to get approval for a new business, and may cost millions of dollars to get it approved. Many states can be done in 2 weeks with little cost, with maybe 6 bureaus to contend with. Just as many decisions may be needed, but one bureau may cover 10 things that California needs a different bureaus to cover each one.

Companies cannot wait around, for over 2 years extra to set up a new plant. Once they make up their mind for a new plant, they are ready to set it up and start hiring people. They go to where they can get a quick start.

[Ultrarunner]

Seems like the "Cure" is to export California redtape to the other states to level the playing field.

[DynamoLA]

I completely agree that the bureaucracy in California needs to be cut and streamlined. But that still won't change the fact that the cost of land is high, and the cost of labor is high.

[RaymondChandlerLives]

California has 1.3 million businesses--far and away the most of any individual state. Even in per capita terms, that crushes Texas.

Keep that in mind the next time someone posts an opinion piece on the horrible business climate here. It is pure right-wing propaganda for the most part.

[Ultrarunner]

I worked in the engineering department of a Bay Area tool and die shop right after college.

California may have lots of businesses... but, they must be different ones.

That shop and none of it's competitors exist today...

All of the companies we serviced are still around... just not in California.

We did work for Caterpillar, Owens/Corning, the big Paper Mills and Canneries plus some high tech firms... not a single one has manufacturing here... even Kellogg's which was one of my steady accounts.

Not everyone is suited to office and design work...

We had guys on the shop floor that supported their families working as highly skilled die makers... just not much call for this around here now...

[oldtrader]

Seems like the "Cure" is to export California redtape to the other states to level the playing field.

No the real solution, is to do what the successful other states do. That is find out how to cut the red tape, and speed up processing.

**********

California has 1.3 million businesses--far and away the most of any individual state. Even in per capita terms, that crushes Texas.

Keep that in mind the next time someone posts an opinion piece on the horrible the business climate is here. It is pure right-wing propaganda for the most part.

It is not right-wing propaganda. Look at the official U.S. Government figures (and the present government is certainly not right-wing).

According to U.S. Government Census figures, there were 849,316 non farm firms in California in 2011 which is the last year figures are available. 2012 figures will be out middle of next month.

There were 525,420 non farm firms in Texas at that point.

Lets look at the true figures, compiled by the federal government on all states. Lets compare California and Texas. This shows for month to month this year, comparing for a year ago change Feb through July. For actual numbers change, remember California is about half again as big as Texas.

Manufacturing: California every month is worse unemployment in this field than last year. An indication that California is losing jobs and companies in the manufacturing field. This is one of he most important factor, as these are middle income jobs that mostly do not require a college education. You know jobs for the 70% of the population. Texas has never fallen behind even one month.

Government: Always a big source of jobs in California with all their bureaucracy and large education system. Every month there are less government jobs than a year ago. Texas has been increasing every month, especially in the education field. One reason that Texas is near the top on K-12 education today, and California is near the bottom.

Layoff events, which is when larger firms close or have a major cut back.

California 1,291 Feb through July. Texas only 224 Feb through July this year. Remember California has only about half again as many people but the big layoffs were over 5 times worse in California.

Number of new unemployment applications Feb through July this year.

California 108,488 Texas 24,365

Look at the other fields, and you find that California is hurting in many of them compared to Texas.

California Economy at a Glance

Texas Economy at a Glance

Feel free to check the other states where California people and businesses are fleeing to such as Virginia, and Washington and all the rest, which is all it takes is a click on the state. Find out the truth about how well California is doing compared to the rest of the country. These are official federal government figures who complied them from information supplied by the states.

[expatCA]

Originally Posted by RaymondChandlerLives

California has 1.3 million businesses--far and away the most of any individual state. Even in per capita terms, that crushes Texas.

Keep that in mind the next time someone posts an opinion piece on the horrible business climate here. It is pure right-wing propaganda for the most part.

You are right, all those fast food jobs will certainly keep families afloat instead of the stupid manufacturing jobs going to Texas. Will you have fries with that order?

[RaymondChandlerLives]

Originally Posted by expatCA

You are right, all those fast food jobs will certainly keep families afloat instead of the stupid manufacturing jobs going to Texas. Will you have fries with that order?

Nice dodge, but California's manufacturing job base is over 30% larger than Texas's. A larger percentage of CA's labor force works in manufacturing in comparison to Texas.

The great "Texas Miracle" is that it's finally catching up a little bit after all these years.

[oldtrader]

Nice dodge, but California's manufacturing job base is over 30% larger than Texas's. A larger percentage of CA's labor force works in manufacturing in comparison to Texas.

What you are not considering, is that California is still mired in a recession, many states have left far behind. California is not where the jobs are growing.

10 States With Biggest Rate of Job Growth in 2013-Kiplinger

When you look at official California reports, you will find that manufacturing jobs are declining, at the same time they are increasing in other stats.

http://www.calmis.ca.gov/file/lfmonth/calmr.pdf

This hurts the middle class, considerably. Saying we have the most is not taking care of the people losing their jobs.