California: Higher cost of business than even Canada (Santa Ana, Ontario: health insurance, credit card)

[EscapeCalifornia]

O.C. auto maintenance firm moves to Canada - Jan Norman on Small Business : The Orange County Register

O.C. auto maintenance firm moves to Canada

February 18th, 2010, 5:00 am · 23 Comments · posted by Jan Norman, small-business columnist

MotorVac Technologies, maker of automotive maintenance equipment, is closing its Santa Ana facility and moving to Canada.

Parent company UView in Mississauga, Ontario, Canada, is keeping about 10 employees and laying off 20, according to MotorVac Chairman, CEO Mark Hallsman.

UView designs and makes products for the auto repair market. It bought MotorVac in July 2009, in order to get its 17 patents and automotive fluid maintenance equipment that is sold in 60 countries.

“I really fought hard to keep (MotorVac) here, but unfortunately the numbers didn’t support it,” Hallsman said.

The move cuts costs because UView has its own plant with excess capacity in Canada, he said. “And the general cost of doing business in California is much more expensive.”

[Lifeshadower]

Wow, California has just been hemorrhaging manufacturing operations like a hemophiliac lately. It's one thing to lose it to a 3rd world country from outsourcing, but its almost like a real big slap on the face that California loses it to somewhere like Canada. However, downsizing operations to be closer to the parent company isn't something unheard of.

However, I'm curious to know why this wasn't kept in America, like the Deep South or Texas, where there is a much more business friendly climate?

[FlipMC]

Not surprised. California's liberalism will be its demise. With its anti-business mentality, watch as more businesses in CA will leave for other states/countries.

[bhcompy]

Well, at least we're not New Jersey yet. They have the worst business tax climate in the US according to the Tax Foundation

[DMenscha]

I'm willing to bet that they were going to move the company anyway, given that they stated that they bought it for the patents.

[lrmsd]

Originally Posted by DMenscha

I'm willing to bet that they were going to move the company anyway, given that they stated that they bought it for the patents.

Yes,and they are laying off workers,too. The quote did not say 'rehiring once we relocate to canada'. My guess is they think the type of product will be m ore in demand in canada than CA.

There are always layers to any story.
As well,CA will continue to create new industries,just as any state or country in the world needs to do.
Amazon was revolutionary 15 yrs ago,now everyone and their brother sells books cheaply online. it's the nature of life: Never assume,esp. in today's world,that some new 'invention' or 'industry' will have more than 5 yrs longevity-those years/times are largely over,yet folks continue to try to get 'training' and a life long secure job,as though this were the 1950's. It isn't.

Also,remember that although customer service jobs have gone overseas,for example,lo and behold,our consumer economy is changing under our feet-fewer people in the next decade will even want a car loan or a credit card. So the question will be moot. Those jobs were not cutting edge,they were a product of a time,not an innovation for the times. Big difference.

We shoudl expect industries to die [ie,detroit-that has been decades in the m aking]steel and lumber,etc. It's not evil;it's a fact of life,and it's difficult for those who had worked for generations in said industries,or lose their jobs tomorrow-but the real assistance would be to educate and train people's minds to accept that evolution of economies,world wide. Not for a 'specific career',but for the reality that life is about continual reinvention. One invention begets the changes in the society that require yet another invention or industry.

If we look at it that way,it's optomistic and even exciting.
more entrepreneurial and small business would be excellent right now.
Jumping on the 'next big wave' would not be,for the most part. But,you hear 'biotech' enough times,and you assume it will create a new,prosperous country/world. Not necessarily true.

[DMenscha]

Indeed. In my county, the entire economic base was extractive industries like mining, cement making, and logging. While logging still continues around here, the closest mills are more than 50 miles away and one of them has been slated to be shut down.

Now we just mine tourists.

[SOON2BNSURPRISE]

This is about a company that bought another company and could build the product cheaper in the home plant because of access cappacity in Canada. I would have done the same thing. Nothing personal here, just good business for the company. If it had been the other way around we would have been thinking what a great thing. Yes California is not business friendly and it will lose business to other states and countries, but this story is unique in that the parent company had additional unused capacity in Canada, could make the product in the home plant, and could still sell the product in the 60 nations including the United States and make money in the process.

[CAVA1990]

Maybe it's easer to do business in Canada because they have national health insurance and companies don't have to bear the cost and hassle of providing it to their employees.

[AnUnidentifiedMale]

Originally Posted by FlipMC

Not surprised. California's liberalism will be its demise. With its anti-business mentality, watch as more businesses in CA will leave for other states/countries.

Yeah, like Canada, because it's such a conservative country.