The Boll Weevil

by Dave Schuler on May 2, 2014

À propos of the observations I made the other day, I found this editorial on Toyota’s plan to re-locate its US headquarters from California to Texas interesting, saddening, and discouraging:

Toyota wanted out of California for many reasons: high taxes, steep operations costs and unpredictable state politics. The automaker reportedly had kicked the tires on several locations in Texas as well as in Denver, Atlanta and Charlotte, N.C. And Toyota’s not the only one racing for the exits. In recent years, more than 250 companies have bolted from California, and relocation experts in that state say Texas was their No. 1 destination.

“When you look at the whole package, it’s difficult to be a business here,” said Torrance Mayor Frank Scotto, whose city is the big job loser in Toyota’s move to North Texas.

Toyota has deep pockets and could expand anywhere on its own coin, but Texas made a strong case sealed with a handsome dowry. The benefit to North Texas comes from high-paying corporate jobs and the multiplier effect of new home purchases and countless other spending gains.

You can hardly blame Toyota for its decision but this kind of bidding war is at best a zero-sum game for the country. It’s good for Texans, bad for Californians, meanwhile producing disruption and upheaval.

Oh, de boll weevil am a little black bug,
Come from Mexico, dey say,
Come all de way to Texas,
Jus’ a-lookin’ foh a place to stay,
Jus’ a-lookin’ foh a home,
Jus’ a-lookin’ foh a home.

{ 5 comments… read them below or add one }

jan May 2, 2014 at 1:59 pm

Toyota is far from the only one leaving CA. So far this year alone, something like 158 businesses have packed their bags and are moving elsewhere where the financial climate trumps the CA weather. Intel, for instance, is moving to Oregon. All in all, CA is losing businesses at a 3:1 ratio. When you add in our current drought — the snow pack recently measuring only 17% of normal — I think CA is headed for some hard times!

jan May 2, 2014 at 1:59 pm

Toyota is far from the only one leaving CA. So far this year alone, something like 158 businesses have packed their bags and are moving elsewhere where the financial climate trumps the CA weather. Intel, for instance, is moving to Oregon. All in all, CA is losing businesses at a 3:1 ratio. When you add in our current drought — the snow pack recently measuring only 17% of normal — I think CA is headed for some hard times!

PD Shaw May 2, 2014 at 5:49 pm

. . . unpredictable state politics . . .

I didn’t see that complaint earlier, and it’s interesting. I had a client looking to expand into a new business that was pro-environmental, but also as is often the case, involved environmentally sensitive operations that was likely to pose a risk of public adversity (NIMBY) and hostile regulation. I gave some opinions that sought to prognosticate the state of affairs and foreseeable developments. But I’m not a fortune-teller, and the client understood this. Ultimately, the client opened the new business in Canada, where they found the politics more predictable.

PD Shaw May 2, 2014 at 5:52 pm

BTW/ If there is one amendment to the U.S. Constitution I would propose, it would be to end the ability of states to give special incentives to move businesses. I have no problem with states competing for business, but they should do it by adopting standards that apply to all businesses.

... May 2, 2014 at 7:31 pm

BTW/ If there is one amendment to the U.S. Constitution I would propose, it would be to end the ability of states to give special incentives to move businesses.

Yes. Also localities.

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