Businesses Lost to California for Texas

A study shows the number of headquarters and expansions by businesses lost to California are numbered in the thousands.

The news is carried in the Dallas Business Journal: “California lost 9,000 business HQs and expansions, mostly to Texas, 7-year study says.”

Roughly 9,000 California companies moved their headquarters or diverted projects to out-of-state locations in the last seven years, and Dallas-Fort Worth has been a prime beneficiary of the Golden State’s “hostile” business environment.

That’s the conclusion of study by Joseph Vranich, a site selection consultant and president of Irvine, California-based Spectrum Location Solutions.

Of the 9,000 businesses that he estimates disinvested in California, some relocated completely while others kept their headquarters in California but targeted out-of-state locations for expansions, Vranich found. The report did not count instances of companies opening a new out-of-state facility to tap a growing market, an act unrelated to California’s business environment.

Japanese automaker Toyota, which is consolidating its North American headquarters in Plano over the next couple of years, is one of those companies. The company is leaving Torrance, California, and two other locations to set up shop in Plano, where it will employ 4,000.

It’s typical for companies leaving California to experience operating cost savings of 20 up to 35 percent, Vranich said. He said in an email to the Dallas Business Journal that he considers the results of the seven-year, 378-page study “astonishing.”

“I even wonder if some kind of ‘business migration history’ has been made,” Vranich wrote in his note.

The story goes on to give some details.

This problem will only get worse. As California loses economic growth and revenue, their enormous debt and obligations (public union pensions) will force them to squeeze the remaining industries even more.

Texas and other red states will benefit unless the Californians who migrate are too stupid to understand cause and effect. If they vote for the same policies that eventually led them to leave California, that will be a tragedy.