Fleeing California: Toyota takes its business (and its jobs) to Texas

**Posted by Phineas


Oh, man, this is just a gut punch to the Southern California economy:

Toyota Motor Corp. plans to move large numbers of jobs from its sales and marketing headquarters in Torrance to suburban Dallas, according to a person familiar with the automaker’s plans.

The move, creating a new North American headquarters, would put management of Toyota’s U.S. business close to where it builds most cars for this market.

North American Chief Executive Jim Lentz is expected to brief employees Monday, said the person, who was not authorized to speak publicly. Toyota declined to detail its plans. About 5,300 people work at Toyota’s Torrance complex. It is unclear how many workers will be asked to move to Texas. The move is expected to take several years.

I don’t know how many will move to Texas, but I bet several thousand won’t. And that doesn’t even address the ripple effects in the region’s economy, all sorts of support businesses that would lose the revenue spent by those employees — restaurants, dry cleaners, janitorial companies, you name it. Those people won’t be heading for Texas; they’ll be stuck here. And it’s going to hurt.

Toyota originally came to LA in the late 1950s, and staying here made sense for them for a long time, in spite of increasingly burdensome taxes and regulations. After all, most of their cars entered the US through the huge Port Of Los Angeles, so it made sense to have the North American HQ nearby.

But, with the passage of time, Toyota, like so many foreign car manufacturers, built more and more of their cars here in the US, mostly choosing to construct their facilities in business-friendly Southern states… such as Texas. The last auto manufacturing plant in California, coincidentally Toyota’s, closed in 2010. Eventually, economic logic (1) lead the company to decide that the cost of living and business in California wasn’t worth staying in California, not when their manufacturing operations had all shifted to Texas and nearby states.

As Dale Buss writes at Forbes. After talking about the structural shift in Toyota’s business, he looks at the once-Golden State:

Besides, California’s business climate is becoming an even bigger downer. California has become infamous with business executives and owners there not only for high tax rates and complex taxing schemes but also for overzealous regulations and regulators that have managed to stifle the entrepreneurial energy of thousands of companies.

Even Hollywood movie studios have been souring about producing flicks in California, increasingly reckoning that the sweet tax breaks and assistance packages now offered by so many other states offset the legacy advantages and ideal production climate in California.

About the only vast remaining pocket of dynamism in the California economy is Silicon Valley, where the mastery of the global digital economy by companies ranging from Google to Hewlett-Packard has become so complete that they have been able to succeed despite the home-state business landscape.

In the annual Chief Executive magazine “Best States / Worst States” ranking that surveys CEOs for their opinions, Texas has been holding on to the No. 1 spot for a while; California seems permanently relegated to No. 50.

As Automotive News put it, “Despite the deep, creative talent pool in greater Los Angeles, doing business in California has become more expensive for companies and their workers.” Bestplaces.net said that the cost of living for employees is 39 percent higher in Torrance than in Plano, and housing costs are 63 percent lower in Plano.

Thus, over the last 10 years, the Lone Star State has stolen so many jobs from the paragon of the Pacific Coast that Toyota’s reported move should come as no big surprise.

No, it’s no surprise, but it is maddening because it is a largely self-inflicted wound. Business flight has been going on for a few years, now, and, no, “Green jobs” just aren’t going to fill the gap. Heck, a businessman even set up a consulting firm to help companies “abandon ship.”

Losing Toyota should be a loud, blaring alarm for Governor Brown and the progressive oligarchs who dominate our legislature, for it’s their policies, piling on regulations and taxes year after year, decade after decade, that have made it nearly impossible to build a business here. (Just read this “Dear California” letter from a small businesswoman who’d had enough.) And for those companies that had been successful, the incentive to move finally grows too great to resist. But they won’t learn, not until it gets much worse. Like all good oligarchs, they’re isolated in their ivory tower of safe seats and unaccountability (2).

Keep watch at the I-10 crossing into Arizona: pretty soon, a lot of those taillights you see  heading East are going to be on the back of Toyotas.

And they ain’t coming back.

(1) Something progressives should acquaint themselves with, sometime.
(2) And, before anyone else can say it, yes, that’s our fault as voters.

(Crossposted at Public Secrets)

Detecting life in the CA economy, state senate moves to kill it

**Posted by Phineas


Well, at least California’s legislative Democrats are consistent: if it works, regulate it, and if it makes money, tax it. In the latest example, Senator Noreen Evans (D-Santa Rosa) has authored a bill to slap a nearly ten-percent tax on oil extraction:

The Senate Education Committee voted 5-2 — the minimum number of votes needed — to advance a bill that would levy a 9.5% tax on oil pumped from the ground in California. The aim is to raise $2 billion annually to be divided among state universities and colleges, state parks, and human service programs, according to the Los Angeles Times.

The controversial SB 1017, which was authored by Sen. Noreen Evans (D-Santa Rosa), has been dubbed a “job killer” by the California Chamber of Commerce, as it would most likely decrease oil production and drive oil companies out of California, costing thousands of jobs. One such company, Occidental Petroleum, is leaving California for Houston, Texas — dubbed “the energy capital of the world” — after being in Los Angeles for nearly a century.

Apparently it never occurred to Senator Evans or the Education Committee that a regime of low taxes and moderate regulation would generate more revenue through the jobs created both directly and through supporting businesses. Maybe she should visit Texas and take notes. Oh, and the heartland of that oil production would be in areas with the worst unemployment, our Central Valley. Why does she hate the jobless? (Or, perhaps more accurately, why does she hate the prospect of them not needing state aid?)

Instead, she and her fellow Democrats must think that being in California is so wonderful that no one would ever go elsewhere, regardless of how many burdens and barriers Sacramento creates. If so, this former California businesswoman has a message for her.

California has had an amazing economy and has an incredible potential future, but even it can be killed with enough mismanagement.  Senator Evans and her colleagues really need to review the fable of the goose that laid the golden eggs: its owner, not satisfied with the eggs the goose was laying at a steady rate, killed it to get all the eggs he thought were inside. Instead, he wound up with no more eggs and a dead goose.

Golden eggs, golden state.

PS: With the Democrats’ two-thirds super-majority broken in the Senate for now, thanks to three corrupt Democrat senators getting caught, there’s no chance this bill will make it to the governor’s desk. For now. But expect them to have it ready, if and when they regain that majority.

(Crossposted at Public Secrets)

Report: Problematic, tax cheating IRS employees received bonuses, PTO


The IRS.

Via Fox News:

IRS employees who had been disciplined for tax and conduct issues were nonetheless rewarded with monetary awards or time off, according to a watchdog report released Tuesday.

The report by the Treasury Inspector General for Tax Administration found that while for the most part the reward program for IRS workers complied with federal regulations, employees who had themselves failed to pay their federal taxes and had discipline problems were also rewarded.

“While not prohibited, providing awards to employees who have been disciplined for failing to pay federal taxes appears to create a conflict with the IRS’s charge of ensuring the integrity of the system of tax administration,” Treasury Inspector General for Tax Administration J. Russell George said.

The watchdog found that in the period from October 1, 2010 to December 31, 2012 over 2,800 employees who had been disciplined for conduct problems, including issues with federal tax compliance, had received over $2.8 million in monetary awards and over 27,000 hours in time-off awards.

The watchdog found that the more than 1,100 employees who had issues with tax compliance received more than $1 million in monetary awards and more than 10,000 hours in time-off awards.

Hmmm … I think I’m in the wrong line of work.

Seriously, this shouldn’t take anyone by surprise, considering the government’s penchant for rewarding people who don’t deserve it.   Yet it – specifically the IRS – will shamelessly, for political purposes, unfairly scrutinize innocent Tea Party groups – and are ultimately the “overseers” of Obamacare over the long term.  If that doesn’t keep you awake at night …

Almost 40% of private biz will lay off employees if min. wage increases

Minimum wage

Woman holds a minimum wage sign before an Occupy Albany rally in NY on 5-29-12. Image via Mike Groll/AP.

Via Fox News:

WASHINGTON –  Thirty-eight percent of America’s private employers say they will lay off workers if Congress agrees to raise the minimum wage to $10.10, according to a new survey by the nation’s largest privately held staffing firm.

Fifty-four percent of employers who are paying their workers the current minimum wage of $7.25 per hour say they would reduce hiring, while 65 percent say they would raise prices on their goods and services to offset the bumps in pay.

Of the 1,213 business and human resources professionals surveyed by Express Employment Professionals last month – which include whose who pay their employees the minimum wage as well as those who do not – 19 percent say they’d fire workers, 39 percent would reduce hiring and 51 percent would raise prices on their services to make up the salary costs.

I’m telling ya, the ‘good news’ (sarcasm) just keeps rolling in for the American worker under the policies (and proposed policies) of the Obama administration and their minions in Congress, doesn’t it?

Of course, Democrats will read the survey and spin the hell out of it with one or more of the following explanations/justifications:

1) Whatever losses in jobs will be “offset” by more people supposedly being “lifted” out of poverty if a mandatory minimum wage increase is passed.

2) Some people might lose their jobs, but other people will be hired elsewhere at the higher minimum wage rate (another variation of the “offsets” argument).

3) Most of these businesses could raise their hourly rates if they wanted to but they’re too greedy and don’t want to share more of their wealth with their employees.

4) It won’t be near 40% who lay off workers.  That number is just overblown.


And the beat goes on.

Of course, nationally, the likelihood that a minimum wage increase will pass is very slim – but it doesn’t matter to the left, whose sole purpose in bringing this up in an election year is to demonize Republicans and buy votes.   Modern Democrats don’t have much going for them in the way of actual success when it comes to policies and actions that lead to investment and job creation, but their sad predictability on this issue is always a sure thing.  The more strings on the American worker they can pull the better – not for the worker, but for the opportunistic left wing politician who strives to keep him/herself in power by any means necessary

Would love to hear from some private business owners in the comments about how raising the minimum wage would impact their workforce.  Thoughts?

Democrats plan aggressive demagoguery on minimum wage issue, in spite of CBO report

Money on trees

Apparently, Democrats think money grows on trees.

Via The Hill:

Democrats believe they are winning the battle over the minimum wage, despite an official budget report this week that found it would cost the economy a half-million jobs.

House and Senate Democratic aides told The Hill they believe they can discredit and overcome the CBO report, which offered ammunition to Republicans who argue a wage hike would hurt the economy.

The Democrats bolster their case by pointing to a November Gallup poll that found 76 percent of those surveyed favor raising the minimum wage from $7.25 per hour to $9.

They also argue the CBO report is contradicted by other economic research, and tout a letter pushed by the White House in which 600 economists say raising the minimum wage would have no major effect on jobs.

“This report is not a major obstacle,” one House Democratic leadership aide said.

“Really the polling is so strong in favor of the minimum wage,” another House Democratic aide said. “Do centrist Republicans really want to go back to their districts and say they opposed this over some abstract report that lots of economists have criticized? There is just not enough there, there.”

Sen. Tom Harkin (D-Iowa), the lead sponsor of the Senate bill to raise the minimum wage, said the CBO report shows raising the minimum wage benefits a large number of people so it is a net positive.

“That’s why an overwhelming majority of Americans — on both sides of the aisle — want Congress to raise the wage, and I look forward to having this important bill on the Senate floor in the weeks ahead,” Harkin said.

Republicans say Democrats are kidding themselves.

“That CBO report showed what Republicans have been saying about raising the minimum wage – that it will destroy jobs, in this case up to one million jobs, dealing a devastating blow to the very people that need help most in the Obama economy,” one Senate GOP aide said.

The CBO report offered an analysis on what would happen if the minimum wage was raised to $10.10 per hour, as advocated by President Obama and congressional Democrats.

It found the wage hike would cost 500,000 jobs by 2016, but also that it would lift 900,000 people out of poverty by increasing incomes.

Senate Democrats say they are going forward with a likely March or early April vote on raising the wage.

In the House, Democrats are moving forward as soon as next week with the rollout of a discharge petition that would seek to force a vote in the lower chamber.

The discharge petition has the backing of about 190 of the 200-member Democratic caucus, aides say.

“We obviously hope it will win enough Republicans to pass,” the leadership aide added. “If they don’t pass it, then good policy is always good politics.”

Translation: We know it won’t pass but we’re gonna put it out there anyway because polling supposedly indicates most people are “for it” and we desperately need a “winning” issue that will lift us over the Obamacare hump – in spite of the fact that up to a million people could lose their jobs if the bill did somehow pass.

Just another shameless attempt at the left trying to buy votes from vulnerable, gullible citizens in a critical election year because they don’t have anything else to run on.  Anyone surprised? :-w

VW labor rep: We may punish the South in the future over Chattanooga UAW rejection


Union thuggery in action once again.

Via Reuters:

Volkswagen’s top labor representative threatened on Wednesday to try to block further investments by the German carmaker in the southern United States if its workers there are not unionized.

Workers at VW’s factory in Chattanooga, Tennessee, last Friday voted against representation by the United Auto Workers union (UAW), rejecting efforts by VW representatives to set up a German-style works council at the plant.

German workers enjoy considerable influence over company decisions under the legally enshrined “co-determination” principle which is anathema to many politicians in the U.S. who see organized labor as a threat to profits and job growth.

Chattanooga is VW’s only factory in the U.S. and one of the company’s few in the world without a works council.

“I can imagine fairly well that another VW factory in the United States, provided that one more should still be set up there, does not necessarily have to be assigned to the south again,” said Bernd Osterloh, head of VW’s works council.

“If co-determination isn’t guaranteed in the first place, we as workers will hardly be able to vote in favor” of potentially building another plant in the U.S. south, Osterloh, who is also on VW’s supervisory board, said.

And in just the threat alone, this repulsive union rep provides a prime example of one of the many reasons the UAW representation was soundly rejected by Chattanooga VW plant workers: thuggery, threats, and bullying.  Don’t let the door hit ya, a**wipe.

BTW, here’s how Ed Kilgore at the popular left wing site Washington Monthly spun the news (bolded emphasis added by me):

This news  falls with the predictable weight of another shoe dropping, but it’s interesting that it’s happening so fast, even as conservatives everywhere are still celebrating the successful intimidation of VW workers in Tennessee by local Republican politicians:

Got that? Both sides of the debate presented arguments for or against the UAW proposal, and ultimately the anti-UAW group decisively won.  As a result of the vote not going their way, a VW labor rep essentially tells the TN workers who rejected the UAW that it will be their fault if VW decides not to invest anymore in the South beyond Chattanooga.

Assuming for purposes of debate let’s say that VW did decide to build another plant in the South in the future (which would  make sense, considering Southern GOP Governors and their state legislatures have pushed hard over the last few years to make their states more friendly to businesses), not hinging any deal on potential unionization.  Yet when they do try later to unionize the plant – and you know inevitably they would, workers there are going to feel obligated to vote in favor of it because they’ll remember this threat and want to keep their jobs.

But it’s Republicans who are “intimidating” VW employees (and potential future employees).  Oookay. Right is wrong, wrong is right, and the facts just don’t matter to the left, especially when it comes to healthcare and, of course, jobs – as we’ve seen quite a bit over the last couple of weeks.  It’s maddeningly pathetic, but predictable all the same.

(Hat tip: Memeorandum)

WH: Min. wage hike wouldn’t lead to up to 1 mil job losses like CBO predicts

Obama confused

Math easily confuses this administration.

Via the Washington Free Beacon:

A top White House economist says that President Obama’s minimum wage increase will have “zero effect” on employment, despite a CBO report that the proposed hike would likely eliminate 500,000 jobs.

“Our view is that zero is a perfectly reasonable estimate of the impact of raising the minimum wage on employment,” Council of Economic Advisers chairman Jason Furman said on a conference call with reporters shortly after the report came out.

Furman said the CBO was out-of-step with the White House’s views on the proposed 40 percent hike, though he praised the report for highlighting wage boosts that will accompany the hike.

“Sometimes you have respectful disagreement among economists,” he said of the parts of the study that did not confirm White House rhetoric about the $10.10 wage.

The CBO report found that the wage hike leave up to 1 million workers unemployed, and that the vast majority of benefits would go to middle class earners rather than those living below the poverty line.

“The $10.10 option would reduce total employment by about 500,000 workers,” the CBO said. “As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers.”

Waiting – just waiting – for anyone in the administration, or a Congressional Democrat, to spin this the same way they did a week and a half ago when another CBO report provided troubling numbers on future employment in the US as a result of the eventual full implementation of Obamacare. National Review’s Jonah Goldberg wrote at the time:

The Congressional Budget Office issued a politically explosive report this week, finding that Obamacare will reduce the number of hours Americans work by the equivalent of 2.5 million full-time jobs. This is different from killing 2.5 million jobs, Obamacare defenders are quick to insist. This will be a shortfall on the supply, not demand, side. In other words, people with health insurance will opt not to work in certain circumstances if they know they won’t lose their coverage.

Democrats insist this is a boon. Indeed, many are talking about it as an act of liberation (which reminds me of an eleven-year-old headline from theOnion: “IBM Emancipates 8,000 Wage Slaves”).

House minority leader Nancy Pelosi says the CBO report vindicates Obamacare, because “this was one of the goals: to give people life, a healthy life, liberty to pursue their happiness. And that liberty is to not be job-locked, but to follow their passion.” […]

Right. “Job-locked.” How dare you be obligated to have to work for a living to pay your bills and be a responsible adult. You follow YOUR passions, while the rest of us go to work to pay for them!  Those of us who haven’t lost our jobs once the minimum wage is raised, that is …

(Hat tip: Memeorandum)

Related: From PJ Tatler – WH: Employers Can Prevent Job Losses After Minimum Wage Hike by ‘Accepting Lower Profit Margins’

Shocking new poll lists unemployment as America’s top problem

Looking for a job.

All they want is a job.

Gee, ya think?  Via The Hill:

Unemployment is now the #1 problem in America, according to a Gallup poll released Monday.

After the government shutdown in October, “Government/Politicians” ranked #1 as the top problem in America through mid-January, when legislators passed a bipartisan budget deal.

After that, there was a 11-percent drop among Republicans who listed “Government/Politicians” as the top problem, from 26 percent in January to 15 percent in February.

The new poll shows that unemployment is now the top issue — an increase of 16 percent from January.

Republicans, Democrats and independents all said “Unemployment/Jobs” was the top problem, but the jump was the greatest among Republicans, from 11 percent in January to 24 percent in February.

The second-biggest problem was the “Economy in general,” followed by “Government/Politicians,” “Healthcare” and the “Federal budget deficit/federal debt.”

The poll was conducted Feb. 6-9, and was in response to the open-ended question: “What do you think is the most important problem facing this country today?”

The poll also found that only 22 percent of Americans are satisfied with the way things are going in the U.S., similar to the 23 percent found in December and January, but up from a 12-month low of 16 percent in October during the shutdown.

The all-time high on this measure in Gallup’s history was 60 percent in March, 2003, while the low point was 7 percent in October, 2008, according to the group’s analysis.

“Economic issues again lead Gallup’s measure of what Americans see as the most important problem facing the nation,” said an summary by Gallup.

It IS a big problem, yet five years after the so-called “stimulus package” passed, President Obama, his administration, and Congressional Democrats say the stimulus worked, proving once again just how out of touch Washington, DC liberals are with the American people.

Is it November yet?

Pres. Obama applauds decision by CVS to stop selling tobacco products


Smart move?

The Associated Press – by way of ABC News – reports that CVS drugstores across the country will stop carrying tobacco products by October 1 because it wants to look like a more ‘health-friendly’ store (via):

CVS, the nation’s second-largest drugstore chain, is kicking the habit of selling tobacco products as it continues to shift its focus toward being more of a health care provider.

The company said Wednesday that it will phase out cigarettes, cigars and chewing tobacco by Oct. 1 in its 7,600 stores nationwide, in a move that will help grow its business that works with doctors, hospitals and others to improve customers’ health.

The move is the latest evidence of a big push in the drugstore industry that has been taking place over several years. Major drugstore chains have been adding in-store clinics and expanding their health care offerings. Their pharmacists deliver flu shots and other immunizations, and their clinics now manage chronic illnesses like high blood pressure and diabetes and treat relatively minor problems like sinus infections.

Among other things, they’re preparing for increased health care demand. That’s in part due to an aging U.S. population that will need more care in future years. It’s also the result of the millions of people expected to gain health insurance under the health care overhaul.

As CVS has been working to team up with hospital groups and doctor practices to help deliver and monitor patient care, Chief Medical Officer Dr. Troyen A. Brennan said the presence of tobacco in its stores has made for some awkward conversations.

“One of the first questions they ask us is, ‘Well, if you’re going to be part of the health care system, how can you continue to sell tobacco products?'” he said. “There’s really no good answer to that at all.”


“We’ve come to the conclusion that cigarettes have no place in a setting where health care is being delivered,” said CVS CEO Larry Merlo, who noted that many of the chronic conditions their clinics treat are made worse by smoking.

I call BS on that. Think about any number of other products that CVS sells that is harmful to your health: ice cream, candy, beer, soda, sugar, processed foods, etc.  Will they stop selling them as well?

Of course, the President couldn’t help but weigh in, insinuating like the good narcissist that he is that CVS did it to help … his anti-tobacco initiatives:

The company’s tobacco plan drew praise from President Barack Obama, who said the decision will help his administration’s efforts to reduce tobacco-related deaths, cancer, and heart disease, as well as lower health care costs.

Tobacco is responsible for about 480,000 deaths a year in the U.S., according to the Food and Drug Administration, which gained the authority to regulate tobacco products in 2009.

First things first: Ultimately, this was a free-market decision and if CVS wants to move more into the direction of “health care provider”, that is certainly their right.  Secondly, I have never smoked a day in my life, have never even been tempted to, and have had family members die as a direct result of smoking and what it did to their lungs.  It was extraordinarily painful to see. I wish people wouldn’t smoke.  But I also believe in the concept of free will – both for drugstores like CVS and consumers.

That being said, as I hinted above, why stop with tobacco products? If we’re using the number of related deaths a year to determine whether or not a product should be pulled off the shelves, why not food that’s bad for you, that leads to obesity, heart problems, diabetes, etc?  Per the Surgeon General, an estimated 300,000 deaths a year are due to obesity.   And how about the health risks associated with alcohol?

There are approximately 88,000 deaths attributable to excessive alcohol use each year in the United States.1 This makes excessive alcohol use the 3rd leading lifestyle-related cause of death for the nation. Excessive alcohol use is responsible for 2.5 million years of potential life lost (YPLL) annually, or an average of about 30 years of potential life lost for each death. In 2006, there were more than 1.2 million emergency room visits and 2.7 million physician office visits due to excessive drinking.3 The economic costs of excessive alcohol consumption in 2006 were estimated at $223.5 billion.

Those are pretty devastating numbers. So why won’t CVS pull alcohol from their shelves as well?

Honestly, I”m just curious why tobacco alone was targeted, considering there are so many other harmful products CVS sells that could lead to poor health and/or even death for their customers.  I mean, if you’re really wanting to be on the cutting edge of bold health care decisions, why not go whole hog?

As I side note, I find it interesting the number of  liberals who have applauded CVS’ move to no longer sell tobacco products, which is just a bit  hypocritical considering their constant emphasis on “choice” and “personal decisions” and “access.”  Of course, the same liberals who have praised CVS over their eventual pulling of tobacco items off the shelves are the same types who scream from the rafters over the idea that a pharmacist would refuse to fill a birth control prescription on religious grounds.

Go figure …