LA Times Blames “Geography” for Business Moves

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The Los Angeles Times went on the offensive Friday sticking up for California’s battered business climate in the wake of Toyota’s big move to Texas. In a multi-front campaign, the paper’s front page had a featured news article with charts to argue that California businesses are doing fine relative to Texas. The editorial page carried a lengthy editorial answering its own question if California was bad for business (think again, the editorial advised). In addition, there was an editorial cartoon aimed at the Texas “rustlers,” while the cartoonist wrote a column on-line attacking Texas.

All on the same day.

The Times’ volley of ink on the business situation in the Golden State can be summed up in the paper’s headline over the news story as it continued on the inside pages of the paper: “Moved Based on Geography.”

Is it?

The Times points to Toyota executives claiming that the move has nothing to do with displeasure with the business conditions in California, but rather the need to find a central geographical location for its sales and marketing operation closer to manufacturing. (Remember, Toyota already moved its last manufacturing plant out of California a few years ago.)

Indeed, Toyota mentioned geography in a letter to Governor Jerry Brown about the move. Also, in that letter was a list of Toyota operations that would remain in California. Of course, with these functions remaining in the state, it is prudent of Toyota executives to be careful not to upset California politicians about a difficult business climate. Better to talk about geography.

The Los Angeles Times news article said that Occidental Petroleum was moving its headquarters for geographical reasons, as well — to be closer to the Texas oil patch.

There is a pretty big reserve of oil and gas in California, too, but the state’s regulations make it harder to tap. There is also the constant threat of a drilling moratorium and new taxes on oil in the Golden State. These threats to the oil and gas business offer an inducement to consider moving to another state. The threats to the oil and gas business were not mentioned in the Times’ article.

To be fair, the editorial does offer a warning that California policymakers “need to pay attention to the costs that make California less attractive to business.”

Nothing new there. CEO’s in an annual survey consistently rank California at the bottom in the worst state to do business. The Tax Foundation places California near the bottom in its State Business Tax Climate Index.

By emphasizing geography as the chief problem spurring business relocations, pressure is alleviated on lawmakers to make changes needed to encourage businesses to remain in California.

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