Chevron will move 800 jobs to Texas

Chevron’s decision is just the tip of the iceberg. With among the highest property, sales, and income taxes in the nation and an obsessively over-regulated business environment, California will have an increasingly hard time attracting new businesses to the state and keeping existing ones from moving away.

I think TL’s analysis is simplistic to the point of being just an(other) excuse to complain. sfgate’s article on the move indicated that the jobs are being sent out for operational efficiency — they really have always belonged in Houston, which is the epicenter, the Silicon Valley, of the oil patch.

If it was otherwise, like the business climate, I do not think that Chevron would’ve missed the opportunity to say so. In fact, their spokes-minion talked instead about the company’s “commitment” to CA. Of course, a company is committed until it isn’t, loyalty not being in the DNA of any publicly-held company (by definition), but they never mentioned CA’s inhospitality.

So complain on, TL if you must, but choose your subject better.

TL is right on. I travel most of the time. When folks in the “free states” ask me about California politics, I say, “California is full of nuts, flakes and kooks. They vote for nuts, flakes and kooks”. That’s how we got into out present situation and the is absolutely nothing happening to change things. We will continue to lose good jobs, with no chance of replacing them. Why would a prudent businessman move to California or start a business here? We have great weather…..everything else is better in Texas and many other places.

TL’s analysis may be simplistic, but it’s accurate. I don’t know about Dave, but I live here because I can’t relocate (until I retire). When I moved here over 35 years ago, CA was business friendly, tops in education, and had reasonable taxation. It still has great weather and excellent cultural oportunities, but that’s about all it has to recommend it today. Detroit died because the city and unions milked everything they could from big companies until Japan, Germany, and Korea took over the automotive industry.

I agree with Dave. There are two kinds in California. Those who have lived here all their lives and don’t know any better,or don’t care, and those who moved here, witnessed the bizarro world first hand and can’t wait to get out (like me). The weather is a golden anchor.

For those who don’t understand that larger CA businesses and job creators are moving non-location-specific jobs out of state as soon as they can with the least amount of internal disruption (or riots/lawsuits) are delusional and losing sight of the facts (yes, you JRM and Citizen Paine). Two of the largest CA health companies are moving non-care related corporate opps to Colorado & Arizona respectfully (I won’t name them to protect my sources) and Chevron is clearly doing that with the recent re-orgs that moved/outsourced jobs to Manilla, Buenos Aires, and now Houston. I have worked at Chevron and so has my wife at different times that span from the 1990’s into the 2010’s. Neither of us were ever laid off or re-org’ed out, so this is not sour grapes in any way. It was always clear that Chevron is first and foremost an “energy company” where its IT operations (and most “downstream” opps) are an eyesore cost center to be downsized or moved to “least cost geographies”… Yes, that is a REAL term used internally. It all started back in the 2000’s with the move from SF to San Ramon + Concord and then the re-orgs mentioned. There are ZERO incentives for these companies to operate here with the regulatory and tax situation in this State. If they could get a good price for the Richmond and El Segundo refineries (and release of liability), they would be GONE from CA within 18 months. Bet on it! Silicon Valley is fine and great for Tech/Biotech but for every Facebook on the grow, there are many more decliners like Yahoo! and Ebay trimming people + operations or that get acquired for cheap (Sun, 3Com, etc) and stripped down/assimilated. California is great for many things, but retaining or attracting Fortune 500 companies is NOT one of them.

JRM – apparently you do need me to keep this discussion on topic… all my comments were to the topic, which you have a hard time sticking to…large companies in CA sending jobs and moving elsewhere is a FACT… I love Danville and the surrounding community as well…BUT THAT IS NOT THE POINT…read that again please.

I can still love living here and still know and recognize the economic facts of what is going on around me and in this State… I’m also a business owner and have seen that side of the issues. Despite your assumption, I’m not blindly defending Chevron’s environmental record, but then again, the refinery there was built there BEFORE Richmond was even an official city and LONG before a large percentage of Richmond and the surrounding towns grew up around it….why did they grow up around it?!?!…because the jobs were THERE…and Chevron’s property and other taxes funded other development…hmmmm and housing was cheap…wonder why?!?!?!… It has been there for OVER 100 YEARS and Chevron wouldn’t otherwise consider selling it if the EPA and State authorities don’t make it near impossible to operate, update, renovate, and innovate it. Some isolated incidents like this year’s fire aside, Richmond residents always decrying the refineries (Chevron’s is not the only one) even existing there is akin to the new homeowner along the 100+ year old golf course getting pissed off because golf balls keep breaking their windows… Really?!?!?! or others building homes in a flood plane wondering why they got flooded after a big storm or levee break… hmmm

If you can stay on topic, we’d like to hear your insights rather than “if you don’t like it, just leave”… what are you, 12?

All the right wing echoes who argue that California should compete in the race to the bottom along with Manilla, Buenos Aires and Houston have been drinking the Koolade just a bit too long. “When I moved here over 35 years ago, CA was business friendly, tops in education, and had reasonable taxation.” That’s true. But we cut the taxes (Prop. 13 in the 70’s, Schwartzenegger’s elimination of the vehicle registration fee which originated in the 1930’s, etc.) with the result that public funding of education has been slashed. And those horrible “regulations” you folks fulminate about have made it so we can actually breath the air. I was here in the 60’s and 70’s before those nasty “regulations” were passed, and you could see what you were breathing (or, more likely, coughing.)

Oh, and the ignorance displayed by the comment that there are “200,000 people leaving California” — ignoring the fact that 200,000 other people are moving here from other states at the same time — is a classic example of “Fox News” worthy propaganda victimhood.

It’s true – if you want to set up a minimum wage sweatshop you probably wouldn’t choose California, all things being equal. You’d choose China, or Pakistan, or Sri Lanka. Do you folks really want to make California more like those places? Is that your dream state?

Yes Matty, I am 12….just old enough to be amused by maladjusted ex Chevron employees living in Blackhawk lecturing us all about how our state is going to hell in a handbasket. I hope your business has a prosperous 2013…oh but on second thought that would defeat your whole dismal hypothesis now wouldn’t it?

Thank you “Old Danvillian”…wisely said, I agree completely..

Man, you guys are obtuse…did I say do away with ALL regulations, taxes, etc… no.. I clearly said BALANCE… CA is absolutely UNBALANCED toward corporations in these areas and the proof is all there regardless of which publications and sources you choose to accept or reject.

How is my endorsement of relocated companies that used to provide thousands of engineering and other white collar/college educated jobs in this state promoting a race to the bottom? That is just ludicrous. Maladjusted, JRM? Hardly…INFORMED. You have not provided ANY cogent arguments or facts to your positions…just pontificating opinion about where you prefer to live… again, NOT THE TOPIC.

And while others in this thread did, I did NOT promote other states…merely presented facts on where companies are moving… and , Huh?, YOUR fact about per capita income is a red herring. Using 2011 numbers, CA is only 10th in the nation but WA, MN, UT, CO, WY are only different by LESS THAN $2K per person…and the costs of living in those states are radically lower. (I know, JRM, you are just begging to say again, then why don’t you just move there, Matty). No, we need to FIX CA, instead of continuing with collective heads in the sand.

Sylence – I appreciate your post, but I’m not oblivious to the way the “old world” jobs are changing. I was a 1099 by choice for 17 years after leaving Chevron while creating/working at software startups and consulting, and just became a W2 at another. But that world is clearly not for everyone…certainly not a majority of college grads. The bottom line is that Chevron (and in your case a DefCon) gave me the training and real-world experience after college to boldly go where few were willing to go. Most of my colleagues stayed at Chevron or ultimately ended up at “stable” places like Oracle, KP, etc. It is a very small percentage who will (and who did) brave the entrepreneurial waters…especially right out of school..unless they come from money and have that safety net in case of failure. As noted, Chevron ITC is moving jobs and is not hiring from colleges. It is essential to have the Chevron’s, Kaisers, PG&E’s, AT&T’s, Lockheeds, Northrops, etc as stable entry-level job opportunities and training grounds for future business leaders developed internally or by eventually leaving those companies and doing it on their own. VC/Angel money will not be as easy to come by as it was in the 90’s, and it is more difficult to start up in CA than it is in other states… yes, there is incredible web 2.0/3.0 talent here, but it is such a small part of the job picture. I have several neighbors with kids graduating with solid degrees from excellent schools in the last 2-3 years that still don’t have jobs… My company had over 100 inquiries for an entry-level marketing spot and about 75 for a sales spot in the last few months. The opportunities are few and getting fewer in the aggregate. The data cannot be any clearer…

Moving to Houston would suck. What a dump. And hot too.

That’s one thing I like about living in Danville. Most of the houses are ugly, but they’re hidden behind bushes & trees & whatnot so you don’t have to look at them.

Chevron gets taxed differently than other California companies, to its disadvantage. In 2009, California finally realized that they were chasing jobs away by taxing companies based on the payroll, property, and sales in the state, so they changed the law so now they tax companies based on California sales only. But that law change doesn’t apply to oil companies like Chevron. They’re still taxed based on payroll, property, and sales in the state. So Chevron has a tax incentive to move payroll out of the state. I would expect Chevron to continue the trend of moving jobs out of state.

My next door neighbors are geophysicists. Both work for Chevron and will be moved to Houston. They’re good people who contribute a lot to the community. Sad to see them go. I understand these 800 jobs that are moving pay well. That’s too bad. No doubt that will affect Danville businesses.

Matty,

I can understand and appreciate your points. I cannot definitively state that your prognosis for what may occur in a generation or so is wrong. I suspect that you would also acknowledge that it’s a well-intended best guess as well. That stated, let’s look back for just a moment to see if we might glean useful from past experiences as the world unfolds tomorrow.

While always debatable, most consider the gilded age of contemporary innovation and inspiration to be the mid-70s to the early to mid-90s in this state. Again, agree or disagree, please bear with me. Whether it was Noyce and Moore at Intel or Jobs and Wozniak as emergent tech savvy entrepreneurs at Apple as well as established corporate tech titans, Bill Hewlett (CEO till the late 70s) and Dave Packard (stayed on as COB till the early 90s), they predominately chose CA to grow and sustain their organizations. The same is clearly evident for the big defense firms that established their foothold in this state much earlier. The question is why?

I believe it was because of this state’s prized university system (all tiers from Private, UC, CSU and JC) and the secondary / primary education afforded to most through our public school system to produce highly qualified, workplace ready individuals at a relatively modest cost (i.e. highly subsidized) – certainly in comparison to today. On a personal note, I consider myself privileged to have been one of those students. Where did this prized university system arise?

To answer, most will accredit Pat Brown, Sr. (Gov. from ’59 to ’67) as the principal architect and administrator of the state’s ‘Master Plan’. During his tenure, I believe that at least 4 CSU and 3 UC campuses opened. Where did he get the funding, in general? Most consider this state’s greatest revenue generators after WWII and till perhaps the mid-90s was aerospace and agriculture. Right or wrong for the sake of discussion, we move on.

In a time when Federal tax rates for the top tier earners where 70% or greater (Kennedy rates), cap gains rates were on the order of 28% or so, and there was no Prop 13 to constrain property rates and overall tax burden on both companies and individuals alike which afforded our K-12 institutions relatively abundant budgets, we had growth, innovation, nearly unbridled capitalism and, yes, very modest tuition costs at renowned universities.

So what gives in today’s environment that wasn’t in existence then? Nearly worthless question with a million dollar answer. In my own opinion, I like to believe that the Cold War was capitalism’s best friend for almost five decades (’46 to ~’92). The billions on billions that poured from Federal coffers into this state would have been labeled criminal if they were not first considered patriotic. The closing of a vast array of pre-WWII military bases across the entire state left whole communities reeling. It wasn’t that long ago when AT&T (post break-up no less) still ran many of our National Lab’s for $1 USD as a service to the Federal government on a past commitment to President Eisenhower. It is inconceivable that any organization could do this today.

I’ve surely not offered a useful answer to the question i’ve poised that gets at the ‘vicious cycle’ you highlighted. Sadly, perhaps what we need is another all consuming Cold War with an evil red state, etc. that will afford everyone’s child a relatively inexpensive college education and a great job afterwards. I emphasize sadly…

Sylence:
I believe we do have an all consuming cold war. I (and many others) refer to it as the PPWT (Perpetual Phony War on Terror), or as inCurious George used to call it, “Gittin’ them evil-doer’s”.