I totally understand why Toyota would want to leave California. I often wonder why any manufacturing business would remain in California. I actually have thought about whether there is a private equity opportunity to buy California manufacturers and make money by moving them to lower cost jurisdictions.
I am particularly sympathetic this year. We have four or five campground opportunities where we could be making money this year by making investments in these facilities. But these initiatives would all take my time, and my time has been 110% devoted to catching up on regulatory compliance issues, particularly in California. Every state has stupid compliance requirements, but California stands out for two reasons
- It has a lot, lot more of these requirements
- The cost of non-compliance is way higher than in other states. You don't just get an order to clean up your act in 60 days, you get slammed with tens of thousands of dollars of legal fees from predatory law firms that have been given a hunting license by the state legislature to seek out and reward themselves when they find non-compliance minutia (e.g. numbers on the paycheck in the wrong font size).
So I totally understand why Toyota is coming to Texas. But also note that the state of Texas handed Toyota tens of millions of dollars in taxpayer money for the move, money for which smaller and less politically-connected companies don't qualify. This corporate relocation incentive game is one of the worst uses of tax money, as it produces no new economic activity, but simply shifts it across arbitrary lines on the map.