California Officials Sound Industry Alarms

Article excerpt

LOS ANGELES _ For decades, California could just lie back and rely on its seemingly irresistible lures to companies and people. If one plant shut or left, two more seemed to blossom amid the palms, and the state's economy consistently outpaced the nation's.

But suddenly California's political and business leadership has been jolted into action. They have belatedly started to mount a rear-guard action intended not to attract new industry but to prevent businesses from running away.

Among states encouraging businesses to flee was Oklahoma, the first state to open a California trade office, according to Roy Williams, assistant director of the Oklahoma Department of Commerce. Established about a year ago, the office is located near Irvine.

Williams said a California Department of Commerce study, which polled 632 company executives, showed 57 percent were seriously considering moving to another state or restricting their expansion in California.

Oklahoma's comparatively low power costs and low water and sewerage rates are attractive to those considering a move, according to Mike Skaggs, commerce director of corporate site locations.

Colorado, Nevada, Utah, Arizona, Oklahoma, Oregon, Idaho and other states have found easy pickings in California, as has nearby Mexico.

And this week, the commissioner of economic development of the U.S.

Virgin Islands, Eric Dawson, was planning to make a pitch to business leaders in Los Angeles.

The sales pitches are not restricted to small groups. Commuters on Southern California's freeways often hear this ad on the radio: "If your business is based in California, then you already know it means putting up with traffic congestion, smog, over-regulation, high costs and an irritable work force that result in lost revenues . . . Now is the right time to cash out of California and go to Pueblo, Colo."

Pueblo has attracted five plants from California. "All these companies are leaving, and nobody is listening in the Legislature _ I just smile," said Harold E. Mabie, who runs the one-man California office of the Pueblo Economic Development Corp. "I've been working on a lot of companies the last six months."

Now California has begun to strike back.

The California Chamber of Commerce recently organized a Task Force on Saving California Jobs, which has urged the state to lighten what it considers the excessive burdens of taxation, environmental regulation and workers compensation insurance. …