Thursday, August 20, 2009

Protesting unfavorable business climate

On the likely closing of California’s only auto plant, SJSU economics dept. chair Lydia Ortega summed up the state’s problems in an interview with KPIX-TV tonight: “We want to do more to protect wetlands than we want to do to protect jobs.”

This was the postscript on a videotaped report that the United Auto Workers were outside the Fremont plant with protest signs says “Save NUMMI Jobs.” KPIX has video of the protest but not Prof. Ortega.

Somehow I must be missing something: how is having a bunch of angry union workers out there protesting in front of the Toyota facility going to make the employer more likely to keep the plant open? (For example, wouldn’t a rational employer want to get rid of a plant filled with angry workers who march around with protest signs?)

Prof. Ortega is right: business climate is a longstanding issue. Nevada is running ads to aid the ongoing migration of businesses to the casino state. In April, a dozen state legislators heard why

Attendees heard from more than a dozen businesspeople who complained of high workman's compensation insurance, "predatory" regulators, an unfriendly business climate, a "never ending paper trail of business forms," exorbitant utility expenses, fees, taxes, quality of life and overpriced overhead.

Steven Patmont, president of the company that manufactures "California Go-Ped" motorized scooters, said his company left California for Nevada because California doesn't appreciate business. He described how California regulators hit him with hundreds of thousands of dollars of small fines even though his company has a stellar safety record.

Villines said he was disturbed to hear so many speakers say that no one from California tried to convince them to stay while Nevada officials have helped businesses scout potential factory sites and have generally made themselves available to business people. Villines said the testimony clearly indicates California isn't business friendly.
So at least two SJSU professors would ask: if blue-collar workers want more manufacturing jobs in California, how about demonstrating in Sacramento to make the state a more favorable business climate for manufacturing?

I can only speculate at possible reasons. Is it because that the unions don’t want to antagonize their customary political allies? Is it because they are so trapped in their Marxist class warfare mentality that they don’t understand the basic economics of job creation? Is it because confrontation is a better career move for union leaders than cooperation?

(BTW, Toyota denies that it’s decided to close the Fremont NUMMI plant, while other reports say Toyota is seeking another partner).

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