2010 Archives

SMU dean says much of California's loss is Texas' gain


The following is from the March 15, 2010, edition of The Dallas Morning News. Professor Albert Niemi, dean of SMU's Cox School of Business, provided expertise for this story.

March 15, 2010

The Dallas Morning News

Al Niemi, dean of Cox School of Business at Southern Methodist University, is an expert on why businesses leave states.

He sees California as the next Michigan.

"Over the past 30 years, Michigan pretty much lost the auto and truck industry to the Sun Belt. When Honda, Toyota, BMW, Mercedes-Benz, Hyundai and other international competitors came to the U.S., they almost exclusively chose Sun Belt locations," he says.

"The same thing is now happening to California." And this time, companies are beating a path to Texas.

Niemi cites a study done by Bain & Co. a few years ago that surveyed the CEOs of all companies headquartered in California.

"Forty percent said they were making plans to leave the state," Niemi says. "Of those planning to leave, 35 percent said they would likely move offshore to find cheaper labor, 36 percent said they were planning to move to Texas and the remaining 29 percent said they would relocate somewhere else in the U.S."

If you compare Texas to California and places in the Northeast like New York, the only comparable factors are quality of life and global airport connections, he says. In everything else, Texas, and D-FW in particular, wins.

"When you compare the cost of doing business in Texas with California and New York, it is a no-brainer – you move to Texas," he says.

Read the full story.

# # #



Find an Expert