More Green Companies Heading for Greener Pastures

George Rebane

[This piece is the third of a four part series on taxes, jobs, and income that includes, in order of posting, 'The Administration Discovers Shortage of Engineers', 'Higher Tax Rates = Lower Revenues',  'More Green Companies Heading for Greener Pastures', 'Employment and Income Inequality'.]

The left controlled lamestream has long touted the spawn of California’s AB32 as being the salvation of an economic new age for the state.  Well, as some of the shouted down voices attempted to inform the public (RR being one), not only has the heralded venture capital pulled out, but now we have the green companies themselves doing everything they can to minimize their California footprint.  They are either relocating, or expanding their subsidized operations in friendlier climes.  Consider the following from Kurt Brower’s Marketwatch Blog

1. Aptera Motors:

…the North County Times reported that Aptera, “which once had big plans to hire thousands to design and manufacture ultra-efficient cars in Oceanside, is trimming costs by moving its headquarters to Carlsbad while it searches for a factory in the auto-rich region east of the Mississippi River. ‘We are really scrutinizing our business,’ said Paul B. Wilbur, president and chief executive of Aptera Motors …. Wilbur said Aptera is likely to end up in a factory east of the Mississippi River …. Wilbur had previously said that Aptera would eventually employ 2,500 people. He also said 10,000 jobs would be created indirectly for component suppliers, retailers and other companies involved with Aptera. Source: North County Times story, May 17, 2011, “Manufacturing: Aptera to move headquarters to Carlsbad, place car factory out of state.”

2. Calisolar Inc.

…Calisolar Inc., a “green” company, is making a $750 million investment in Ontario, Ohio… Construction is expected to begin by October at a former General Motors plant. The Bucyrus Telegraph Forum reported that the company “would create 831 full-time positions at an average wage of $45,000, generating $37.3 million in annual payroll” with priority given to hiring local workers. Also, “About 1,000 construction jobs will be needed to ready the former GM plant” that will “marry an industrial process into a green energy solar sector .… Source: Bucyrus Telegraph Forum April 6, 2011 story “Calisolar in final stages of talks for Ontario site.”

3. Fallbrook Technologies Inc.

…The Austin American-Statesman reports that Fallbrook Technologies Inc., a company offering “green” technology improvements, which “has run its operations division from Cedar Park since 2002 , would agree to spend $5.5 million on a larger corporate operations center that would add at least 65 jobs by 2013 …. The company would use it for light manufacturing, engineering development and testing …. Fallbrook currently employs 60 people in Cedar Park …. the company will agree to maintain a combined payroll of $9.5 million by 2019 …. the company has two facilities in Cedar Park, one housing a test lab and a second for design engineers, both of which it has outgrown. “They’re both extremely crowded,” said a company spokesman. “We’re hiring people every month and we’re wondering where we’re going to put them.” Source: Austin American-Statesman, May 25, 2011 story, “Cedar Park to weigh $1.68 million incentive package for Fallbrook Technologies.”

4. Sharp — Solar Energy Solutions Group

…According to The Columbian, this “green” group will relocate from Sharp’s western regional office in Huntington Beach to its campus in Washington State…. Sharp Corp. is one of the world’s leading manufacturers of solar cells and has been mass producing solar cells since 1963. It produces solar cells at two factories in Japan, and uses the cells to manufacture solar modules in five factories around the world, including one in Tennessee. Its website says the company created the world’s first solar-powered calculator and that its products power more homes and businesses than any other manufacturer.” Source: The Columbian, June 10, 2011 story, “Sharp Solar to move to Camas.”

5. WindStream Technologies, Inc.

…The company created small wind turbines designed for residential energy use, and Bates said WindStream is on pace to produce more than 40,000 units in three years …. New Albany could benefit from the 105 new positions WindStream plans to add …. A California native, Bates said several states vied for WindStream when the company launched. Source: New Albany News and Tribune, June 6, 2011 story, “Vote on Windstream loan likely to be tabled by New Albany council.” Additional Information: The New Albany News and Tribune reported earlier WindStream Technologies, Inc. will develop a multi-million dollar investment production facility in the New Albany and Purdue Research Park of Southern Indiana … by 2012. “The company — currently located in California — manufacturers wind turbines called TurboMills.” Source: New Albany News and Tribune, Nov. 23, 2009 story, “WindStream Technologies bringing 260 jobs to Purdue Research Park in New Albany by 2012″

And your Lucky Strike Extra is that California companies’ bums rush for the exits has now become a gallop.  Today there are thriving companies consulting to the state’s businesses wishing to relocate elsewhere – talk about a hot sunset industry that you might want to get into.  The exit rate today has grown to five times the 2009 rate, and it is still increasing as reported by The Business Relocation Coach.

Meanwhile, as these pages witness, the progressives are all arguing for raising more income tax from the state’s ‘rich’ who already account for about 70% of state revenues.  Anyone have any idea when the left will get a clue?

(H/T to RR reader for the latest heads-up.)

Comments

[Russ Steele]

The rate that all companies are leaving California is accelerating, details at NC Media Watch. [Apologies for not inserting the link to NCMW where Russ had posted an earlier piece on the topic that I failed to note earlier. gjr]

[S. Rogers]

Very interested. Being a member of the moving and relocation industry, I am aways wondering when California movers might be able to tap into some of this technology. Does green automobile technology, as it is currently, imply a lack of power? I guess my question is, can semi-trucks every get to the point of being truly green?

[S. Rogers]

Sorry, I mean very interestING.

[J Cutter]

To provide some balance on what I consider to be unrelated issues Mr. Rebane wants folded into the tax debate, I read all the articles, and here is my take:

1. Aptera - DOA without funds. Caught outsourcing in the past, flawed concepts, fired execs, production delays, etc.
http://green.autoblog.com/2011/05/20/aptera-seeking-manucfacturing-facility-outside-of-california/

2. Calisolar - hardly committed, but spending DOE funds if done, & they are walking into existing space.
http://blogs.wsj.com/venturecapital/2011/06/17/calisolar-to-doe-thanks-for-the-offer-well-think-about-it/

3. Fallbrook - failed/stalled IPO, only revenue appears to be via acquisition of a TX company, ten years of what?
http://www.xconomy.com/san-diego/2010/02/16/fallbrook-technologies-files-for-50m-ipo/

4. Sharp Solar - will be sharing the existing campus with its Japanese mothership, employs 35, and maybe less on consolidation - (failing division?)
http://www.columbian.com/news/2011/jun/10/sharp-solar-to-move-to-camas/

5. WindStream - A pure start-up, that appears to be working the subsidized lotto.
http://newsandtribune.com/local/x880612003/Windstream-will-not-expand-or-add-105-jobs-in-New-Albany

If these are the best indicators of the crisis, I am not convinced. Many sound like other publicly funded development schemes/scams I have heard (Plasmatronics in Indiana anyone?), and others looking for a fresh start - that may have the potential to succeed, but in this economy are of obvious higher risk.
Beside this, I still say the sweetest is the R&D/incubation phase that has benefited Silicon Valley the most over the years. Production is all $$'s that, like any import/export, is tough for an advanced burden economy to compete.

[George Rebane]

Good summaries JCutter. To expand, how do you co-mingle the "R&D/incubation phase" of Silicon Valley, funded by private money, with such a phase of green industries funded by the taxpayer and mediated by bureaucrats (who are not in the reward loop and whose smarts are always in question)?

[J Cutter]

"...how do you co-mingle the "R&D/incubation phase" of Silicon Valley, funded by private money, with such a phase of green industries funded by the taxpayer and mediated by bureaucrats (who are not in the reward loop and whose smarts are always in question)?"

I don't.
And I take issue with your analysis that Silicon valley was solely funded by private money, as at it's core, companies such as HP, Fairchild, etc. were extensions of the research centered at Stanford & the Naval Air Station (my great uncle worked for Ames), and much of their tech was commissioned.

Though my lay perspective may ring as heresy to the more involved such as yourself, on principle, I am not in favor of public funds being implemented in the private sector to develop tech with more than a highly regulated, but passive role as lender insurer (not unlike the original SBA). I even believe that the beast of gov has grown beyond the point of being a viable source of innovation from within its ranks (as NASA once did); overtaken by the inefficiencies caused in part by those same politicized bureaucrats. I'd rather chum the water with an emphasis on education, by trimming the burden of upper level science and math exposure and accomplishment, support the research done in those same institutions by those enrolled, and seek sensible Federal policies that reduce our dependence upon dated tech/science - which may cause short term pains, but spurs alternative research.

Solving the rest of the puzzle is much more involved, as the concept of subsidizing a private corporation's relocation with public funds is completely understandable in today's system, but opposes my fundamental belief that Government should not be run as a for-profit, revenue seeking endeavor.

[George Rebane]

JCutter - in my 20+ years as part of the halo of companies that supported defense R&D, I am acutely aware which way technology flowed and how research programs were really directed (including the involvement of private universities and government 'labs').

To be blunt, innovations and new technology had and still have to be secreted into government systems and programs by their civilian contractors. The state's program managers, scientists, and senior technical staff are in the main politically motivated impediments to what needs to be done to give our military the latest.

The standard path to introducing innovation is through the ‘operational types’ – the boat drivers, pilots, tank commanders, … - who then put pressure on the government systems development bureaucracy to deliver what they have been shown by civilian contractors.

To make these remarks concrete I’ll cite just two examples in which I had personal involvement – countless others exist. The cruise missile arrived in our armaments because Ryan Aeronautical (Teledyne Ryan) finally short-circuited the govt’s two competing cruise missile study programs – AF’s Harpoon and Navy’s Tomahawk – by bootlegging the modification of one of its target drones as the ‘Interim-Harpoon’ and using it to sink an old destroyer off San Clemente Island. The success of the demonstration instantly launched both Harpoon and Tomahawk cruise missile developments – study and analysis time was over. BTW, as punishment? Ryan never got a production contract for either missile – c’est la guerre.

The HP-85 was arguably the first successful desktop microcomputer. It ran a graphics-capable form of Basic, sported an attached keyboard, small built-in monitor, and thermal printer along with a removable cassette. In the late seventies optimal control and estimation theory was making large strides, but a typical interval for upgrading shipboard combat system was about seven years from engineer’s inception to becoming operational.

It was relatively simple to program the latest and greatest Kalman and Bayesian target motion analysis ‘filters’ on the HP-85 and demonstrate how they could be used in conjunction with the ‘big iron’ operational combat systems on board attack and missile submarines. The boat drivers loved the improved capability, but the development bureaucracy said no go.

So, with appropriate suggestions from the contractors, the fleet acquired HP-85s for keeping track of such things as ship’s stores and laundry (non-combat systems), and promptly installed them in the ships’ attack centers while the new algorithms were wending their way through the lengthy development cycles for integration into the ships’ operational combat systems. Where there’s a will, there’s a way.

As an aside, whenever industry found a ‘live one’ (a civil servant technical staffer) laboring away, usually ignored and unrewarded, in the bowels of a govt development lab, the engineer/scientist/technician soon was the recipient of offers s/he could not refuse. Unabashedly, I have to admit that this practice kept the govt’s aggregate talent pool at its historically acknowledged level. And I do recognize that there have always existed outstanding govt technical types to provide the three-sigma exceptions that underline the rule.

Bottom line, don’t ever underestimate the profit motive for inspiring things that keep us safe and sound and warm and well fed.

[Todd Juvinall]

Great sidebars George. The world's success is driven by profit. Even in Chad.

[Walt]

Back when the comment section was alive and well, our green nuts would swear up and down about all the green jobs that were going to flock to Ca. and OHHH SOooo many were going to move to good ol' Nevada County. Well, we have yet to see the great Birkenstock stampede. ( unless you would like to count the one leaving the state)
MAN..... The heat I took for calling it like it was. BS!!!
you can add one more "green business" to the gone list.
The "solar on the corner" in good old PV is tits up and a for sale sign is in the parking lot. But I don't think you will hear about that in the Union any time soon. And by the way,, Airhill is still closed.and presumed gone for good.

[Russ Steele]

George,

Where there is a will there is a way. In the late 70s, I attended a three day lecture given by the Navy for computer systems managers and one of the lectures was given by Grace Brewster Murray Hopper, who is considered by some to be the mother of programing languages, based on her work on COBAL. Very late in her career, she had become a proponent of desk top computing, but senior managers would not approve requests for desk top computers.

Most of Captain Hopper’s presentation was on how to beat the bureaucratic system. She pointed out the while you could not order computers, you could order parts, and make your own from the parts. She had a whole series of strategies on how obtain the needed parts, without raising suspicion from the procurement folks. Part of that strategy included Radio Shack and the petty cash account. When it came to hooking up the computers so you could exchange information she recommended sending the best looking young woman on your staff, with the shortest skirt to find the local telephone installer and have her ask for a roll of telephone cable. She said it worked about 70% of the time, and there was always another installer on another day. We all left the lecture inspired to become skilled at beating “the system” to build a better future.

I have a HP-85 story to share in another post, we used it to beat the big computer guys in to submission.

[Michael Anderson]

Thanks for the HP-85 stories. Lots of fun.

[George Rebane]

Since we worshipped at the same altars Russ, I knew I could count on you to add an anecdote or two here.

[Douglas Keachie]

Beating the system? Want to talk to a real human when calling ATT? When the robot gets done, ""I'll just look that up" followed by the turkey gobble, say "Disconnect phone." You will have an American on an analog voice line immediately. No crappy VOIP from high born offspring in need of a job for me.

[Mikey McD]

Al Gore, coming in at $300 million 'today' net worth.. Al Gore’s net worth in 2001: $1 million.
Talk about inconvenient truths...

[TomKenworth]

My goodness, where's the complaints about Romney and Trump, two other silver spooners?

[George Rebane]

TomK 1056am - What would you complain about Romney and Trump, are they also on the stump calling for others not to have a chance to make their wad? But then the Gores all made their money the old fashioned way, in politics.