Yesterday the CEO of LSV150 #8 ranked Hewlett Packard Enterprise announced the relocation of this region’s founding company from San Jose to Houston, Texas by 2022. That’s much bigger news than Saleforce’s acquisition of Slack, but as of the publication of this blog, the San Jose Mercury News and the San Francisco Chronicle have barely mentioned this event.
It’s WAY more important than that.
Bill Hewlett and Dave Packard created HP out of their famous garage back in 1937 before the outbreak of WWII. They mentored and developed many of the founders and leaders of the Valley’s most important young companies: Apple, Intel, National Semiconductor, Cypress, Maxim, Xilinx and hundreds more. Dave and Bill are the godfathers of the Silicon Valley, and it is a big news story that HPE will no longer call the Valley home.
HPE is not the only corporate refugee fleeing California. They join Charles Schwab, McKesson, Jacobs Engineering, Bechtel, Palantir and dozens of others. And where are these refugees going? To business-friendly states that welcome private and public company employers and job creation efforts: states like Virgina (Bechtel), Texas (Schwab, McKesson, Jacobs) and Utah (Palantir). These places have lower taxes and lower costs of living. They have no “Millionaire’s Tax” and no “CEO Tax” and no “IPO Tax” as we have here in Northern California. These states do not dictate the composition of corporate boards and they do not punish companies for being financially successful.
This announcement is a clarion call. It’s time for all Californians to reassess our priorities as a state. Detroit and Pittsburgh and Chicago were all once as prosperous as Silicon Valley. Where are we headed if we don’t attend to our businesses?