Executives Slam State’s Business Climate

The air was thick with frustration at a meeting Wednesday of Southland chief executives, who offered their views on the business climate in California that some find so hostile that they’re heading for the border.

There was Yvonne Cucci, president of South Bay Screen Print, a sportswear manufacturer, complaining that time spent fighting workers’ compensation claims is costing her sales. She’s looking to relocate by the summer of 1994.

There was Robert E. Dempster, chief executive of North American Imaging Inc., a maker of medical X-ray parts, saying he was looking to move his operation to the Northwest or to Memphis, Tenn., after 35 years in California.

There was John Smart, chairman of the Council of Growing Companies, offering a litany of incentives that states such as Ohio, Kentucky and Utah are using to court California companies. These included property tax abatements of up to 10 years, business income tax exemptions of up to seven years and state subsidization of relocation and start-up costs, he said.

And behind a microphone at a table facing out on the 41 people gathered at the J.W. Marriott Hotel in Century City sat 33-year-old Kenneth Tuchman, president of TeleTech, a Sherman Oaks-based telemarketing company. He said he’s had enough of higher taxes and skyrocketing workers’ compensation insurance premiums. This summer, he’s moving his corporate headquarters to Denver.

While only a handful of the CEOs said they were ready to say enough is enough and seek greener pastures for their businesses, a number echoed Tuchman’s sentiments that environmental regulation, taxes and other costs are hurting business.

“Workman’s comp alone is enough for anybody to say it doesn’t make sense to continue to do business in California,” Tuchman said. He said his monthly insurance premium has jumped from $2,500 to $23,000 in the last three years, mostly from fraudulent stress claims.

“I’m not interested in going to any more conferences, volunteering any more of my time or talking to any more politicians about something (the Legislature is) not capable of dealing with right now.”

To solve the problem, several of the business people said, a push to change the leadership in the state Assembly is crucial. “We can’t roll over and play dead,” said Nelson Rising, president of Maguire Thomas Partners, an L.A.-based construction firm.

Tuchman said he researched the business climates of different cities for almost two years before settling on Denver. He liked what he saw: a lower cost of living, better urban planning, less crime and better public transportation. Not to mention that Colorado’s workers’ compensation system doesn’t cover claims for stress, he said.

“L.A. is a great place if you are reliant on the local economy,” Tuchman said. But for his company, “I cannot think of a worse place to do business.”