Reporting

October 01, 2012 by Justin Ewers

California’s Business Climate: The Comcast Kerfuffle


Tweets on the Comcast Sacramento call center closure.

Is California a good place to do business? That question reared its head again this week when Comcast, the nation’s largest cable company, announced that it was eliminating 1,000 jobs in the Bay Area and Sacramento, initially chalking the move up to “the high cost of doing business in California.”

The decision, which will shift management of California’s call-centers to Portland, Seattle, and Denver, seemed to echo complaints from other companies that have moved to states with more “business-friendly” climates. 

"Comcast arrived at this decision after thoughtfully and methodically studying the market and our potential options," Andrew Johnson, regional vice president of Comcast California, said in a statement early this week. 

Citing studies form the California Chamber of Commerce, the California Taxpayers Association, and the California Assembly Republican Caucus, Johnson said: "We determined that the high cost of doing business in California makes it difficult to run cost-effective call centers in Northern California."

Just when the news seemed to confirm the worst predictions about the dire state of California’s business climate, Comcast suddenly reversed itself. Later the same day, the company issued an unsigned statement saying its initial statement wasn’t accurate—and that Comcast, which still has more than 20,000 employees in California, is committed to doing business in California.

Its call centers may be moving, but “the end result will be better customer service for our California customers,” the company said.

Sacramento weighs in

The about-face followed a personal invitation for a meeting with Comcast executives from Darrell Steinberg, the State Senate pro Tem, who asked the company’s leaders to “outline their issues and discuss what my office and the Legislature might do to resolve their concerns.” 

Comcast may not have reversed its decision, but its softened explanation was enough to placate some state leaders: "It is unfortunate that Comcast's announcement to eliminate jobs in California inaccurately placed blame on the state, but I am pleased to see the executives at Comcast taking responsibility and correcting the statement," said Mike Rossi, the governor's senior adviser for jobs and business development.

So what does the Comcast dustup really say about California’s business climate? That issue remains as clear as mud. When a Campbell’s Soup plant in Sacramento shut down a few days after the Comcast announcement, Steinberg was still sticking to his guns.

"It’s not California’s or Sacramento’s business climate. In fact, evidence is to the contrary,” Steinberg told reporters, pointing out that more than 16,000 jobs were created in the Sacramento region over the past year.

Others weren’t so sure. “There’s no doubt that there are policies at the state level as well as our levels of taxation that aren’t encouraging to a lot of businesses,” Roger Niello, president of the Sacramento Chamber of Commerce, told reporters.

Making California more hospitable to business

While the Comcast story may end up being a cautionary tale not just about California business and politics—but public relations, as well—the work of actually taking action to improve California’s business climate is going on now. 

The California Economic Summit continues to bring together stakeholders in and out of business who are committed to finding ways to tackle this complex challenge.

Following a statewide gathering of more than 500 leaders from across California at the the first-ever California Economic Summit in May, the group’s Action Teams are refining policy ideas ranging from how to support infrastructure financing reforms and efforts to modernize California’s water system to new ways the state can streamline regulations. And month by month, they are making progress.

“It’s a big task,” says Jim Mayer, executive director of California Forward, a reform group that is one of the Summit’s strongest supporters, “But there are hundreds of Californians committed to finding solutions to these problems.” 

Comcast’s call-centers may be leaving California, but the issues that drove the company’s decision -- and Sacramento’s response -- aren’t going anywhere. Now is the time to do something about it. 

Categories: Jobs, Regulations

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