Monday, November 14, 2005

The Grapes of Wrath Reversed

“We moved here from CA and found that we had a workforce with a better work ethic and better morals. They were more appreciative of their job here than what we found in CA where people don’t have to work as hard to make decent money.” Scott Downey, of Downey Decal & Graphics, Inc. ( was telling me of his decision to move to Enid, OK from Menifee, CA, located between LA and San Diego. “I’ve had a number of other business owners talk with me about my move. They’ve got lots of questions and I believe that I’ll end up bringing a number of other CA companies out here.”

Scott manufacters adhesive decals that are used on everything from melons to semi-trailers. He specializes in servicing OEM markets especially in the fishing (300 rod manufacturers use his decals); hunting (Orvis, Cabellas and others); fresh produce (he did 5 million decals for melons last week); aircraft; vehicle; and welding and medical gas safety.

I asked him why he would move a successful business from fast growing CA. “There were a couple of incidents that culminated in me being forced to make a decision on what was best for the business. I had been doing the decal business part time since 1991 and went full time in 1999. We’ve quadrupled since then and outgrew a facility we were in.”

“The county changed its zoning regulations, which didn’t allow me to expand and property values have skyrocketed making a move very expensive. As an example, the property that I bought in 1999 for $145,000 is now worth $800,000. I wanted to expand where I was, but the county wouldn’t let me do anything to my building. The straw that broke my back was when I got hit with what is called the Gray Davis Tax, which is a tax on business assets. The county forgot to assess the tax and then did it so retroactively for the previous four years.”

“I started to look, talking with customers around the country. We liked what we saw in Enid. I’m still living in CA because my daughter is a junior in high school, but will move here in a few years.”

In addition to a better workforce, Scott feels that he is saving 12 to 15%/year in operating costs. He also has found that he has a better shipping window for his products. He has cut delivery time to the east coast in half and has several hours more/day to get product out of the plant. He also added, “And, we’ve got each of our top five customers within 350 miles of Enid.”

Scott is on the leading edge of a shift that I’ve seen in several other towns that I’ve visited like Prescott, AZ and Grants Pass, OR. Smaller, more specialized companies are fleeing expensive CA for greener pastures where the costs are lower and there is this perception of a better work ethic.

As I reported last week, the Census Bureau found that there are more people leaving CA than are moving to it. I am reminded of a demographer who asked where the Appalachia of the USA (i.e. poor, uneducated) in the future is going to lie. He astounded everyone in the audience by predicting that CA was headed for a cliff because it has the lowest high school graduation rate in the USA.

Keep your eyes and ears open. Watch for the signs that CA’s best days might lie behind. And, if so, there will be many more Scott Downeys moving back in a reverse migration that started in the 1930s, immortalized in the movie “The Grapes of Wrath.”

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