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Hot Sauce giant eyes Texas as California business climate gets chilly

Hot Sauce giant eyes Texas as California business climate gets chilly

Per its tradition in the second week of May, America’s business leaders have voted for the states with the “best” and “worst” business climates.

As usual, Chief Executive Magazine places California at the top….of the naughty list!

That’s 10 years in a row — a decade of dominance.

Over that same period, California saw its unemployment rate go from mirroring the national rate to having consistently among the highest rates. The Golden State is now second worst in the nation when it comes to the percentage of adults who want to work full time but can’t find such jobs.

An executive officer’s comments about the results summarizes many of the points I made recently when reporting about Toyota’s move to Texas.

“California could hardly do more to discourage business if that was the goal. The regulatory, tax and political environment are crushing. The only saving grace is that there are still a lot of affluent areas that drive local economic zones, but the trend line on these is not good for the mid- to long-term.”

A good example of this dynamic involves one of the most popular exports of the state, Sriracha Hot Sauce. The company that makes the sauce, Huy Fong Foods, has been embroiled in a public battle with the Irwindale City Council over complaints that fumes from its busy plant are causing neighbors to get sick. A video report summarizes the controversy.

Team Texas is eager to offer the firm another option:

Texas state Rep. Jason Villalba is leading the delegation meeting Monday with David Tran, head of Huy Fong Foods, which makes the famous red sauce with the trademark rooster logo, in Irwindale, Calif. The delegation will make their pitch while touring the factory where Sriracha is produced.

“I’m a huge fan of the product,” Villalba told USA TODAY Network. “When I saw there was a possibility I would not be able to put Sriracha on my eggs, believe me, we got into action.”

It appears that Tran isn’t looking to move the firm, only open up a new factory (and presumably in a less economically challenging environment). However, he makes a chilling comparison between the state and the country from which he fled over thirty years ago.

Tran, the CEO of Huy Fong, says he escaped from Vietnam almost 35 years ago to be free of the communist government there and its many intrusions.

“Today, I feel almost the same. Even now, we live in [the] USA, and my feeling, the government, not a big difference,” Tran says.

Irwindale’s city attorney, Fred Galante, asserts that the company is welcome but must pay attention to the health of residents. I would like to point out to Galante that long-term unemployment has devastating effects on health, too.

According to a research study conducted by William T. Gallo, professor of health policy and management at CUNY, the six- and ten-year risk of heart attack or stroke in people between 51 and 61 years old who have lost their jobs is more than double that of the employed. Gallo also noticed some stress-related changes in the health behavior of older jobless people: there was less physical activity and an increase in daily cigarette consumption among long-term unemployed smokers, an increased risk of a smoking relapse, and some increased drinking and weight gain, which increases the risk of diabetes and heart disease.

And the CEOs’ diagnosis does not indicate a return to robust economic health in this state, either.


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If Tran were smart, he’d start working with farmers in Texas who could grow the peppers he needs. Once a sufficient supply is available, he could transfer his operations to Texas with a minimal downtime and cost to his business.

I think Tran is smart, so we’ll see what happens. ^^

    theduchessofkitty in reply to Paul. | May 13, 2014 at 9:33 am

    I’m sure he can find a very good farmer in the Rio Grande Valley who can grow those peppers year-round. And cheaper than anyone or anywhere in CA.

    Spiny Norman in reply to Paul. | May 14, 2014 at 2:17 am

    So the farmers that have been supplying him for 30+ years can go screw themselves? Same for his employees? Gawd. I can understand encouraging people to relocate to friendlier climes, but some of you Texans are just vultures.

what’s really funny, in a #Failifornia way, is that Irwindale went out of their way to get the company to move TO its current location from one in Rosemead, which is just down the freeway from there.

then, having spent tax $$ on getting the company to move, the city is now trying to shut them down, with the alleged “problems” mostly being claimed by just a handful of residents.

    NC Mountain Girl in reply to redc1c4. | May 13, 2014 at 9:27 am

    I heard the real dispute isn’t about the fumes. It’s about which relatives of which politicians didn’t get their palms crossed with silver during the move.

    tencz65 in reply to redc1c4. | May 13, 2014 at 12:49 pm

    mostly being claimed by just a handful of residents.
    In the old days these good folks would have been told quickly ‘STFU’ or leave .
    Business and Jobs were # 1 then . Thats the way it should be long as the business isn’t dumping paint in the water supply .just saying !

    snopercod in reply to redc1c4. | May 13, 2014 at 6:33 pm

    Irwindale was better when they just had a drag strip there…oh, and an In-And-Out Burger.

Upside, Texas gets businesses and therefore revenue, more popluation and therefore more voting power in congress. Downside, Texas gets a lot of California liberals moving along with the company who don’t have the brains to realize that their liberal policies are what forced them to move in the first place. If they’d leave their voting habits in Cali it would be fine, but they don’t.

“David Tran, the Owner and CEO of Huy Fong, and a refugee from Communism, says he escaped from Vietnam almost 35 years ago to be free of the Communist Government there and its many intrusions.”

If he moves from California to Texas, he will once again be a refugee from Communism and its many intrusions.

LukeHandCool | May 13, 2014 at 12:22 pm

The multimillionaire John Edwards was full of it, talking about “Two Americas.”

But more and more there are “Two Californias.”

The liberal coastal elites and everybody else inland.

One point imo . This absolutely great advertisement for Sriracha Hot Sauce.
I’ve never heard of this sauce till this up-roar .One thing in life i treasure is my home-made Buffalo Wings . Seems like i would know ? But .

Freddie Sykes | May 13, 2014 at 2:08 pm

Huy Fong Sriracha Hot Chili Sauce is a safe bet for when eating out. In our house, we use Melinda’s for our sauces and Huy Fong Chili Garlic Sauce as a condiment at meals. You spoon it out rather than squirt it. Try it.

Dennis Prager wrote about this phenomenon recently:

Why the Left Doesn’t Care about Bad Economic News

California is his poster boy.

MouseTheLuckyDog | May 14, 2014 at 1:25 am

I do not think the Huy Fong company is going to pull Texas to the left. They know why they are leaving and California and moving to Texas, and they are not going to mess that up.

I however agree that many people move to an area and try to change it to what they were trying to escape. The answer to this is simple.
The longer you live in an area the more your vote counts. The longer you are in a party, the more your vote counts in their primaries.