California's Business Climate:
Three Sacramento-Area Companies Announce Major Reductions in California Jobs

In the past two weeks, three major employers in the Sacramento area have announced changes that will result in thousands of Californians losing their jobs, and government actions that make business costs higher in the Golden State appear to be largely responsible.

The Campbell Soup Company announced that it will can its Sacramento operations by shutting down its 65-year-old plant in July, costing the Sacramento region 700 full-time jobs. The plant almost closed twice before – in 1992 and 1996 – but stayed open after local officials offered Campbell's economic incentives, including a $500,000 property tax rebate.

Anthony Sanzio, a spokesperson for Campbell's, told The Sacramento Bee: "Sacramento is one of our oldest plants, one of our least efficient. It has the highest product cost per case of any plant in the U.S. So from a business decision, the case (to close) is clear and compelling."

The plant's employees are represented by the Teamsters union, and earn an estimated $20 per hour. Campbell's plans on moving production to its existing plants in Paris, Texas; Maxton, North Carolina; and Napoleon, Ohio.

Meanwhile, Comcast announced September 25 that it is closing all three of its California call-in centers (in Livermore, Morgan Hill and Natomas) and will transfer approximately 1,000 California jobs to call centers in Colorado, Oregon and Washington. The company is offering relocation assistance to employees, and severance packages to those who cannot move with the jobs.

Also, Vision Service Plan (VSP), a Rancho Cordova company that employs approximately 2,100 people in the greater Sacramento area, is considering leaving California due to a decision made by the state agency handling the roll-out of federal health care legislation.

In August, the California Health Benefit Exchange decided to exclude VSP from being able to compete for a large share of consumers, saying it would not allow stand-alone vision plans – like those sold by VSP – to be offered to individual consumers through the exchange. (Such plans still could be sold through the exchange to small businesses, but the individual market is expected to be much larger.)

The Sacramento Bee noted that this policy would "greatly limit vision services available through the exchange, since most are offered through stand-alone plans."

After VSP announced that it might move its headquarters to another state, Senate President Pro Tem Darrell Steinberg and others urged the state agency to reconsider its decision, and the agency's executive director indicated that he expects the exchange to "revisit this matter" in October. (Source: The Sacramento Bee, September 19, September 25 and September 27.)

September 28, 2012
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