Nissan LA vs. Nashville, and what it means for Houston
The LA Times recently had an interesting piece
on the workers at Nissan's North American headquarters and their decision to either move to Nashville with HQ or quit and stay in LA.
With so many workers opting to relocate to Tennessee, the message may be that California's charms aren't what they used to be.
"I wanted to move. I was frustrated with L.A. It's too crowded, there's not enough greenery. It was overwhelming. There's so much stress there. I wanted to get out,"
Whatever workers' reasons for going, Nissan's 42% employee retention rate sends a message to businesses in California: The Golden State's charms aren't what they used to be.
"There is a bit of that attitude, especially at the state level, that California is just so great that no one would ever want to leave — that its natural features, creative services and the quality of its higher education system are so good they're enough to get the job done," said Greg Whitney, vice president of business development for the Los Angeles County Economic Development Corp.
Nissan's experience argues against that conceit, he said. Typically, a company moving its headquarters 2,000 miles, especially from a major urban center to a smaller, more rural region, is fortunate to hang on to 25% to 30% of its workforce.
These days, though, California's schools are no longer among the nation's best, its infrastructure is deteriorating from a lack of funds for upkeep, and an ever-increasing population is crowding its cities and jamming its highways.
Companies usually decide to move for one reason — to save money — whereas employees have individual, often complex reasons, Whitney said.
"But the world is becoming more homogenized," he said, "and the fact that Starbucks are everywhere helps make moving a lot easier these days."
California employees who chose to make the move are relocating to an area that has an international airport and 19 colleges, including Vanderbilt University. It is within 700 miles of 60% of the U.S. population and is closer to Nissan operations in Canada and Mexico than is the Gardena site.
"This whole Nashville area is about where Atlanta was 20 years ago, so people moving here now are getting in on the front end of a big boom," said Grant Hammond, a broker and relocation specialist with Cindy Jasper's HummerHomes Realtors in Franklin.
For single mother Johnston and her three daughters, ages 11 to 17, the move was a chance to start a new life in vastly improved surroundings.
In Torrance, her family was squeezed into a 1,064-square-foot home she rented from her mother, who has moved to Tennessee as well.
In Franklin, the family was able to trade up to a 4,000-square-foot, two-story, all-brick home with five bedrooms, four bathrooms and a quarter-acre lot. Instead of power lines and neighbors' fences, the views are of tree-covered hillsides.
And at $449,000, Johnston said, the house cost $217,000 less than what her mom received for selling the Torrance place.
What made the case for Hedrick, the product manager, was turning off Interstate 65 and onto the Cool Springs offramp "and realizing that you could really be anywhere USA."
"There's a great, big regional shopping mall, and most of the stores and restaurants are the same ones we see in California," he said. "Yet a few miles away you're in downtown and there's lots of local color too."
Hedrick said several visits during the winter also helped him and life partner Kevin Rogers make the decision to move to Franklin — as it turns out, to the same development as Johnston — from the Fairfax Avenue area of Los Angeles.
"We're giving up dim sum and first-run independent films, 24-hour grocery stores. There'll be no more morning coffee at the Newsroom with Robert Downey Jr. sitting at the next table, and we'll miss sunset walks along the strand in Manhattan Beach," Hedrick said.
"But we're going to a place with spectacular scenery, rivers that don't have concrete banks, much more affordable housing, a lot less traffic and pretty close proximity to a lot of major cities, like Atlanta and Chicago, that are just a few hours away by car or an hour by plane."
Hedrick said he and Rogers — who quit his job as a scheduler and planner for a small manufacturer — were a little apprehensive about moving because of Tennessee's location in the heart of the so-called Bible Belt.
"But we have been there a lot now, and we've found the people to be — I know it sounds trite — but, well, just really friendly."
Virginia Postrel gives her opinion here
, expanding on the point about the world becoming homogenized, where even small towns have access to all sorts of chains and amenities.
When big cities no longer have a monopoly on amenities and niche retailing, whether because of chains or the Internet, they have to worry about quality of life issues they've previously ignored. Los Angeles discourages new housing and road construction, while the rest of the Sunbelt generally encourages both. People will move. The weather is great in L.A., but Nashville and Dallas aren't Buffalo.
We're probably not quite as scenic as Nashville, but I think a lot of the points could also apply to Houston, including the friendly people. While the run-up in housing prices on the coasts has been a boon to the homeowners, I think it's cut off wide swaths of the U.S. from consideration by expanding or relocating companies. You almost never hear of a company moving to a place where it will be significantly more expensive for their employees. I believe our continuing affordability along with some great revitalization in the last few years (like downtown) have made Houston substantially more competitive in attracting new jobs, especially those energy holdouts like Citgo from Tulsa. The Port expansion seems to be pulling in its share too. And companies that may have feared leaving the coast in the past because too many employees might not come along, might reconsider with the Nissan example and the powerful carrot they can now dangle to employees: cash out half your home equity and get a bigger, nicer place in the new location with the other half. Nissan might just be the beginning of a very large, growing wave...