Second-Largest CA Firm May Be Heading To Texas

welcome to Texas 2California could be on the brink of one of its biggest corporate defections yet with the signs that McKesson Corp. – the pharmaceutical giant that is sixth on the Fortune 500 list – is preparing to move its headquarters from San Francisco to the Dallas area.

Apple is the only California company that’s bigger than McKesson, which has 75,000-plus employees and had $198 billion in annual revenue last fiscal year.

McKesson saw its profile increase greatly in 2017 after a joint investigation by the Washington Post and CBS “60 Minutes”alleged that the company had played a central role in the national opioid epidemic by failing to report “suspicious orders involving millions of highly addictive painkillers.” Yet it’s long been considered one of the 10 biggest companies “you’ve never heard of” by the InvestorPlace website and other business trackers.

Firm sold San Francisco headquarters

Now, according to a connect-the-dots report by the San Francisco Business Times, its days in the Golden State may be numbered. McKesson officially denied it was looking to move. But the newspaper noted a number of seemingly linked developments:

  • The remarks of an official with Irving Economic Development Partnership that hinted McKesson was considering an expansion of its already “major commitment” to Irving. McKesson’s $157 million regional headquarters opened in 2016 in the business-friendly suburb of Dallas that already has the headquarters of such corporate giants as ExxonMobil, Fluor Corp and Kimberly-Clark. The state of Texas provided $9.75 million in subsidies to encourage McKesson’s decision.
  • The announcement that CEO John Hammergren will retire on March 31, 2019, and be succeeded by McKesson executive Brian Tyler, who lives in Las Colinas, a posh Irving neighborhood. His possible relocation was not directly addressed.
  • McKesson’s 2017 decision to sell its San Francisco headquarters for more than $300 million in favor of an arrangement in which it leased offices at the facility.

Given how much cheaper it usually is for a company to own rather than lease a large headquarters, the sale looks in retrospect like a warning sign to city leaders that their richest company was preparing to move.

McKesson would be hardest hit by new ‘homeless tax’

Nonetheless, besides Mayor London Breed, the city’s political establishment offered relatively little pushback to a successful tax measure on San Francisco’s Nov. 6 ballot that will take its single biggest toll on McKesson – at least if the company stays in the city.

To fund increased programs for the homeless, Measure C imposes a gross receipts tax on San Francisco-based companies which have $50 million or more in annual revenue. With $198 billion in fiscal 2017, McKesson is by far the highest-grossing San Francisco-based firm. Measure C is expected to generate $300 million a year, boosting the $380 million that City Hall now spends on homelessness.

If McKesson does leave, it will join the more than 1,700 companies whose decisions to abandon the Golden State have been documented since 2008. The traditional corporate complaints about California having high taxes and heavy regulations have been expanded in recent years to include concerns about the high cost of housing making it difficult to attract and retain workers.

Among the most prominent departures: Toyota moved its U.S. headquarters from Torrance to the Dallas suburb of Plano; energy giant Occidental Petroleum moved its headquarters from Los Angeles to Houston; and the Nestle USA food conglomerate moved its headquarters from Glendale to Rosslyn, Virginia, in the Washington suburbs.

This article was originally published by CalWatchdog.com

Comments

  1. You gotta love the justice a free market economy can deliver.

    Google “Two Minute Conservative” for more.

  2. Gee, Socialist?Progressive/Communist values not working? Who would have thought?

  3. As the great decline and extinction of a once great state continues under a the “sterling progressive liberal economic environment!” Continued exodus like this only stimulates the fall and collapse of our state and it’s insane democrat governing philosophy! Keep it up libs we will be bankrupt in no time! Stand by, the civil unrest like Venezuela is just around the corner! Does anyone else see the handwriting on the financial walls?

  4. Hope that Gavin Needless takes heed

  5. The blue state of California has been committing suicide by Democrat for some time now and the bullet that will finish the job was discharged in the last elections.
    Very liberal governor elected and the same in both houses of the legislature winning a majority, necessary for the final kill!
    Prepare to pay more in taxes, utilities, regulation fees, licenses, fines, etc.. Newsom will need all the money he can get to finish Browns legacy train to no where and of course Gavin will need to build his legacy.
    Bottom line, screw the taxpayer and legitimate Citizen!
    If you can leave, the sooner the better as real estate values will plummet with all those higher taxes and fees.
    Democrats and Progressives are Satan’s lieutenants and you are their targets.

    • dennis wollen says

      I’VE BEEN SAYING THAT FOR A LONG TIME……….
      California has become even more so the COMMUNIST / MARXIST UTOPIA………
      EVERYTHING THE COMMUNIST / MARXISTS TOUCH TURNS TO SHITT……..

  6. I think Texas better start building a wall to keep Californians out. Or vet them to make sure they’re not bringing their toxic California mindsets with them.

  7. dennis wollen says

    GOOD OLE CALLIE IS FAST BECOMMING A BONIFIDE CESSPOOL SHITHOLE………ILLEGAL ALIENS, HOMELESS SCUM, DRUGGIES AND HOLLYWOOD COMMUNISTS AND MARXISTS………
    THE ‘GOLDEN STATE’ HAS TURNED TO ”TARNISH’…….

  8. T.K. Anderson says

    There is nobody to blame but “we the people”. We have allowed a rogue citizenry to elect incompetent and lawless officials that is essentially legislating the Constitution and Federal law out of existence and replacing it with a social union backed by Hollywood, Illegal aliens, Union bosses and the almighty powerful and militant GLBT and other far-left special interests. This State is simply rogue and as far as I am concerned the only way it will return to Constitutional Compliance, is by force through the Federal Government or by the people defending the Constitution as we should be! Too many people have died to bring us this country and too many Americans have died and continue to die to protect it and preserve it to allow this domestic take-over. It has to stop!

    • Pres Trump intended we return to Constitutional Compliance. However, even members of the GOP are fighting him and failing to pay close attention to what good he has done. They see him as an outsider which is exactly what we needed.

  9. Stan Sexton says

    Reform will never happen as long as California is owned by the Public Employee Unions, who will tax us to death to maintain their huge pensions. See them at http://www.transparentcalifornia.com and http://www.publicpay.ca.gov

  10. This is actually a disaster. As productive companies move out of CA to avoid their failed policies it will become a bigger SH|thole 3rd world country state clamoring for more socialism. The people who work for these companies moving to Red states will vote for the same failure because they’re morons who don’t understand why they were moved to Texas, ie stupid liberal policies. This exodus will screw red states if it continues, just like all socialism experiments this will lead to everyone being worse off.

  11. Darrik Houck says

    Unfortunately the financial bleed will take a generation to occur and even longer to remedy.

  12. vistacharlie says

    It is only a matter of time before others go as well. If Apple moved they may make more profit and also benefit from an electronics manufacturing friendly state. In some cities in CA a waitress can go to jail for giving you a plastic straw without your demanding it. Environmentalism in CA is not rationale or gentle, it is brutal, despotic and cult like.

  13. DO NOT COME TO TEXAS!!!! KEEP YOUR LIBER-RETARD ASSES IN CRAPLIFORNIA!!!

    • Well, if we get more fires that wipe out more whole towns with thousands missing, maybe us crapifornias will be all gone. Or maybe we’ll have another large earthquake and fall into the ocean like u want?

    • Boris Badenov says

      Sorry Aldo, I’ve been warning Texas about this for over a decade but do your politicians listen? H no. They keep bringing in more of these leftwing shytforbrains spouting their nonsense.

  14. Maybe since taxes are supposed to be the same for everyone somebody should sue the state when it offers a tax discount to a company of a sports team

  15. The California Democrats hate capitalism and I’m sure they do not understand that this company leaving the state might have something to do with revenue.

  16. david Hyry says

    No one has mentioned the Texas laws protecting corporations involved
    in practices that result in the deaths of US citizens and the willingness of California courts and legislature tom take action. Good riddance to
    irresponsible corporations, CA and SF is the conscience of many citizens.

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