That Was Quick: Northrop Moves To D.C.

In my year-end post I noted:

The Administration and Congress are now putting forward new legislation to further regulate businesses and financial companies. These new laws are not re-regulations, but are increased regulations that will give the federal government even more control over the economy. By asserting itself further into commerce in order to wield greater power, the center of power has moved farther from the money and commercial centers like NYC, Chicago, and L.A. into Washington, D.C.

I like to think that I’m on top of things and forward-looking, but this was too quick:

Northrop Grumman Corp. plans to move its headquarters to the Washington, D.C., area from Los Angeles, a historic departure from the aerospace and defense industry’s birthplace in Southern California.

The move will put Northrop’s top executives near its biggest military and intelligence customers in the federal government, as well as Congress.

I guess we can all understand that they wish to be nearer to their customer base. But the real story was the fact that these big companies are leaving California.

After World War II, the aerospace industry blossomed in Southern California, home to year-round flying weather. But since the end of the Cold War, many of the large defense contractors have merged as defense budgets shrank during the 1990s. That has left Northrop as the last remaining large defense contractor in the area.

It is not a secret that companies find that California’s tax and regulatory structure make it difficult for companies. Add to that the high cost of housing. At one point California had it all: great weather, beautiful country, great educational system, especially its university system, and a corrupt but fairly inept state government.

We still have the weather.

You really have to worry when Goldman moves to D.C.