Chevron to move headquarters from Bay Area to Texas
SAN RAMON, Calif. (KGO) -- Chevron, one of the Bay Area's largest companies, announced Friday morning it is moving its headquarters from San Ramon to Houston, Texas.
The company says there won't be much immediate relocation and expects all corporate functions to migrate to Houston over the next five years.
VIDEO: What Elon Musk's Texas relocation plan for SpaceX, X HQs could mean for CA
Positions for its California operations will remain in San Ramon.
Chevron currently has about 2,000 employees in San Ramon and 7,000 employees in the Houston area.
The company also announced several leadership changes Friday morning.
Chevron missed second-quarter earnings expectations Friday morning. Net income is down 26 percent.
Cal State East Bay Professor of Change Management, Marketing and Communications, Amira Barger, says competition from other states is luring businesses away. The fallout from that, she believes, will include the ability to attract and retain employers and their employees. But Barger doesn't think California's innovation around green policies is the reason for the fossil fuel company's departure. She says there is pressure from the board of directors to cut costs to boost profits.
"One of the swiftest ways to do that is to take into account the tax base and the place in which you operate. Those regulatory and tax challenges certainly remain a competitive component," says Professor Barger.
RELATED: Oracle moving headquarters to Austin, Texas, joining other tech companies in California exodus
Contra Costa County Supervisor John Gioia told ABC7 News that this move was expected.
"I don't think this was really surprising," Supervisor Gioia said. "Chevron had really telegraphed this over the last few years by shifting many of its corporate jobs from California to Texas."
He says Chevron's move falls in line with California's push for more clean energy.
"Texas is on a very different pathway than California," Supervisor Gioia said. "Texas is the heart of the oil industry. California has made it very clear in our policies that we want to move toward a zero-emission fossil-free future."
Supervisor Candace Andersen says it is tough any time a city, county or state loses jobs and the tax base. Despite world-class innovation, she admits that the Golden State's red tape and regulations can make it difficult for business. But she says Chevron gained from being in California as well.
"They have fully embraced some of our most stringent clean air requirements in the Bay Area. Our safety requirements in Contra Costa County," says Andersen.
However, not everyone thinks this move is a good thing.
The Bay Area Council says losing a company like Chevron hurts the local economy.
MORE: California Dreaming: Moving to Texas
"It's disarming to see such a major company and a mainstay of the Bay Area and California business community and economy leave our state," Bay Area Council CEO Jim Wunderman said.
Wunderman says the state should consider policies that don't drive companies to other states.
"State leadership needs to take notice of this and acknowledge it and ask the hard question why do companies feel they are better off in Texas or some other state and not in California," Wunderman said. "If we are such a powerful economy why don't companies want to be here."
Carl Fritzshe spent his entire professional career at Chevron, working in the environment and safety field. He was based in San Ramon for 10 years.
"I have seen many changes over the years I was at Chevron. And one of them that was always kind of hanging over heads was the potential move to Houston," says Fritzshe.
He says Chevron's move is practical. Already, 7,000 jobs were moved to Houston. He sees moving the corporate headquarters there as just the final step. But he adds that being based in the Bay Area greatly impacted the company's culture.
MORE: Google to leave prominent office complex in San Francisco next year, report says
"The company took on the progressive values, in many ways, that the Bay Area had. For example, Chevron offered domestic partner benefits for same-sex couples long before the state of California did," says Fritzshe.
Governor Gavin Newsom's Office said in a statement:
"This announcement is the logical culmination of a long process that has repeatedly been foreshadowed by Chevron. We're proud of California's place as the leading creator of clean energy jobs."
A Chevron refinery spokesman says the corporate move from San Ramon to Texas will have "no impact" on their Richmond refinery.
Supervisor Gioia says as long as it's there, Chevron will still be paying plenty of property tax.
"They are the largest property taxpayer in contra costa but that is based on the value of their refinery," Supervisor Gioia said. "This move to Texas does not change the valuation of the refinery."
Chevron will remain in San Ramon for the next five years. The corporate park will be turned into a housing development with more than 2,600 homes.
