Will McDonald's be leaving Virginia? Not this year, but...

Eagles, Mamas and the Papas, and the Beach Boys.

Feb 03, 2023

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I wish the headline of today’s column was just clickbait. It originates from a headline that was pushed across my phone that read “Will McDonald’s be leaving California?”

That immediately made me think that McDonald’s corporate offices might be considering moving their headquarters from California to another state. Given the exodus on companies that have left The Golden State - click here for that list from just 2020-2023 - it would be just another news story about another company leaving California.

Quickly remembering that McDonald’s was based in Chicago, not California, I clicked on the article. The president of McDonald’s USA, John Erlinger, had written an open letter dated January 25th - click here for that letter - in which he lamented the legislative and regulatory reality of California:

Last fall, the legislature passed a bill – AB257, or the FAST Act – almost entirely at the behest of organized labor’s firm grip on many of the state’s lawmakers. It makes it all but impossible to run small business restaurants, but the impacts are far beyond that. Under the FAST Act, an unelected council of political insiders, not local business owners and their teams, would make big decisions about crucial elements of running a business, fracturing the economy in the process. (emphasis added)

No, this is not a move of a company HQ, but rather the very real and public conversation about restaurants being unable to operate in California AT ALL.

A literal existential threat. Cue the Golden headlines - Golden Arches leave Golden State etc…and of course references to actually being able to check out of the Hotel California.

Mr. Erlinger has to answer to McDonald’s shareholders and if he doesn’t draw attention to these issues, he could be held responsible for not doing anything about it. That includes inviting very large lawsuits which could imperil the company’s performance and future investments.

So? That’s just wacky Cali. Great weather. Crappy business climate. Business leaves or closes. Right?

Nope.

Virginia, you got a mention in Erlinger’s letter!

The state is teaching us a powerful lesson about what our future could look like if this one-sided style of democracy is mimicked elsewhere, or goes unchecked in the Golden State. And this threat is real – just last week, a Virginia legislator imported from California introduced a near-identical piece of legislation that state leaders now have an opportunity to stop in its tracks. And no doubt, they’ll keep looking for backdoors in California. (emphasis added)

(In fact, Virginia was the only other state noted in the letter)

As I had not heard about this legislation, I clicked on his the link Erlinger provided to see what bill he was talking about. House Bill 2478 was submitted for consideration by Delegate Irene Shin.

Thankfully, it was defeated 12-5 in the Rules Committee. Yes, HB2478 got five votes in support.

Whiskey Tango Foxtrot.

Yes, legislators (from both sides of the aisle) will put in legislation at the behest of their supporters. Redressing grievances and all…

But legislators and their elected leaders need to understand the ramifications of the simple action of dropping a bill in the hopper.

Virginia has had its doozies over the years OR don’t you remember the Droopy Drawers Bill that made international headlines? Trans vaginal ultrasound ring a bell?

Folks, policy matters. They set the rules of the game and that forces decisions by business leaders.

Timing matters, too. Since Virginia’s legislature is first out of the gate every year and we are in close proximity to the DC press/cable news corps, the spotlight can be intense.

This ain’t Wyoming.

Virginia has been the crucible for democracy.

We have elections of consequence every year making us a daily bellwether. Virginia, as a direct result, is a cheap political lab rat for a whole host of grifting constituencies.

I’ll take a half glass full approach and fully embrace my word of the year - Positive.

Congratulations, Virginia! Our role as democracy’s crucible continues!

Now, go raise money!

Last year’s word was Sabbath. One day a week I stop and rest. It worked and continues to work this year.

Here are some graphics for you on domestic net migrations.