When Caterpillar announced publicly last year that it was moving its corporate headquarters operations from Illinois to Texas, the world took notice.
Actually, the world has been noticing Texas for a long time. Caterpillar became the 54th Fortune 500 company to call the Lone Star State home.
It’s a trend whose pace has picked up considerably over the past decade. Since the start of 2015, Texas has welcomed 275 corporate headquarters to the state. Cumulatively, these firms have brought nearly 6,500 new jobs with them. Of this tally, 3,255 new jobs have come to Texas as part of the 139 California firms that have pulled up stakes and hitched their wagon to Texas.
When Texas Gov. Greg Abbott held a press conference last year to herald this news, he said, “Texas is the economic engine of the nation, and I am proud to announce that we continue leading the country now with the most Fortune 500 corporate headquarters. Thanks to our unmatched business environment, with no corporate or personal income taxes, a highly skilled and diverse workforce, easy access to global markets, and reasonable regulatory climate, Texas has more businesses relocating and expanding here in our state than ever before.”
When McKesson opted out of San Francisco for the more business-friendly environment of Texas in 2019, some industry observers second-guessed the move. Four years later, no one is Monday morning quarterbacking that decision anymore.
“Irving (Texas) was absolutely the right community for McKesson to call home,” said CEO Brian Tyler in March of 2022. “Since making the move to Irving, McKesson has quickly benefited from the deep, diverse talent pool in the Dallas area, the ease of travel and the very engaged business community. McKesson considered moving its headquarters many times over the past few decades, and we could have relocated to Texas much earlier than we did.”
Tyler added that McKesson plans on growing its health-care business in Texas. “Our efforts should focus on establishing a statewide health-care network and specialized hubs to attract next-generation talent and other leading health-care companies to the state, drive innovation and spur interesting partnerships,” Tyler said.
“Texas is the economic engine of the nation, and I am proud to announce that we continue leading the country now with the most Fortune 500 corporate headquarters.”
— Texas Gov. Greg Abbott
Tyler praised the support McKesson has received from the Texas Economic Development Corporation (TxEDC). “Throughout the pandemic, we’ve experienced the power of collaboration firsthand, as we’ve teamed up with many partners on response efforts around the world,” he said. “With the help of TxEDC, we can leverage the collective strength of many companies to further enhance business and job growth, and the economic and social conditions here in Texas.”
Caterpillar moved its HQ from Illinois to Irving, Texas.
Photo courtesy of Irving Economic Development Partnership
Bye-Bye, Chicago and California
Success like this spills over into other business attraction efforts by the state. Case in point is Caterpillar, which announced last June 14 that it was bidding Chicago suburb Deerfield farewell and saying hello to Irving in the DFW Metroplex.
When asked why this longtime Illinois brand was changing addresses, company spokesperson Kate Kenny said, “We believe being in the Dallas-Fort Worth market will give us the ability to attract new talent and provide additional career opportunities for our current employees to aid in retention.” The global equipment company also cited housing prices and schools as site selection factors that were critical in the final location decision.
“Since making the move to Irving, McKesson has quickly benefited from the deep, diverse talent pool in the Dallas area, the ease of travel and the very engaged business community.”
— Brian Tyler, CEO, McKesson
Gov. Abbott called Texas “a perfect fit for this international brand” and noted that it was part of an ongoing exodus of companies fleeing places where they feel unwelcome. Just a year before Caterpillar’s move, Elon Musk yanked his Tesla headquarters out of Palo Alto, California, and moved it to Austin, the capital city of Texas.
“Without the constraint of over-taxation and runaway regulation imposed by other states, businesses are drawn to the endless economic opportunities as new ideas and innovation are free to flourish in the Lone Star State,” said Abbott. “I look forward to continuing our partnerships with businesses across the state to build an even brighter, more prosperous future for generations to come.”
The roster of companies headquartered in Texas reads like a Who’s Who of global business. Some of the biggest firms based in Texas include Halliburton, Texas Instruments, Fluor, Occidental, American Airlines, Kimberly-Clark, ConocoPhillips, D.R. Horton, HP, USAA, Oracle, Sysco, Valero, Phillips 66, Dell Technologies, AT&T and ExxonMobil.
Texas has ranked as the Best State for Business by Chief Executive Magazine for 18 consecutive years, and it has won the prestigious Site Selection Governor’s Cup a record 11 years in a row by besting all others for most corporate facility investment projects each year.
Factors That Move the Needle
Frequently cited factors behind why so many companies have chosen to move to Texas include the following:
- A large, vibrant and diverse economy. If Texas was a country, it would rank among the top 9 economies in the world.
- Access to a deep and talented labor pool. Texas recently surpassed a state population of 30 million, and its younger-than-average workforce is a magnet for growing companies.
- A highly competitive tax climate. The cost of doing business in Texas ranks below the national average. This makes Texas an ideal place for startups.
- Investment into infrastruc-ture. Site Selection magazine recently ranked Texas as the No. 1 state for Best Corporate Infrastructure. Texas is both the No. 1 state for exports and the No. 1 state in foreign direct investment.
- Generous incentives. The Texas Enterprise Fund is one of the largest deal-closing funds in the nation. The Governor’s University Research Initiative offers grants to the best and brightest researchers coming to Texas institutions of higher learning. The Texas Skills Development Fund helps companies customize their worker training programs.
