Business leaders are generally upbeat about Schwarzenegger's attitude butcircumspect about his ability to deliver, writes Marla Dickerson
He talked the talk on whipping California's business climate into shape. But can governor-elect Mr Arnold Schwarzenegger walk the walk?
Business leaders were generally upbeat this week about the prospect of a tough-talking, tax-chopping, red tape-terminating presence in the governor's mansion who has chosen economic development as his number one priority.
"I look at the state as a very, very large business and I know that a new person at the helm can change the tempo and outlook," said Mr Dave Conant, president of Conant Auto Retail Group in Cerritos, California, which owns eight car dealerships. "An upbeat person who is a consensus builder can make a huge difference. Arnold is upbeat and he can have a tremendous impact on California, psychologically."
Still, most were circumspect about the former bodybuilder's ability to deliver in the face of the Herculean obstacles confronting him.
They noted that a slew of factors weighing heavily on the state's businesses, from the sluggish national economy to globalisation to high land costs, are out of the governor's control. Key planks of Mr Schwarzenegger's agenda for his first 100 days in office include wringing more revenue from Native American gaming and wresting additional concessions from state employee unions, target groups that are not legally bound to negotiate with him at this time. Meanwhile, the Republican is facing an angry Democratic-controlled Legislature, whose co-operation he will need to push through change.
"On the one hand, we're really apprehensive," said Mr Arthur Pereira, owner of Los Angeles-based clothing maker Kymsta Corp. "On the other hand, if this guy can do what he says he can do, then the state will benefit from this and small business will benefit ... I can't help but think that somewhere along the line, we're going to benefit from this. How can so many people be wrong?"
Many acknowledged the psychological boost that comes with putting a business champion back in the governor's office, particularly one whose international celebrity will give him a powerful bully pulpit to push his agenda and send a message that California is serious about shoring up its industrial base.
In Hollywood, for example, union officials believe Mr Schwarzenegger may be influential using his relationships and persuasive powers to help keep individual productions in the state. Although Mr Schwarzenegger himself shot movies in Canada and Mexico, Hollywood unions credit him with structuring a deal that kept the production of Terminator 3: Rise of the Machines in Los Angeles after it was scheduled to be shot in Canada.
Business leaders are also confident that veto power in the hands of a Republican will snap a string of legislation perceived as hostile to business that has flowed out of Sacramento over the past few years, from costly wage and overtime rules to a new mandate requiring many California businesses to provide health care for their workers.
"I think there is potential to change an anti-business legislative environment to a neutral environment," said Mr Dwight Decker, chief executive of Conexant Systems Inc, a Newport Beach-based chip maker.
Even so, some said that the former actor's star power won't be enough to stop companies from looking elsewhere to grow their firms if the political novice can't find a way to work with the Legislature to make meaningful improvements to the state's business environment.
Mr Daniel L. Villanueva, the head of Fontis Ventures, a $100 million-plus fund that invests in entrepreneurial Latino businesses throughout the south-west, said he knows of four California companies now in negotiations to relocate or expand in other states. "One thing that didn't go down well with business people on \ night is when Democratic legislators said on the news shows that they would get Schwarzenegger up to Sacramento and show him a thing or two about governance," Mr Villanueva said.
Democratic legislators aren't the only group that may not be keen on working with the new governor. The state's Native American tribes have been offended by Mr Schwarzenegger's strident attacks on tribal gaming and his assertions that the state deserves a bigger cut. However, states must negotiate agreements or "compacts" with the tribes, that must be approved by each state's Legislature plus the Interior Department.
State employee unions aren't inclined to cosy up to Mr Schwarzenegger, either. His agenda includes renegotiating state employee union contracts "to get a better deal for taxpayers". But like the tribes, many of the state's unionised employees aren't bound to negotiate with Mr Schwarzenegger.
Still, many executives said they were confident that the change in Sacramento will be good for California's economy and its business climate.
"He's taking a businessman's approach to running the state. He's focusing on the side of the equation that nobody likes to focus on, which is cost," said Mr Robert A. Kotick, chief executive of Activision Inc, a video game publisher in Santa Monica. - (LA Times/Washington Post)
