COUNTRYWIDE OPTS TO GROW OUT OF STATE.

Byline: Gregory J. Wilcox Staff Writer

CALABASAS - Countrywide Financial Corp.'s top executive blasted California's unfriendly business climate Wednesday, saying future expansions of the company would likely occur out of state.

``I am sad to say that California, where Countrywide has been headquartered for more than 30 years, does not provide a business climate that is conducive to cost control or business productivity,'' said Angelo R. Mozilo, Countrywide's chairman, chief executive officer and president, during the firm's annual meeting at its Calabasas headquarters.

He noted that the company is one of the top 15 private-sector employers in the state. Its payroll has grown from 12,000 workers in 2000 to more than 30,000 today, and the number could reach 100,000 by decade's end.

``Our growth is exceptional - requiring significant additions to head count, and consequently, office space.'' Mozilo said. ``As such, we are mindful of the business climate here in California.

``We will be forced, and are forced, to expand outside California,'' he said.

The shift was evident earlier this year, when Countrywide said it was opening a facility in Chandler, Ariz., that would employee 400 people. The company went out of state because of California's unfavorable business climate, from high workers' compensation rates to high taxes.

Steven Maviglio, press secretary for Gov. Gray Davis, disputed Mozilo's perception that the state is unfriendly to business and ignoring the issue.

``On workers' comp, the governor completely agrees. He has put together a package of nearly 20 bills in the Legislature to reform workers' comp and minimize cost increases,'' Maviglio said.

The press secretary noted that California has one of the world's biggest economies, with a gross state product of nearly $1.4 trillion, the nation's largest. He said seven surveys released in the past year show that California is a leader in business and careers and a desirable place to live.

But Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., does not put much stock in the state's claims or its track record for helping businesses.

``We're talking to businesses, and if they are going to expand in Los Angeles they are going to invest in equipment but they are not going to expand their work force,'' he said. ``The workers' comp issue is like a tax on job creation. This is a (job) killer.''

The only sour note in Mozilo's presentation at Countrywide sounded deep in his speech, when he reached the 42nd of 58 slides. Titled ``California's Business Climate,'' it reported that:

--Since 2003, Countrywide workers' compensation premiums have increased 60 percent and this year's legislative changes will increase costs further.

--California ranks 44th in legal climate for business.

--Overtime laws prohibit employers from offering flexible work schedules.

Mozilo said these are issues that state lawmakers must address to grow California's economy and keep it competitive with other states.

``We are leading an effort to bring reforms to several state regulations which have placed California in an uncompetitive situation for keeping and attracting businesses and jobs, and which affect Countrywide's decisions on future expansion in our home state, he said.

Mozilo pledged that the company he helped found in 1968 would maintain a strong presence in the state.

He also predicted that Countrywide would earn between $11 a share and $12 a share this year, in part because historically low interest rates have fueled boom in home-buying and refinance.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com

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