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Chief executive of Intel says California is `anti-business'

Intel Corp, the world's largest computer-chipmaker, has few reasons to make future investments in California without regulatory changes, chief executive Craig Barrett said.

"There is not much incentive at this time," he said at a conference in Orlando, Florida, sponsored by computer market researcher Gartner Inc.

California needs to change state laws, such as its "disaster" of a workers' compensation system, Barrett said.

Barrett hasn't expanded Intel's remaining California chip factory since 1999 and the "overwhelming majority" of the US$22.4 billion budgeted for plants and equipment over the past four years has been spent outside the state, Intel spokesman Chuck Mulloy said.

Intel employs about 12,000 employees in California, second to Oregon, where about 15,000 people work.

"California has a 20-year history of anti-business legislation," said Barrett, whose company is based in Santa Clara, California with a factory there and research labs in Folsom.

The state also fails to appreciate the contributions of the high-technology industry, he said.

Among the issues concerning Barrett and other California business leaders is workers' compensation, which was a key issue in this month's recall of Governor Gray Davis.

The Democrat, after facing criticism that California premiums were the highest in the US, signed a bill last month to lower them by 18 percent.

California's faltering economy became a central issue in the 10 1/2-week political race ahead of the recall election.

Arnold Schwarzenegger, who won the office on Oct. 7, said higher workers compensation costs, regulatory burdens and taxes were causing businesses to flee a state that on its own would rank among the world's biggest economies.

"California is the fifth-largest economy in the world and we got real issues," said Carleton Fiorina, the chairman and chief executive of Hewlett-Packard Co who is helping Schwarzenegger find staff and assess the state's business climate.

She spoke at the Gartner Inc forum.

"California has made a number of choices in the past several years that have negatively affected its competitiveness," Fiorina said.

Two weeks ahead of the election, the 64-year-old Barrett was the lead signatory on a paid advertisement in newspapers in which executives, including Fiorina, complained that the state "has become one of the worst places to do business not only in the US, but also in the world."

Intel paid for the newspaper advertisement.

Schwarzenegger said legislation passed this year doesn't do enough to lower the cost of workers' compensation.

The governor-elect said he will take steps to close loopholes and eliminate incentives that encourage fraudulent claims.
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