NEWS ANALYSIS : Pessimist Wilson Now a Pitchman : Leaders: Governor touts California to businesses in nation's heartland. The message is a far cry from the one he was spreading until recently.

By DANIEL M. WEINTRAUB

Jan. 11, 1994 12 AM PT

TIMES STAFF WRITER

ST. PAUL, Minn. — Gov. Pete Wilson, legislative leaders in tow, arrived here Monday for a whirlwind, three-day tour of the nation’s heartland, during which he intends to tell the captains of American industry to forget all those awful things he was saying about the state’s business climate until a few months ago.

On a trip that may be designed as much for the consumption of voters back home as the corporate executives that Wilson and his entourage will call upon in Minneapolis, Chicago and Dallas, the governor says he hopes to convey a simple message:

“California is back in business with an enormously improved jobs climate, with terrific opportunities for companies to grow and expand, to create new jobs in our state,” Wilson told reporters in Sacramento as he prepared for the journey.

That’s a far cry from the message Wilson was spreading until recently. California, he told all who would listen, was bad for business. With burdensome taxes and regulations and a workers’ compensation system that drained profits, the state, Wilson said, was a virtual job-killing machine.

Then the Republican governor and his new-found Democratic friends in the Legislature, bitter political enemies in 1992, got together to enact a package of laws they said would blow away the dark clouds that had been ruining the state’s business climate.

They overhauled workers’ compensation with reforms expected to shave about 10% from its cost. They gave tax breaks for investment in small businesses and factory equipment. They reduced levies on worldwide corporations. And they took the first steps toward simplifying the state’s regulatory labyrinth.

Some skeptics say the changes pale in comparison to the huge tax increase Wilson and lawmakers enacted in 1991. Others say Wilson overstated the problem and now is exaggerating the solution for political reasons. But the governor insists the state’s economy is about to turn around, thanks to the work he and lawmakers did in 1993.

The problem, say Wilson and the legislators who are with him on the trip, is that many business leaders may not have gotten the message.

“Perception always trails reality,” said Assembly Republican leader Jim Brulte of Rancho Cucamonga. “The reality is we’ve made some significant changes. We want to make sure that reality becomes the perception.”

Also with Wilson are Senate Republican leader Ken Maddy of Fresno and Assembly majority floor leader Tom Hannigan of Fairfield. Assembly Speaker Willie Brown was scheduled to go but canceled Monday because he has an ear infection and was advised by doctors not to fly. Senate President Pro Tem David A. Roberti (D-Van Nuys), preoccupied with an attempt to recall him from office, did not make the trip, and sent Sen. Dan McCorquodale (D-Modesto) in his place.

Even without Roberti and Brown, the bipartisan trip is an unprecedented show of unity for a California governor and the leaders of the Legislature. It wasn’t long ago, in 1992, that Wilson and top Democratic leaders did not speak to each other for weeks while the state went without a budget and was forced to pay its bills with IOUs.

Maddy said it is about time that California leaders began hunting down jobs in other states.

“This is a very highly competitive world,” Maddy said.

He noted that governors from other state have toured California “gleefully trying to pick off our businesses.” Among those who visited in recent months were North Carolina Gov. James B. Hunt, who talked to Taco Bell officials about moving their corporate headquarters to that state, and Massachusetts Gov. William Weld, who courted film industry officials.

“I think it’s time we turned the tables,” Maddy said.

The group will meet today with the chief executive officers of 3M Corp., Target Stores, National Computer Systems and General Mills, among others.

On Wednesday, in Chicago, executives from Sears, Household International Inc., Kraft General Foods and Quaker Oats Co. will be among those playing host to the Californians.

In Dallas on Thursday, the contingent hopes to meet with officials from EDS, Frito Lay and AMR Corp.

Wilson said the task ahead is “more than cold canvas”--the sales term for calling on customers with no idea whether they will be interested in your product.

“We have some hot leads,” he said. “We have some people we think are likely, if not now, at some point in the foreseeable future, to have need to expand, and we want them to know the full story.”

Still, Wilson aides caution that the governor is not likely to announce the creation of any new jobs during the trip, as he did on the 17-day, eight-city tour he took of Asia around Thanksgiving.

Many of the firms the governor will call on already do business in California. Wilson and the lawmakers said they will ask the executives what else the state can do to make conditions more hospitable for them.

“Our perception of regulatory reform and how magnificent we were may not track with what they claim is ailing them,” Brown said.

Julie Wright, Wilson’s secretary for trade and commerce, said the goal is not to “pirate” companies from the states the group is visiting.

“Most of these companies have a significant presence in California and our goal is to see that presence expanded,” she said.

Not that Wilson and the others wouldn’t mind persuading some corporate executives to move their headquarters west.

So amid all the talk of the business climate, the other kind of climate--the one not subject to the whims of politicians--might get a little attention as well. The California delegation departed Monday--on a private corporate jet provided by Federal Express--after another day of sunshine in Sacramento, while in Minnesota, the forecast was for single-digit temperatures and snow.