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Published On: Tue, Apr 29th, 2014

Texas wins, California loses in battle for Toyota, jobs

Toyota delivered a crushing blow to California on Monday, announcing the company would move its U.S. headquarters and about 3,000 jobs from the Los Angeles suburbs to the Dallas metro area.

photo  by Mariordo

photo by Mariordo

According to the Forbes article on Tuesday, “Texas promised Toyota $40 million, or about $10,000 for each of the 4,000 jobs expected as the company moves its North American headquarters to North Texas from Southern California over the next three years.”

“When you look at the whole package, it’s difficult to be a business here,” lamented Torrance Mayor Frank Scotto, whose community on the edge of the Pacific will suffer as the jobs migrate to Texas.

“If all these great, high-end jobs are leaving California, then we are going to turn into a place that’s a retirement community” with low-paying service-sector jobs, Scotto said. “We can’t have that,” he added, warning that unless the state has a change of attitude, “it’s going to be way too late.”

Some 2,300 jobs will remain in the Golden State as Toyota’s main campus moves to Plano, Texas, but critics are pointing to the decision as a “symbolic slap for California.”

“I wanted to get sales, manufacturing and corporate operations in one location to be more efficient, and to put more resources against engineering and design,” North American CEO Jim Lentz told Automotive News. “If I can have supply and demand sitting next to each other, with information in real time, and collaborating with each other, that makes us a stronger player.”

For Toyota, the $40 million in state incentives presumably isn’t the whole of what Texas offered; Plano’s city council is scheduled to vote soon on its package of additional incentives, presumably including property-tax abatement related to the site of Toyota’s planned campus there.

So from the start, cash wasn’t the main game for Toyota in deciding to leave southern California, or deciding to land in Texas.

The appeal of setting up a new shop in the logistical heart of North America and much closer to all of Toyota’s manufacturing operations was obviously a huge lure.

So was the chance for lower corporate operating costs across the board. “The business climate in Texas is very good overall, but particularly for large corporations,” said Larry Gigerich, managing director of Ginovus, an Indianapolis-based consultant. “That’s a tremendous positive. There will be enormous savings for Toyota right off the bat.”

 

About the Author

- Catherine "Kaye" Wonderhouse, a proud descendant of the Wunderhaus family is the Colorado Correspondent who will add more coverage, interviews and reports from this midwest area.

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