Toyota Motor Corporation Joins Exodus From California to Texas

Toyota Motor CorporationWhile Thomas Piketty’s best-seller Capital in the 21st Century is the rage of the liberal-progressives on the West Coast, Democrat legislators in the Golden State might be better served to go back and re-read The Goose That Laid the Golden Eggs as remedy for California’s economic woes. The news that Toyota Motor Corporation will join a growing-list of companies making the exodus from California to more business-friendly Texas should serve as a harsh wake-up call for the economically challenged state.

An undisclosed source close to the automaker leaked the news this morning that the company will transfer a large number of jobs from their sales and marketing headquarters in Torrance, California to the suburban Dallas area. According to the source, employees will be notified of the move today in a company-wide announcement. Jim Lentz, North American Chief Executive did state that the source of the leak was not authorized to speak publicly.

Toyota has maintained a presence in Southern California decades, opening its first U.S. location in Hollywood in 1957. The sales and marketing headquarters was opened in 1982, the site of its parts distribution warehouse. The Torrance site occupies nearly two million square feet of office space and employs more than 5,000 people.

The move is yet another victory for the people of the Lone Star State and its governor, Republican Rick Perry. Perry has made numerous trips to California over the past three years, designed to woo companies from California to his home state. The strategy is apparently been a successful one, as more than 60 companies have made the exodus from highly taxed and regulated California for the more business-friendly climate of Texas since 2012.

Perry, who most recently visited California in February of this year, states that in addition to those having already moved to his home state, another 50 companies are preparing plans to relocate or expand operations in Texas. With its lower taxes and real estate costs, as well as lower overall cost of living expenses, Texas has become a preferred destination for companies wary of their bottom line and desire to attract high-skilled labor.

Kelly Blue Book executive Jack Nerad advised that the latest move will be “very consequential for Southern California.” While noting that consumers will not be affected by the move, it will be tumultuous for employees and a set back to the minor momentum for the economy of a state long suffering as a consequence for policies unfriendly to employers.

The move will beginning in August and is expected to continue incrementally until 2016, will place three subsidiaries in the suburban Dallas facility. Toyota Sales USA, Toyota Engineering and Manufacturing North America and Toyota Financial Services be among those involved in the relocation.

Employees at the Torrance location, as well as other Toyota employees affected by the announced move, will be offered relocation and financial assistance packages.

Employees in Toyota’s Torrance offices and other U.S. locations will be offered relocation packages and financial assistance, they said. Toyota joins Nissan Motor Corporation as the second major Japanese automaker to flee the Golden State, who previously moved a good portion of their California operations to the Nashville, Tennessee area. In addition, a number of technology and energy firms have relocated to Texas from California, including telecommunications supplier Channell Commerical Corp., based in California for 100 years, who announced their intention in February of this year.

The news may have political ramifications for a California Democrat Party already besieged by scandal and a loss of public faith, amid the arrests and convictions of numerous high-ranking party members, including three State Senators. Recent polls indicate that voters are become increasingly skeptical of the party, which they view as aloof to the consequence their policy directives have had on the job prospects of workers in the state and a culture of corruption beset by scandals at nearly every level of government. The latest loss of jobs as a result of Toyota Motor Corporation’s move may further alienate a previously loyal electorate beginning to wonder if an exodus to Texas might be in their best interest as well.

By Paul Winters

Sources:

LATimes
BusinessWeek
Reuters

 

 

 

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