Report: Toyota Relocating Part of U.S. Headquarters From California to Texas
Businessweek is reporting that Toyota Motor Corp. is moving “substantial parts of its U.S. headquarters to suburban Dallas”. Employees will reportedly be informed of the move on Monday. Toyota in California has more than 5,300 employees with most working in divisions that could be moved to Texas.
The surprise move is a blow to the Golden State, the biggest U.S. auto market and proponent of the strictest clean-air rules. Toyota’s Prius hybrid has been California’s top-selling model for the past two years and helped secure a leading 22 percent market share. It also represents a victory for Texas Governor Rick Perry, who’s made repeated visits to California to lure businesses to his state with promises of lower taxes and easier regulations.
“It would be very consequential for Southern California,” said Jack Nerad, executive market analyst for vehicle-price data service Kelley Blue Book in Irvine, California. “There might be some brain drain and tumult for employees, though it should be largely seamless to the consumer. This kind of thing can create some disruption of momentum.”
Toyota has more than 5,300 California employees, most at its Torrance campus in sales, finance, marketing, engineering and product planning. Details on which functions will move and when may be announced as soon as today, after the employee meeting. When Nissan Motor Co. (7201) moved its North American headquarters to lower-cost Tennessee in 2006, only 42 percent of employees initially chose to relocate.
The new regional sales headquarters may be in or near Plano, Texas, said three of the people who asked not to be named as the plan isn’t yet public. The majority of Toyota’s Torrance operations may move to Texas over a two-year period, the people said.
A story earlier on Sunday from Pando.com reported that Toyota would move it’s entire U.S. Headquarters from California to Texas.
The move will add yet another feather to Governor Rick Perry’s hat as he has been traveling to high-tax states promoting the Texas model. While he has traveled to other states and called out policies that hurt business he has also met with business owners in an attempt to lure them to the Lone Star State.
Rick Perry was in California in March for a three day trip where he talked taxes and regulations. The trip and ad-campaign was funded by Americans for Economic Freedom. During Perry’s trip, radio and TV ads aired that bragged about 50 companies that had left California for Texas.
Toyota already has a presence in Texas with manufacturing and assembly facility for the Tundra and Tacoma in San Antonio.