Video: Toyota bailing on California

posted at 12:41 pm on April 28, 2014 by Ed Morrissey

The world’s leading automotive maker will follow the lead of its competitors and other large businesses, and leave California for better business climates elsewhere. Toyota had its US headquarters in Torrance for more than three decades, but now nearly 5,000 jobs will shift to Texas:

Toyota Motor Corp. plans to move large numbers of jobs from its sales and marketing headquarters in Torrance to suburban Dallas, according to a person familiar with the automaker’s plans. …

The automaker won’t be the first big company Texas has poached from California.

Occidental Petroleum Corp. said in February that it was relocating from Los Angeles to Houston, making it one of around 60 companies that have moved to Texas since July 2012, according to Texas Gov. Rick Perry.

Perry last month visited the California to recruit companies. The group Americans for Economic Freedom also recently launched a $300,000 advertising campaign in which Perry contends 50 California companies have plans to expand or relocate in Texas because it offers a better business climate.

Like these other companies, Toyota could also save money in an environment of lower business taxes, real estate prices and cost of living.

Torrance mayor Frank Scotto said he was blindsided by the decision, although he knew Toyota planned a major announcement for today. KCAL-9 reported on the move last night:

Scotto also told the LA Times that the move made sense. Higher workers-comp and liability requirements in California, not to mention higher taxes, make California an unattractive destination for business creation and expansion. It’s gotten so bad that the money saved in those areas can pay for a massive move of a national headquarters — and more and more companies are beginning to see the cost benefits of such a move out of the Golden State.

The move makes sense in other ways, the LA Times points out. It puts the national headquarters much closer to the actual production facilities, but it also makes it easier to travel out to the major locations within the US, thanks to the hub-and-spoke air system the US uses and the easy access to Dallas-Fort Worth Airport. Neither of those would be enough to justify the massive expense of this relocation on its own, though. Toyota wants to shake itself loose from California’s high-tax, low-service environment and put its trust in smaller-footprint government in Texas. The question isn’t so much why as it is what took them so long.

Californians had better wake up to the realities of interstate competition, and begin to reform their policies to keep what jobs they have left. High-speed rail boondoggles aren’t going to save the Golden State — they may well contribute to sinking it.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Comment pages: 1 2 3

I own a Toyota Camry. Fine, fine car, and it looks like the people who run the company have good business sense as well.

LukeinNE on April 28, 2014 at 3:57 PM

avagreen on April 28, 2014 at 3:46 PM

jimbo has been banned here before.
Give the mods time-they’ll get him.

annoyinglittletwerp on April 28, 2014 at 4:00 PM

That’s because the migrating Californ-i-ans didn’t leave their political ideology at the CA border, DAD. Methinks Texas won’t cotton to becoming the same clusterfark CO did.

Newtie and the Beauty on April 28, 2014 at 3:53 PM

Ya – that was my point – they won’t leave their failed Kali ideologies behind.
And I wouldn’t be so sure about Texas shutting them down either.
I hate to remind you that Texas is the source of such Dem geniuses as Sheila Jackson Lee and Wendy Davis……

dentarthurdent on April 28, 2014 at 4:03 PM

Plano?
Why won’t any company relocate to west Texas?!!!

annoyinglittletwerp on April 28, 2014 at 12:47 PM

I was in Lubbock 5 years ago. Other than Texas Tech and its campus, there didn’t seem to be any good reason to be in Lubbock (or the Panhandle).

You have freezing weather and snow (much more than most of Texas) in winter and blistering heat and blowing dust in “good” weather–the worst of all climates.

The AFB closure apparently put a big nail in the Lubbock economy and it hasn’t seemed to have recovered.

And as far as I can tell, not many Texas Tech students decide to stay in Lubbock after graduation, unlike quite a few other college towns. That also says something about Lubbock’s desirability.

No wonder Pat Green got out of there.

Buddy Holly’s last thought before the plane crashed probably was “Well, at least I won’t have to live in Lubbock anymore”. (sarc)

If I’m wrong about this, please let me know.

jim56 on April 28, 2014 at 4:03 PM

Soon California will be renamed Mexico Minor where 90% of the population will be on the dole with the other 49 states footing the bill. Wine will be the only export and the sole import will be more labor from the motherland as the previous generation goes on U.S funded retirement.

Annar on April 28, 2014 at 4:09 PM

Toyota has been a great community partner in Torrance and the South Bay and it will be sad to see them go, but the move makes all the sense in the world. I know lots of folks who work there- mainly in legal — and I can’t imagine them moving, so it will mean more new jobs for Texans. Yay!

LASue on April 28, 2014 at 4:13 PM

Occidental Petroleum, and now Toyota (plus Chevron making noises after announcing the building of a new office complex in Houston) -
there is no way that this cannot be an election issue this year in the race for governor.
Jerry “Moonbeam” Brown will have to defend the path that he has set the state upon, and the reduced numbers of “good middle-class jobs” that are resulting.
But then, his opposition is the Republican Party, aka The Stupid Party, who will most likely fumble the ball, all the while being charged with racism for wanting those “good middle-class jobs”.

Another Drew on April 28, 2014 at 4:16 PM

dentarthurdent on April 28, 2014 at 4:03 PM

Those are two Big City Girls (Abortion Barbie is from Fort Worth, and SJL has a firmly gerrymandered sinecure in Houston).
It would take a natural disaster on the scale of Katrina plus a tornado plus an earthquake to remove SJL from the Congress;
Abortion Barbie will become just another footnote in TX political history after being politically spanked by Greg Abbott this Fall.

Another Drew on April 28, 2014 at 4:21 PM

dentarthurdent on April 28, 2014 at 4:03 PM

You forgot JEB!! ;-)

Newtie and the Beauty on April 28, 2014 at 4:30 PM

jim56 on April 28, 2014 at 4:03 PM

Well…we have something like a 4.5% unemployment rate, lots of space, low taxes, more churches than any cities of our size in the nation, and same goes for ‘eats’. There are too many muslims- because they come here for Tech and SPC. We could use more pig farmers and more Jews(orthodox ones especially)because that would help ‘muslim-proof’ the city.

annoyinglittletwerp on April 28, 2014 at 4:36 PM

…there is no way that this cannot be an election issue this year in the race for governor.
Jerry “Moonbeam” Brown will have to defend the path that he has set the state upon, and the reduced numbers of “good middle-class jobs” that are resulting. …

Another Drew on April 28, 2014 at 4:16 PM

California right now is about where New York City was at, circa 1973-74, when financially things were circling the drain and the negative quality-of-life issues were already obvious. But too many of those in charge — and many of the elitists who could afford to avoid the crime problems — were in denial, taking the attitude that “There are so many great things here no one who matters would ever want to leave!” So they basically called the people and companies moving out of the city idiots, traitors or worse until the bankruptcy crisis hit in the second half of 1975.

California’s officials, including the governor, ridiculed Perry last year for even thinking he could poach any major businesses, and the reaction to today’s Toyota announcement probably won’t be any introspection, but instead a lot of vindictive attacks and calls for California residents to boycott Toyota. They’re still a way from hitting bottom yet and facing reality.

jon1979 on April 28, 2014 at 4:36 PM

Toyota also closing its Engineering and Manufacturing North American HQ in Erlanger, KY to move to Plano, TX.

1,000 jobs. Just announced today.

Two year timeline? Apparently Plano facility not yet built.

Spiders from Mars on April 28, 2014 at 4:38 PM

Over 500,000 people moved to Texas in 2012.

California sent over 62,000 people to Texas, while Texas sent about 43,000 people to California.

My guess would be that the majority of Californians moving to Texas were conservative and the majority of Texans moving to California were liberal.

MichaelGabriel on April 28, 2014 at 4:41 PM

This is no big deal, the Cali workers will now have more time to surf and roam the wonderful beaches looking for seashells.

Bishop on April 28, 2014 at 3:09 PM

More like beg at busy intersections and roam the back alleys in search of bottles and aluminum cans.

Been in Texas for 2 1/2 years now. I’ve seen one beggar in Tyler. That’s it. Of course, the other day, there were some guys down at the intersection of two of the local FM’s. They were handing out free bottled water with a sign that they weren’t accepting donations. Texas is a bit different.

trigon on April 28, 2014 at 4:42 PM

Well…we have something like a 4.5% unemployment rate, lots of space, low taxes, more churches than any cities of our size in the nation, and same goes for ‘eats’. There are too many muslims- because they come here for Tech and SPC. We could use more pig farmers and more Jews(orthodox ones especially)because that would help ‘muslim-proof’ the city.

annoyinglittletwerp on April 28, 2014 at 4:36 PM

The rest of Texas has an unemployment rate within 2% (i.e., 3-6.5%) of Lubbock’s, lots of space and low taxes. Most of those cities have lots of restaurants and churches/places of worship, too.

So why choose Lubbock as compared to elsewhere in Texas?

jim56 on April 28, 2014 at 4:45 PM

Over 500,000 people moved to Texas in 2012.

California sent over 62,000 people to Texas, while Texas sent about 43,000 people to California.

My guess would be that the majority of Californians moving to Texas were conservative and the majority of Texans moving to California were liberal.

MichaelGabriel on April 28, 2014 at 4:41 PM

There’s a one-year old article that claimed most of the people who moved from CA to TX were conservative. Problem is there’s no information to determine how “conservative” was defined (and no other supporting data) and the sample size was apparently very small. So there’s no good way to know exactly what’s going on. And the fact that there isn’t any supporting data makes me suspicious about the conclusions.

http://www.texastribune.org/2013/03/11/polling-center-californias-conservative-migration/

jim56 on April 28, 2014 at 4:49 PM

jim56 on April 28, 2014 at 4:03 PM

It worked.

You didn’t stay.

avagreen on April 28, 2014 at 5:22 PM

So why choose Lubbock as compared to elsewhere in Texas?

jim56 on April 28, 2014 at 4:45 PM

You’re right. Stay away.

avagreen on April 28, 2014 at 5:23 PM

Great. More California transplants. just what Texas needs.

I really question the wisdom of conservative states inviting companies from failed states to their own borders; they seem to overlook that these companies often bring their liberal-locust employees and, in some cases, owners, with them.

avgjo on April 28, 2014 at 6:16 PM

Just Leave the liberal employees and their idiot voting back in Cali!

Whitey Ford on April 28, 2014 at 7:03 PM

Huurray! ! !
The Workers (isn’t it wonderful how Socialism robs a craftsman of his dignity by lumping him into the One-size-fits-all ‘Workers’?)of the Glorious Peoples Republic of Calitezca will no longer be exploited by the evil bloodsucking capitalists and their running dog Republican lackeys.

With no jobs to waste their time, the lucky Emanciateros can ride the new Choo-Choo train ALL DAY LONG.
If they ever build it.

thelastminstrel on April 28, 2014 at 7:08 PM

Hey Moonbeam and Steinberg, here is another order of Crow. Keep bragging about your SEIU, Environmental Wussies, Ambulance Chasers, La Raza, Delta Smelt, Disneyland, Castro Street, Hollyweird, La Brea Tarpits (joke), Infrastructure, Wine, Solyndra and the Oakland Raiders. It just takes Apple, Google, HP, Facebook and B of A to leave, the housing market to pop again and the end may be near. OH you cannot go swimming near the seals in LJ and Shamu has more rights than Filner.

Goodie on April 28, 2014 at 7:23 PM

Californians had better wake up to the realities of interstate competition,

They won’t. That’s what makes them Progressives. They’ll just grind bitterly and defiantly into Detroitness. All that education and zero educability. An irony lost on them, the costs of which the rest of us suffer.

rrpjr on April 28, 2014 at 7:50 PM

The problem with this is that Texas isn’t just stealing California jobs…. They’re stealing California voters as well.

SAMinVA on April 28, 2014 at 8:02 PM

Be careful for what you wish for. New Hampshire inherited flocks of new residents and companies in recent years primarily from our neighbors to the south. Inevitably, those who seek to escape the oppressive taxes from their home state return to the voting booth only to select the very system they ran from. My state is now purple and on its way to blue.

LiveFreeNH on April 28, 2014 at 8:05 PM

Awesome! And as this happens more and more in the single largest economy within the United States, guess who will be on the hook to bail them out down the road?

Great for Toyota/Japan, sorta great for Texas, lousy for California, and as always the majority of us taxpayers will get screwed over.

Dr. ZhivBlago on April 28, 2014 at 8:08 PM

I live about 90 miles west of Dallas, and I am thrilled with this news. Welcome to Texas, Toyota, and y’all will not regret the move, either….Texas is the best for business AND retirement…

bimmcorp on April 28, 2014 at 8:25 PM

Don’t mess.

Ted the Average on April 28, 2014 at 8:35 PM

This is no big deal, the Cali workers will now have more time to surf and roam the wonderful beaches looking for seashells.

Bishop on April 28, 2014 at 3:09 PM

That’s a big part of the problem. There’s dried kelp, but no seashells on California beaches– but they look for them anyway.

de rigueur on April 28, 2014 at 8:35 PM

Awesome! And as this happens more and more in the single largest economy within the United States, guess who will be on the hook to bail them out down the road?

Great for Toyota/Japan, sorta great for Texas, lousy for California, and as always the majority of us taxpayers will get screwed over.

Dr. ZhivBlago on April 28, 2014 at 8:08 PM

Where do you live that you have to pay for CA???? Seriously CA is still a net contributor to the US economy. Is CA a bad place for business? Absolutely not… it still attracts more Venture Cap than the rest of the country put together. Toyota located in LA because the port was where they brought the cars over. Now that they manufacture here it makes sense that they move their HQ closer to where Toyota’s operations are.

lexhamfox on April 28, 2014 at 8:44 PM

Yeah, why not Midland-Odessa? The Athens of the New World! Maybe they’re just intimidated that they won’t fit in with all that culture and sophistication. ;0

Actually Toyota wouldn’t be able to afford employees in Midland-Odessa.

Ars Moriendi on April 28, 2014 at 8:45 PM

jim56 on April 28, 2014 at 4:03 PM

It worked.

You didn’t stay.

avagreen on April 28, 2014 at 5:22 PM

Not in Lubbock, but I did elsewhere in Texas.

jim56 on April 28, 2014 at 8:53 PM

LiveFreeNH on April 28, 2014 at 8:05 PM

Massachusetts is New Hampshire’s Mexico.

pedestrian on April 28, 2014 at 9:26 PM

I live in Colorado now but have strong Texas roots. My mother’s side came in with Stephen F. Austin in 1823. In Texas that group is known as the “Old 300.”

You gotta love…

The only state that was a country first. Many old school Texans say that the only big mistake Texas ever made happened in 1845.

You don’t have to go back too many generations to find real pioneers. Which makes Texans more connected to the land than most. In my family, my GGG grandmother was scalped by the Commanches, who left my eventual GG grandmother alive in her crib, luckily for me. My GGGG uncle helped bury the remains of the Alamo defenders. He was Sam Houston’s scout. If you are an older Texan, you know his name

The only state where I ever watched land deals get written up on paper napkins in a cafe, more than once. That was for formality, handshakes actually closed the deals.

It was a good place to grow up.

Meremortal on April 28, 2014 at 10:48 PM

It’s great that they are seeing the light, but they need to leave their liberal philosophies and voting records behind as well or they will just turn Texas into the same blighted dystopian liberal society.

SupplyGuy on April 28, 2014 at 10:50 PM

I went back to California
But all the money was gone
There was no employment
There was no more jobs
Silicon Valley had disappeared
All those hi-tech outfits
The City had been pulled down
Reduced to parking spaces
A, O, way to go California

Kenosha Kid on April 28, 2014 at 11:29 PM

SCOREBOARD

Murphy9 on April 28, 2014 at 11:37 PM

Yeeha!

I love when the Governor poaches jobs from our enemies

Hilarious and heart warming at the same time…

Rick Perrys Parakeet on April 29, 2014 at 12:49 AM

Sorry, Charlie.

Sherman1864 on April 29, 2014 at 6:02 AM

I noticed I’m not the only one concerned that they’ll bring their failed voting policies with them. Same thing happened to Colorado..

golfer1 on April 29, 2014 at 7:18 AM

It’s great that they are seeing the light, but they need to leave their liberal philosophies and voting records behind as well or they will just turn Texas into the same blighted dystopian liberal society.

SupplyGuy on April 28, 2014 at 10:50 PM

They are not liberals – they are at best leftwing, but socialist, marxist, fascist, racist, intolerant, misogynistic, regressive, lying, and authoritarian describe them more accurately. Liberals love personal liberty (the base of the word – get it?), personal responsibility, and small government. Libertarians are liberals, not democrats or republicans. Only in the US do leftists get called liberals because amerikans are stupid.

earlgrey on April 29, 2014 at 2:06 PM

The question is where will the liberals go when they destroy all the states? Where will we go to escape the liberal policies?

Decoski on April 29, 2014 at 2:47 PM

Incentives matter. Exactly when can depend on the opportunity costs of doing something based on or in response to them. Big companies don’t like to uproot their operations and move them around without a lot of hard thought and consideration.

Eventually, you can make them move. It just takes a while and by the time you figure it out and want to get them to stay the cost to you may be all the greater because when someone decides to move, it means they’ve decided the additional cost to move, and everything else, is worth it.

Russ808 on April 29, 2014 at 5:12 PM

Comment pages: 1 2 3