Video: Toyota bailing on California

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.

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David Strom 12:31 PM on December 07, 2022