California may have legendarily mild and pleasant weather going for it, but in terms of the business climate, the Golden State is also legendarily bureaucratic and burdensome, making it a prime target for more business-friendly states to recruit and persuade companies to move. Nissan made the move from the Los Angeles suburb of Gardena to the Nashville, Tennessee, area in 2005, ultimately building a new headquarters and settling in the Nashville suburb of Franklin. Nissan's U.S. operations had been based in Southern California since 1958. Now, it looks like Toyota may soon follow suit, with a report from Automotive News suggesting it may move its North American sales and marketing headquarters from Torrance, California, to the Dallas, Texas, suburb of Plano.
At approximately 11 a.m. Pacific Time today, Toyota confirmed the Automotive News story by issuing a release confirming the move. The company announced a consolidation of its operations in Torrance, California, and its engineering operations in Erlanger, Kentucky, to a new campus in Plano. Approximately 4000 employees will be affected by the move. Construction will begin in Fall 2014, and is expected to be completed by late 2016 or early 2017.
In an official statement, Toyota North America CEO Jim Lentz, said the move would help the company to be "better-equipped to speed decision making, share best practices, and leverage the combined strength of our employees." Lentz went on to say "This is the most significant change we've made to our North American operations in the past 50 years, and we are excited for what the future holds."
Like Nissan, Toyota has a long history on the West Coast, being based in Southern California for more than 50 years. Although the report comes as somewhat of a surprise, looking at the larger logistical picture, such a move would make sense. Since the closure of the NUMMI joint-venture plant in Northern California in 2010, Toyota has few manufacturing operations on the West Coast, with only a plant in Tijuana, Mexico, which makes some Tacomas, and builds truck bed assemblies. The majority of Toyota's manufacturing operations are in or around the Southeast, including Mississippi, Kentucky, an engine plant in West Virginia, and the truck plant that builds the Tundra and Tacoma in San Antonio, Texas.
Texas Governor Rick Perry has also been very aggressive in recruiting businesses in heavily regulated and taxed states to move to the low-tax, laissez-faire regulatory environment of the Lone Star state. It's likely Perry presented a highly attractive package of tax breaks and incentives to persuade Toyota to relocate. An official announcement of the move is expected to come within a few weeks.
Source: Automotive News, Toyota