Is Toyota's Move to Texas Good For Lexus?
Today Toyota announced it's moving a significant amount of its operations from Torrance to the Dallas, Texas suburb of Plano. The move is a sound business decision: not only is it cheaper for corporations to do business in Texas, but also, the Lone Star State sweetened the pot by offering a Toyota $40 million payout from its Texas Enterprise Fund. As minor as that sum might seem when measured against Toyota's global profits, that kind of coin still buys a lot of brisket.
"Despite emissions laws which seem determined to strangle the hot rod culture it birthed, Southern California remains the epicenter of global car culture."
Toyota says this is "a move designed to better serve customers and position Toyota for sustainable, long-term growth," and that's hard to deny. Toyota products are more popular on the coasts, especially in California: 2013 marked the second consecutive year the Prius had been the best-selling car in Golden State. Toyota's move might go a long way toward winning the hearts and minds of folks more inclined to buying Fords and Chevys--not "Prii."
Good as this may be for Toyota's business operations, what does it mean for Toyota--and Lexus--culturally? Texas overall is a nice place to visit, and the Circuit of the Americas is a gorgeous track, but Texas's much-heralded low cost of living doesn't mean it's some kind of panacea--and there are hidden costs. One example? It gets really cold in Plano. And really hot. There are no extremes in like that in SoCal. Employees acclimated to temperate Torrance are going to have to get used to boiling and freezing, say hello to outrageous electric bills and goodbye to the Pacific Ocean.
Will Toyota and Lexus lose a significant amount of talented personnel when it moves its headquarters? Think about it: if you have skills that are in demand, and you can easily find another job in California, wouldn't you choose to stay in the Golden State, instead of uprooting your life?
Only 42 percent of employees chose to relocate with Nissan when that company moved its operations from SoCal to Tennessee. Nissan's doing fine eight years after the move, but you have to wonder how things could have been different if it had stayed in California.
Would the company have saddled its stable with fuel-sipping but soul-crushing CVTs?
Because for all of SoCal's myriad flaws, there's no arguing that 50 years after the airwaves echoed with the high-octane tunes of the Beach Boys and Jan and Dean, and despite emissions laws which seem determined to strangle the hot rod culture it birthed, it remains the epicenter of global car culture. For gearheads, the often clogged arteries of Los Angeles are the Serengeti of car spotting--you'll see animals in the wild that you'll never see anywhere else.
How will removing that intangible benefit reflect on future product? How will it impact the moral of folks more used to sandy beaches than spicy brisket?
Best case scenario, Toyota easily transitions to Texas, the company becomes stronger than ever, and we get a follow-up to the LFA that's 10 times more sensational than the Koenigsegg One:1. Worst case scenario, every Lexus model, whether American-built or imported, will have steer horns affixed to the front.
You can thank me for growing your list of worst nightmares.
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