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Toyota moving from Cali to Plano, Texas

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Old 04-29-14, 10:47 AM
  #106  
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Toyota's move relied on in-house study rather than Perry pitch

Well this kills all the political know it alls.

DALLAS (Bloomberg) -- Texas Gov. Rick Perry has crisscrossed the United States to persuade big employers to bring jobs to the second most-populous state.

For all the Republican’s efforts, Toyota Motor Corp.’s North American CEO, Jim Lentz, said the Japanese automaker relied on its own in-house analysis of 100 cities, rather than sales pitches, in deciding to move its headquarters to the Dallas area from Southern California.

Perry, 64, who touted Texas job growth as he sought the presidency in 2012, offered $40 million in incentives to help lure the world’s largest carmaker to bring as many as 4,000 jobs to a sprawling office park in suburban Plano. That may help the state’s longest-serving governor if he decides to run again for the White House in 2016.

“Perry has now got the proof in the pudding that Texas has become a huge jobs magnet,” Mark McKinnon, a former adviser to President George W. Bush, said in an e-mail. “Every candidate for president needs a solid narrative. Perry now has one.”

It’s a narrative that Perry can contrast with higher costs and tougher regulations in California, where Gov. Jerry Brown, a 76-year-old Democrat, won voter approval of income- and sales-tax increases in 2012.

“The move reinforces the idea that California is a bad place to do business,” said John Pitney, a political science professor at Claremont McKenna College in Claremont, Calif. “Rick Perry will exploit the move. It is a great way to tout the Texas business climate, and it could give him a talking point in a 2016 presidential campaign.”

Tour of states

For Perry, who has taken publicized trips to California, Missouri, Illinois and New York to lure potential employers, Toyota’s move takes some of the air out of dismissive comments. Brown had mocked a Texas ad campaign to lure jobs from his state as a “burp, barely a fart.”

Toyota’s Lentz said the Plano location offered better proximity to manufacturing operations in Texas, Mississippi, Alabama and Kentucky.

Perry’s trips to recruit companies in California weren’t a factor in the move, Lentz said. He said he spoke to Perry for the first time Monday, the same day he informed California officials of the decision.

“When we made the decision that we weren’t going to go to one of our three existing locations, our search started with about 100 different cities,” Lentz said in an interview. “We put together a decision matrix that put together economic considerations, business considerations, associate considerations.”

Aggressive funnel’

“The first pass through that funnel eliminated 75 of those 100. We put a more aggressive funnel in place and that 25 went down to seven,” he said, without naming the other locations.

“Four of them we considered primary locations; three of them we considered secondary locations,” Lentz said. “We visited all four of those primary locations and it became quite clear that [Dallas] was the primary choice.”

“So it really had nothing to do with a Texas-versus-California decision,” he said. “Once California was out of the decision, it was really Texas versus three other locations.”


Brown didn’t take questions Monday at a public event in Lancaster, Calif

Brook Taylor, a spokesman for the Governor’s Office of Business and Economic Development, defended Brown’s track record in a statement citing expansion by Roche Holding AG’s Genentech unit and Amazon.com Inc. “in part, because of pro-job policies pushed by the administration.” Ford Motor Co., Volkswagen AG and Nissan Motor Co. continue to invest in California and the state is at “the center” of new electric vehicles, he said.

Consolidating operations

Toyota will be consolidating North American operations in a new headquarters in Plano, located 20 miles north of Dallas.

Plano officials became aware of the company’s interest and began working to win the deal three months ago after it was brought to them by Perry’s economic development officials, said Steve Stoler, a city spokesman. While the city was competing with others, Stoler said he didn’t know the names of those involved.

Stoler declined to detail the incentive package offered by the city, saying it would be voted on by the city council next month. He said he expected the plan would be approved.

‘Strong’ relationship

Toyota’s corporate presence in the state got a jolt in 2006 when it opened a plant to build pickup trucks. Perry has maintained “a strong working relationship” with the company since then, said a Perry spokesman, Lucy Nashed.

Perry promotes the state’s policies for keeping taxes low, regulation limited and fostering a “workforce that is skilled and ready to do any job,” she said.

“The move accentuates some of the things that Perry says are generating results,” said Mike Berry, president of Ross Perot Jr.’s Hillwood Properties, a development firm based in Fort Worth. He cited the Dallas-Fort Worth International Airport, the region’s housing stock and work force as selling points for Toyota.

“You just don’t see economic development announcements of this size more than about once every decade,” Berry said.
 
Old 04-29-14, 10:56 AM
  #107  
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$40 Million cash delivered to Toyota to move, from public funds. hmmm.....
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Old 04-29-14, 11:01 AM
  #108  
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Originally Posted by LexFather
Funny, Toyota didn't state any of that in their Q&A
That which is obvious usually doesn't have to be stated. And I agree that politics, though part of it, wasn't the only reason. Still, for purposes of the thread-discussion, as I see it, taxes and regulations fall under the subject of what most people would call politics.



Toyota already has operations in Texas so lets stop acting like Toyota just decided to move because of what you and others think.
Yes, I well-aware that they had previous operations in San Antonio, first with Tundra engines and then the trucks themselves. They chose Texas for truck production at least partly because of its cowboy/rancher image and the large number of pickups annually registered in the state. But that was simply for a factory/assembly plant, not for national operations or its HQ.


. Surely some reasons stated (taxes, politics etc) had something to do with it but it surely was not the SOLE REASON as stated here.
Agreed. I'm not arguing that it was. Only that one cannot escape at least some mention of it if you look at the whole picture.

California has many benefits including an incredible talent pool and being arguably the car capital of the world.
I agree that L.A./SoCal is the center of the country's car culture (I myself have done several threads on that, and the country's major auto shows). But traffic there has become so much of a mess (yes, just like here in my own D.C. area) that the car culture has also become a culture of gridlock.
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Old 04-29-14, 11:05 AM
  #109  
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you obviously dont move an entire division just because a Governor said so. Perry doesnt know Toyota's exact circumstances he can only tell you the high level stuff. You have to do detailed studies yourself to determine exact cost/benefit analysis - Perry isnt going to do that. But dont kid yourselves into thinking this wasnt about taxes and regulation. Its just a PC press release without starting an interstate war with other states. Yea it wasnt a Texas vs Cali decision, more like everyone else but Cali decision. Would easily be saving $10s maybe even 100s of millions a year without that state corporate income tax among others. Toyota hasnt been the only company moving their HQs to Texas. Yea they keep mentioning efficiency - yea efficiency also means lower costs. There maybe a talent pool but remember, talent pools can move. Especially when such talent is enticed with such a deal as this should be.

Once the biggest car manufacturer leaves, how many others will also follow and leave.

Last edited by 4TehNguyen; 04-29-14 at 11:23 AM.
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Old 04-29-14, 11:15 AM
  #110  
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Originally Posted by venom21
$40 Million cash delivered to Toyota to move, from public funds. hmmm.....
not exactly free money, lot of requirements attached to it. Bring the companies to texas then the workers will follow. Each of these workers generate property, sales, and other taxes. Lot better than blowing $40M on overpaid govt workers pensions.

http://bizbeatblog.dallasnews.com/20...o-toyota.html/

http://governor.state.tx.us/ecodev/f...terprise_fund/

http://en.wikipedia.org/wiki/Texas_Enterprise_Fund
The Texas Enterprise Fund is a business incentive fund that was created by legislation in 2003. The fund, which had an initial $295 million investment, is used for ensuring the growth of business in Texas. One of Texas’ most competitive recruitment tools, these funds are used primarily to attract new business to the state or assist with the substantial expansion of an existing business as part of a competitive recruitment situation. Sources indicate that since 2003 the Fund has yielded up to $6.3 billion in capital investment in Texas by out-of-state companies [1].

Last edited by 4TehNguyen; 04-29-14 at 11:19 AM.
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Old 04-29-14, 11:22 AM
  #111  
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Originally Posted by 4TehNguyen
you obviously dont move an entire division just because a Governor said so. Perry doesnt know Toyota's exact circumstances he can only tell you the high level stuff. You have to do detailed studies yourself to determine exact cost/benefit analysis - Perry isnt going to do that. But dont kid yourselves into thinking this wasnt about taxes and regulation. Its just a PC press release without starting an interstate war with other states. Would easily be saving $10s maybe even 100s of millions a year without that state corporate income tax among others. Toyota hasnt been the only company moving their HQs to Texas. Yea they keep mentioning efficiency - yea efficiency also means lower costs.

Once the biggest car manufacturer leaves, how many others will also follow and leave.
And Cali continues to also gain companies. Lets not act like Cali is just losing companies and not gaining any. If you look at the second article I posted a good point is made about the electric car investment in Cali going on.

No one is saying that Cali's higher taxes etc didn't influence the move. Surely it did but it was not the only and main motivator.
 
Old 04-29-14, 11:46 AM
  #112  
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Originally Posted by venom21
$40 Million cash delivered to Toyota to move, from public funds. hmmm.....
thats probably less than monthly payroll of future Toyota operations in Plano...

So you give them 40 million and then they pump at least 40 million through payroll alone, for the next 50 years.
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Old 04-29-14, 11:48 AM
  #113  
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A lot of tough decisions I need to make .......

Knowing that Honda already moved their HQ to Ohio last year and that Nissan left years ago, I fear it's only a matter of time before Hyundai and Kia move their HQs from CA as well. That leaves me with Mazda or Tesla if I want to stay with the automotive industry, which I do......

The ironic part about the whole thing is I've been commuting 60 miles a day to TMS for the last 7 years. Two days before the news started to get out about the move to TX, we put a deposit down on a townhome 7 miles from TMS so I could end that long daily commute (thankfully just a one year lease and did not purchase). Haha....isn't that ironic.... we move in to the new place in two days.... I might as well keep some things in boxes for the next big move.

I do truly feel for the associates who need to consider family, kids, houses, etc.... it's a very difficult decision but Toyota is handling this quite well, providing a lot of time to consider and offering great support and packages to move.
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Old 04-29-14, 12:08 PM
  #114  
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toyota made a decision they viewed as best for them after a thorough review and solid process. as i quoted earlier, california ranks worst in states to do business in by ceos, so that was obviously a factor. does that mean california has no upside? of course not. tremendous number of graduates coming from great schools, lots of energy, capital (still) and high tech, and obviously great natural beauty to attract people. but states like new york and california continue to lose people and companies, for obvious and the same reasons while texas and florida continue to gain people and companies, again, for obvious and the same reasons.

texas is very fortunate to have toyota's hq moving there.

in the q&a, i was glad to see akio toyoda wants toyota u.s.a to become self-reliant.
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Old 04-29-14, 12:10 PM
  #115  
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IntegresS - wish you all the best with your decisions and future!!!! life should be an adventure... if you end up moving somewhere and don't like it, you can always move back. not 'easy', but not impossible either.
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Old 04-29-14, 12:14 PM
  #116  
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Originally Posted by IntegresS
A lot of tough decisions I need to make .......

Knowing that Honda already moved their HQ to Ohio last year and that Nissan left years ago, I fear it's only a matter of time before Hyundai and Kia move their HQs from CA as well. That leaves me with Mazda or Tesla if I want to stay with the automotive industry, which I do......

The ironic part about the whole thing is I've been commuting 60 miles a day to TMS for the last 7 years. Two days before the news started to get out about the move to TX, we put a deposit down on a townhome 7 miles from TMS so I could end that long daily commute (thankfully just a one year lease and did not purchase). Haha....isn't that ironic.... we move in to the new place in two days.... I might as well keep some things in boxes for the next big move.

I do truly feel for the associates who need to consider family, kids, houses, etc.... it's a very difficult decision but Toyota is handling this quite well, providing a lot of time to consider and offering great support and packages to move.
If you move to Texas with Toyota, you will probably be able to buy a nice home for less than you're paying lease in CA. Good luck.

P.S. I wish I had some connections in TX so that I could move my business out of miserable NYC.
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Old 04-29-14, 12:23 PM
  #117  
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Originally Posted by 4TehNguyen
Perry doesnt know Toyota's exact circumstances he can only tell you the high level stuff.
Thanks...glad you mentioned Perry. He has been criss-crossing the country for some time, trying to drum up buisness for the Lone Star State. He came right next door here to Maryland recently and tried to get some local buisnesses in Montgomery County (Washington, D.C. suburbs) to relocate. Maryland is not known as a particularly buisness-friendly state, despite its dramatic growth in recent decades.
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Old 04-29-14, 12:36 PM
  #118  
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Many people are getting hung up on one or two issues and not looking at it from Toyota Corporation's overall view. They have to look to the future, not the golden past with CA's car culture of the 50's and 60's, or when the business environment in CA was welcoming and understood by those in government and business. That environment is gone, and has been for many years in CA. High taxes, ever more environmental restrictions and a cultural elite who looks at disdain on any business associated with fossil fuels starts the caution lights flashing to all businesses. Toyota looked at it's deteriorating poker hand and decided to exit the game now rather than later.

Many companies have pulled up roots and moved to other states over the years, with the same hand wringing that is shown in this thread .....loss of talent, weather concerns, and on and on. In the end Toyota will indeed lose some people who are close enough to retirement that they can stay behind, or feel they have other options in CA with other companies. Toyota knows that but in the end the pluses outweigh the minuses. Many people will grumble but look at their position with the company, the state of the economy in CA and TX, and will decide to move. I've known many people who swore that they would never move out of CA, until their company moved them to another location and then they look back and say it wasn't so bad. Home is where you make it....I've lived in seven states and four foreign countries and once you get planted in a location you make the best of it.....none were regretted in the long haul. Toyota's employees will be no different. CA does indeed have a great climate and that counts for something, but it starts being less a factor when high housing, high taxes, long commutes and the general downbeat attitude you find in CA these days starts intruding on the benefits of the climate.

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Old 04-29-14, 02:25 PM
  #119  
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Well stated Evitzee
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Old 04-29-14, 03:46 PM
  #120  
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Originally Posted by IntegresS
Knowing that Honda already moved their HQ to Ohio last year and that Nissan left years ago, I fear it's only a matter of time before Hyundai and Kia move their HQs from CA as well. That leaves me with Mazda or Tesla if I want to stay with the automotive industry, which I do......
Hyundai barely finished their new HQ in FV.
Don't think they'll pack up anytime soon

Unfortunately, it's not new hearing big companies leaving CA.
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