Report: Toyota Says ‘Later’ To California, ‘Howdy’ To Texas

Barb Wire

The Japanese car maker Toyota Motor Corp. will shift most of its U.S. headquarters from California to Texas, according to several sources cited by Reuters and Bloomberg.

The move will occur over several years and affect several thousand of Toyota’s 5,300 sales and marketing employees in Torrance, Cal.

A location in Plano, Tex. is being eyed for the new facility, the Dallas Morning News reports.

Toyota sells 2.2 million vehicles a year in the U.S. and has manufacturing facilities in Texas, Kentucky, West Virginia, Alabama and Indiana. The company opened its first facility in California in 1957 and its Torrance headquarters in 1982.

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The move, expected to be announced Monday, could be the fruit of a campaign led by Texas Gov. Rick Perry who has sought to poach businesses from the Golden State.

Perry, who is serving his last term as governor but has eyes on a 2016 presidential bid, has traveled to California numerous times to tout the Lone Star State’s business-friendly climate.

“Building a business is tough,” said Perry in a television ad released last year, “but I hear building a business in California is next to impossible.”

In both 2012 and 2013, Texas was ranked the best state for business in a survey conducted by Chief Executive. California was ranked 50th.

Last year, CNBC ranked California 47th on the same measure while Texas was ranked 2nd.

Nissan, another Japanese automaker, left California for Tennessee in 2005. The company cited lower business costs as a major reason for the move. In recent years, Campbell Soup, Chevron, and Comcast have all shifted facilities and jobs from California to other states.

A debate has raged over whether a substantial number of California businesses are indeed fleeing for other states, especially Texas. A political element is at play given that California is considered a Democratic stronghold while Texas is mostly Republican.

In 2012, California lost 5.2 percent of its businesses, though it has been difficult to determine whether firms relocated or merely closed down.

What is clear is that more California citizens have relocated to Texas than the other way around. For every 100 Texans that move to California, 183 Californians have moved to Texas since 2005, according to a Forbes article last year.

The unemployment rate for Texas is 5.5 percent while California’s rate is 8.1 percent, according to the most recent report from the Bureau of Labor Statistics. The U.S. average is 6.7 percent.

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