Toyota employees to learn details of move to Texas from California

Toyota employees to learn details of move to Texas from California

April 28, 2014 at 9:59 am

Alan Ohnsman

Bloomberg News

Toyota Motor Corp. is moving substantial parts of its U.S. headquarters in Torrance, Calif., to suburban Dallas as the world's largest automaker seeks savings from its U.S. sales unit, people familiar with the matter said. (Eric Thayer / Getty Images)

http://www.detroitnews.com/article/20140428/AUTO0104/304280038#ixzz30BVHf900

Toyota Motor Corp. is moving substantial parts of its U.S. headquarters in Torrance, California, to suburban Dallas as the world’s largest automaker seeks savings from its U.S. sales unit, people familiar with the matter said.

Employees will be informed of the plan Monday, said the people, who asked not to be identified disclosing private conversations. Steve Curtis, a Toyota spokesman, didn’t immediately return a call on the matter.

The surprise move is a blow to the Golden State, the biggest U.S. auto market and proponent of the strictest clean-air rules. Toyota’s Prius hybrid has been California’s top-selling model for the past two years and helped secure a leading 22 percent market share. It also represents a victory for Texas Governor Rick Perry, who’s made repeated visits to California to lure businesses to his state with promises of lower taxes and easier regulations.

“It would be very consequential for Southern California,” said Jack Nerad, executive market analyst for vehicle-price data service Kelley Blue Book in Irvine, California. “There might be some brain drain and tumult for employees, though it should be largely seamless to the consumer. This kind of thing can create some disruption of momentum.”

Toyota has more than 5,300 California employees, most at its Torrance campus in sales, finance, marketing, engineering and product planning. Details on which functions will move and when may be announced as soon as today, after the employee meeting. When Nissan Motor Co. moved its North American headquarters to lower-cost Tennessee in 2006, only 42 percent of employees initially chose to relocate.

The new regional sales headquarters may be in or near Plano, Texas, said three of the people who asked not to be named as the plan isn’t yet public. The majority of Toyota’s Torrance operations may move to Texas over a two-year period, the people said.

Lucy Nashed and Felix Browne, spokesmen for Perry, didn’t respond to e-mails on the matter.

Perry, in his final year as governor, began airing radio commercials in California during his March swing through the state that highlighted its high taxes.

“A year ago, I was here, in California, encouraging companies to look to Texas for expansion and relocation,” he said in the ad, paid for by a group called Americans for Economic Freedom. “Over the past year and a half, more than 50 California companies have announced plans to expand or relocate in Texas, creating more than 14,000 jobs.”

While Texas is home to Toyota’s pickup truck plant in San Antonio and a General Motors Co. factory in Arlington, the state traditionally hasn’t been a center of auto industry activity.

Separately, Toyota said it’s restructuring the Torrance-based U.S. marketing organization as part of an efficiency push without detailing how many jobs may be eliminated. Some employees are being reassigned to other parts of the company and there is a “voluntary exit program” for people who choose to leave, Toyota said yesterday in a statement. The revamped marketing unit will begin operating from May 1.

Toyota’s decision to scale back in California, where it established operations in 1957, comes as the company expects to report a record 1.87 trillion ($18.3 billion) of net income when it releases fiscal year results next month. Along with rising sales in North America and other international markets, Toyota’s earnings this year are benefiting from a decline in the value of the yen, which surged in 2011.

Since the company made that forecast, it agreed to a $1.2 billion fine to settle a U.S. Justice Department investigation into how it delayed recalling popular models after complaints of unintended acceleration.

U.S. sales for Toyota last year totaled 2.24 million cars and light trucks, off a record 2.62 million in 2007. Combined sales for the carmaker’s three brands fell 1.6 percent to 520,997 in the year’s first three months.

Toyota Motor Sales USA and Toyota Financial Services, based in Torrance, in suburban Los Angeles, have more than 9,400 U.S. employees. Torrance is home to Toyota’s Lexus and Scion lines, as well as its namesake brand.

Additional Toyota units in Torrance include parts and logistics operations to support dealers. The company’s Toyota University training center is nearby.

Southern California rivals Michigan as a U.S. automotive center. While it lacks large-scale vehicle manufacturing, the region has U.S. sales and marketing headquarters for Honda Motor Co., Hyundai Motor Co., Kia Motors Corp., Mazda Motor Corp. and Mitsubishi Motors Corp., along with Toyota. It is also the nation’s top automotive design center with 14 major studios, the largest concentration in the U.S.

Toyota Financial Services, the biggest auto finance company in the U.S., and Honda’s American Honda Finance Co. also in Torrance, makes the region a hub of lending and loans for dealers and car buyers.

Toyota Motor Corp

Akio Toyoda is the president of the Toyota Motor Corp., and his father is Shoichiro Toyoda.

Note: Shoichiro Toyoda is Akio Toyoda’s father, a director at the Maureen and Mike Mansfield Foundation, and was the president of the Toyota Motor Corp.

Thomas S. Foley was a director at the Maureen and Mike Mansfield Foundation, a partner at Akin, Gump, Strauss, Hauer & Feld, LLP, and a member of the Homeland Security Advisory Council.

Akin, Gump, Strauss, Hauer & Feld, LLP was a funder for the Center for American Progress.

Foundation to Promote Open Society was a funder for the Center for American Progress, and the Brookings Institution (think tank).

George Soros was the chairman for the Foundation to Promote Open Society, and a supporter for the Center for American Progress.

Toyota Motor North America was a funder for the Center for American Progress.

Toyota Motor North America is a subsidiary of the Toyota Motor Corp.

Toyota Motor Sales USA is a subsidiary of the Toyota Motor Corp.

Dennis E. Clements was a group VP for the Toyota Motor Sales USA, and is a director at the Asbury Automotive Group, Inc.

Vernon E. Jordan Jr. is a director at the Asbury Automotive Group, Inc., a senior counsel for Akin, Gump, Strauss, Hauer & Feld, LLP, an honorary trustee at the Brookings Institution (think tank), Valerie B. Jarrett’s great uncle, a director at the American Friends of Bilderberg (think tank), was a member of the Iraq Study Group, and a 2008 Bilderberg conference participant (think tank).

Valerie B. Jarrett is Vernon E. Jordan Jr’s great niece, the senior adviser for the Barack Obama administration, and a member of the Commercial Club of Chicago.

Cyrus F. Freidheim Jr. is a member of the Commercial Club of Chicago, and an honorary trustee at the Brookings Institution (think tank).

Lee H. Hamilton was a co-chair for the Iraq Study Group, is an honorary trustee at the Brookings Institution (think tank), and a member of the Homeland Security Advisory Council.

Thomas S. Foley was a member of the Homeland Security Advisory Council, a partner at Akin, Gump, Strauss, Hauer & Feld, LLP, and a director at the Maureen and Mike Mansfield Foundation.

Shoichiro Toyoda is a director at the Maureen and Mike Mansfield Foundation, Akio Toyoda’s father, and was the president of the Toyota Motor Corp.

Akio Toyoda is Shoichiro Toyoda’s son, and the president of the Toyota Motor Corp.