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Rick Perry: Toyota to invest over 300 million in move to Texas

By DSNews on Apr 29, 2014

Toyota is moving its North American Headquarters to Plano, TX. It’s a convergence. Three of the locations in Erlanger, KY, New York, NY, and Torrance, CA will fuse into what Toyota has called a, “state-of-the-art “ facility in Plano, TX. The Toyota location in Ann Arbor, MI, the “Toyota Technical Center” will be expanded as “direct procurement” jobs are moved from the Erlanger, KY location to York Township in Michigan. A new facility will also be built in Granger, KY to take on some 300 positions from the Erlanger location. The move, the transition of around 4,000 employees in total, according to a Toyota Press Release, will occur over a period of about three years.

Jim Lentz, CEO of the Toyota North American Region said, in a statement that, “With our major North American business affiliates and leaders together in one location for the first time, we will be better equipped to speed decision making, share best practices, and leverage the combined strength of our employees.  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.” 

Make no mistake about it: this move will save Toyota money. The corporate tax rate in California is 8.84%, 6% in Kentucky and 7.1% in New York. Toyota is trading those rates for both a zero percent corporate tax rate in Texas and a pledge from the Texas Enterprise Fund to the tune of a reported 40 million dollars. The (TEF) is a state-sponsored fund that “offers companies incentives to create jobs in invest in Texas.” Commenting on the move, Texas Governor Rick Perry said that, "Toyota understands that Texas' employer-friendly combination of low taxes, fair courts, smart regulations and world-class workforce can help businesses of any size succeed and thrive.”

Perry is not new to welcoming companies from other states into Texas. With a $300,000 grant from Americans for Economic Freedom, Perry has gone on the offensive in trying to bring companies to Texas. 60 companies have moved to Texas since July 2012, according to the L.A. Times and Perry has said that 50 companies are currently slated to either move to, or expand to Texas in because of the economic climate.

While Perry is succeeding in his efforts to bring  certain businesses to Texas, his plan may not work as well with another up and comer in the auto industry. Tesla, the electric car manufacturer that is constantly making headlines for legal battles, is expanding. The Elon Musk-owned Company will build a “Gigafactory,” which promises 6,500 new jobs in an undisclosed state. California is making a large push with reportedly promised environmental and economic subsidies. Nevada and New Mexico are also in the running to host the five billion dollar facility. Meanwhile, Texas and Arizona both want Tesla to build the factory in their state, but both states also currently outlaw the direct-to-consumer sales model employed by Tesla. We will keep you updated on both the Toyota and Tesla situations as both stories continue to develop.

 

Comments

This is a great strategic move for Toyota. With Nissan's exit from California a few years back the trend will continue and I have to believe that Honda, Mazda and maybe even a Detroit based OEM/headquarters will move large segments of their staff's to more tax and weather friendly climates. There is no doubt that California has a wealth of incredible talent but that can't overcome the burdensome high taxes and utility costs.

April 29th

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