Today, Toyota- the world’s largest automaker- has officially announced that they will be moving their national headquarters from sunny Southern California to the wild plains of Plano, Texas. The move is an attempt for the company to consolidate their operations to one central location.
“We’re looking at bringing together, for the first time in our 57 year history, four headquarters affiliates into one unified North American team,” said Toyota’s chief communications officer, Julie Hemp. “We believe the advantages will be better for our customers and dealers, the career development for our associates, and will allow us to vastly increase our ability to compete.”
The move will undoubtedly be good for Toyota (who, by the way, is also a world leader in recalled vehicles). There’s no denying that. But this transition has much broader implications, as well. The largest of these has to do with the trajectories of California (the country’s bluest state) and Texas (the country’s reddest).
Less than a decade ago, California was a thriving automotive state, housing the Japanese Big 3- Toyota, Nissan, and Honda. In 2005, though, Nissan announced a move to Tennessee and in 2013 Honda moved to Ohio, both Republican states.
Forbes writer, Dale Buss, says, “California’s business climate is becoming an even bigger downer. California has become infamous with business executives and owners there not only for high tax rates and complex taxing schemes but also for overzealous regulations and regulators that have managed to stifle the entrepreneurial energy of thousands of companies…Even Hollywood studios have been souring about producing flicks in California.”
Texas, on the other hand, lured Toyota with a reputation of golden mountain tops and flowing rivers of honey. This sudden move was no accident, either. It was all part of a $300,000 advertising campaign that Governor (and presidential hopeful) Rick Perry has executed beautifully.
Just last month, Perry’s plan hit full stride when he began airing radio commercials that highlighted California’s high taxes. “A year ago, I was here, in California, encouraging companies to look to Texas for expansion and relocation,” Perry says in the ad. “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.”
With their decision to move, Toyota will join Perry’s expansion and now save money through lower business taxes, real estate prices, and cost of living. It’s a development that bodes well for Toyota, Texas, and Perry. For California, it’s just one more bitter loss.