Toyota is Moving its Head Quarters to Texas

[Nevermore]

They're closing the office my dad works at here in Kentucky too. He'll probably be going back to Georgetown instead of to Texas.

[torqdork]

Missed this post minutes before mine about the same thing.

This decision goes beyond profits to politics, regulation and of course economics. It can't have been made lightly. With 4,000 white collar, highly paid, highly taxed (and upwards of 15,000 people counting spouses and family members) displaced, it's a travesty considering that it was completely avoidable. It's the most radical change in Toyota organization in over 50 years.

But, California is a one-party state unfriendly to business that Sacramento believes must be taxed and regulated to redistribute income from producers to takers who vote. Sad.

To add to the OP's quote, TM actually close up 0.54% today, not down as Bloomberg said and although their price is down this year they just bought back a huge chunk showing confidence looking forward no doubt due in part to this decision to relocate HQ to Texas.

And as for property taxes, I'm paying 2.3% in Oregon counting state, county, metro (don't ask) and city taxes, above the highest amount listed that might not include local bond levies.

[strat61caster]

Originally Posted by torqdork

I'm grateful not to smell like unleaded after a fill.

I'd like to see you pump gas...



[ame="http://youtu.be/ZnZ2XdqGZWU?t=2m42s"][/ame]

[torqdork]

Originally Posted by strat61caster

I'd like to see you pump gas...

Haha, c'mon out to a monthly track day and I'll let you re-fill my car from a 5 gal. can.

[strat61caster]

Originally Posted by torqdork

Haha, c'mon out to a monthly track day and I'll let you re-fill my car from a 5 gal. can.

Been there, done that, still managed to come home not smelling of fuel (methanol in my case) if I was mindful. Still curious as to what you're doing...

[torqdork]

About what?

[norsamerican]

everyone is coming to Texas we are badass..Exxon is relocating like 10k employees here as well

[Bristecom]

Originally Posted by DAEMANO

If by "Texans" you mean "Texas business owners" then yes congratulations. Because the majority of the those business friendly low corporate tax rates are being made up with astronomic property taxes. Texas now has the 3rd highest median property taxes in nation at 1.81%. California the 32nd (at .74%). The money has to come from someplace and it is, from homeowners (old and new).

These low corporate taxes and are no less than a transfer of tax expenses (and therefore wealth) from the middle class to the wealthy. Politicians spin it to sound good to the average job seeker, but it's a raw deal.

So yeah, before congratulating "Texans" on this, understand that your average Texas homeowner is getting stuck with the bill that your average corporation in a less "tax friendly" state would normally take up.

For Toyota, this is a move to keep increasing profit. Year after year, the profit % must improve. Don't be fooled into thinking this is about survival either. It's about more profit this year, than last, at the expense of homeowners in both Texas and California it stinks.

Source, I perform business analytics for the mortgage industry.

Are profits evil? I'd much rather a good company profit than a corrupt government. I am aware that Texas isn't perfect either but no doubt, California is becoming a very hostile environment for businesses and their taxes and regulations will only hurt themselves in the end.

[DAEMANO]

Originally Posted by Bristecom

Are profits evil? I'd much rather a good company profit than a corrupt government. I am aware that Texas isn't perfect either but no doubt, California is becoming a very hostile environment for businesses and their taxes and regulations will only hurt themselves in the end.

Originally Posted by Bristecom

Are profits evil?

Personally, I don't believe in evil because I find the concept too a simple way to hide from knowledge.

Originally Posted by Bristecom

I'd much rather a good company profit than a corrupt government.

And who or what corrupts government?

Originally Posted by Bristecom

I am aware that Texas isn't perfect either but no doubt, California is becoming a very hostile environment for businesses and their taxes

Why do you think California has a hostile environment for business when it has the largest economy in the country? Are taxes levied on businesses who earn money from California's infrastructure hostile? What is the motivation for this hostility?

Originally Posted by Bristecom

... and regulations will only hurt themselves in the end.

Who are these regulations intended to protect? If a business cares for its' community, why would these regulations hurt them?

[Waukeen]

If by "Texans" you mean "Texas business owners" then yes congratulations. Because the majority of the those business friendly low corporate tax rates are being made up with astronomic property taxes. Texas now has the 3rd highest median property taxes in nation at 1.81%. California the 32nd (at .74%). The money has to come from someplace and it is, from homeowners (old and new).

These low corporate taxes and are no less than a transfer of tax expenses (and therefore wealth) from the middle class to the wealthy. Politicians spin it to sound good to the average job seeker, but it's a raw deal.

So yeah, before congratulating "Texans" on this, understand that your average Texas homeowner is getting stuck with the bill that your average corporation in a less "tax friendly" state would normally take up.

For Toyota, this is a move to keep increasing profit. Year after year, the profit % must improve. Don't be fooled into thinking this is about survival either. It's about more profit this year, than last, at the expense of homeowners in both Texas and California it stinks.

Source, I perform business analytics for the mortgage industry.

I have to say, as an employee of Toyota in Texas, and a homeowner, this is a good thing. Sure, the property taxes will go up, but so will our property value, as it has been for the last 6 years. I have worked for Toyota for almost 8 years now as a Scion Director and Sales Manager. Toyota is one of the few good companies in the industry on a corporate level, both to it's employees, and to it's customers. I am glad that Toyota is moving HQ to Texas. Many of the employees will be offered to move with the company as well, and when I say many, I mean almost all.

When you look at the other side of the "property tax / housing cost" issue, you also have to think that they are making land more affordable in CA. I do feel bad for the employees that work at the HQ currently that do not wish to move, but do not be mistaken, they are definitely compensated for their loss of employment.

Yes, we do have some of the highest property tax rates in the United States, but do not forget that we also have the lowest average housing costs in the United States.... So I say, I can get a bigger/better house for my money, but I will have to pay the Man to keep it... I'm ok with that!

[torqdork]

Originally Posted by strat61caster

If you ever dreamed of working for Toyota now's the time to apply, whenever companies leave California there's always a good number of employees who refuse to relocate.

Edit: There's a handful of members on this board who work for Toyota in Torrance, wonder what their take is...

Refuse or can't? One reason I've heard a few times today is that so many are upside down on their mortgages that they'd have to declare bankruptcy to relocate.

I talked with some TMS associates tonight. Grief counselors were brought in to HQ today but there weren't enough to handle requests for help. So many of them also once dreamed of working for Toyota and relocated for the opportunity, and now this.

[DAEMANO]

Originally Posted by Waukeen

I have to say, as an employee of Toyota in Texas, and a homeowner, this is a good thing. Sure, the property taxes will go up, but so will our property value, as it has been for the last 6 years. I have worked for Toyota for almost 8 years now as a Scion Director and Sales Manager. Toyota is one of the few good companies in the industry on a corporate level, both to it's employees, and to it's customers. I am glad that Toyota is moving HQ to Texas. Many of the employees will be offered to move with the company as well, and when I say many, I mean almost all.

When you look at the other side of the "property tax / housing cost" issue, you also have to think that they are making land more affordable in CA. I do feel bad for the employees that work at the HQ currently that do not wish to move, but do not be mistaken, they are definitely compensated for their loss of employment.

Yes, we do have some of the highest property tax rates in the United States, but do not forget that we also have the lowest average housing costs in the United States.... So I say, I can get a bigger/better house for my money, but I will have to pay the Man to keep it... I'm ok with that!

All very good points.

And I agree that if you already live in Texas then Toyota increasing the size of their operation in Texas is probably going to work toyour benefit. It's understandable that someone already employed by TMC in Texas might see personal benefit, however there is little good for the worker that comes of corporate relocation on a mass scale for companies that are already successful. There is no threat to Toyota's health here.

This move is to decrease operating expenses and tax liability for TMC. In order realize these savings 8k-10k California workers will have these costs shifted directly to them.

Yes, as noted housing is cheaper in TX. However those cheaper housing costs are offset by both much lower wages (for perhaps both the relocated worker and their spouse), higher property taxes and decreased property value over comparable properties in California. Who benefits here? TMC.

For those who must choose corporate relocation or joblessness (even with a severance) this will likely be expensive and at the very least disruptive. To move, selling ones home (perhaps on a time crunch) forces workers to take whatever offers they can get. Breaking leases for renters can also be a cost. Losing access to family, & friends can also have significant costs as childcare, housing and transportation costs are often spread in the terms of familial child care, roommates, and ride sharing. Pulling children out of school, loss of social networks (groups, churches, etc), access to cultural centers, diversity, even weather are ancillary changes shouldered by the worker in the name of profit for TMC.

Not referring to you Waukeen, but to those others that cheer lead corporate moves like this simply based on some form of state pride or political affiliation, those folks could probably spend some time walking in the shoes of those who will be soon forced into these life altering decisions that only further pad the pocket of a TMC and their investors. Compassion is something that we all will need some time or another.

[torqdork]

Given California demographics, the reality is ongoing economic decline.

It is home to one-third of the nation's welfare recipients. It has the highest poverty rate of any state. There has been net domestic out migration for 18 of the past 20 years while even international in migration, legal and otherwise, has stalled. Mexico has a lower unemployment rate than California. The aging population will continue to drain social services while birth rates decline.

There won't be enough "compassion" to resolve these problems until conditions creating economic growth and jobs are in place but the opposite is happening.

How much "compassion" will it take? Already, budgets are unsustainable, unfunded liabilities are bankrupting cities around the state now, debt and deficits are rising while the tax base is leaving.

Toyota's announcement today should be a wakeup call, but some instead will demand yet more "compassion" that will only accelerate out migration.

As I said earlier, this is a shameful, completely avoidable travesty and violation of the public trust. Of course the same thing happens every day in Washington, the difference is that California can't print money, only raise taxes (of course they won't cut spending) and drive businesses and productive, self-reliant people away.

[Waukeen]

Yes, as noted housing is cheaper in TX. However those cheaper housing costs are offset by both much lower wages (for perhaps both the relocated worker and their spouse), higher property taxes and decreased property value over comparable properties in California. Who benefits here? TMC.

True point, however this is a simple economics. If everything is cheaper, you do not need to earn nearly as much. The average person that makes, let's say, $500,000 per year in California, can easily live the same lifestyle in Texas earning $250,000. So a 50% wage decrease is fairly acceptable, and completely normal. (don't get me wrong, I don't earn anywhere near that, but just using it as an example.) I know many people that now live in Texas that came from California for this specific reason. The average income to home value is much higher here in Texas than almost anywhere in the US. You do bring up some very valid points ->

For those who must choose corporate relocation or joblessness (even with a severance) this will likely be expensive and at the very least disruptive. To move, selling ones home (perhaps on a time crunch) forces workers to take whatever offers they can get. Breaking leases for renters can also be a cost. Losing access to family, & friends can also have significant costs as childcare, housing and transportation costs are often spread in the terms of familial child care, roommates, and ride sharing. Pulling children out of school, loss of social networks (groups, churches, etc), access to cultural centers, diversity, even weather are ancillary changes shouldered by the worker in the name of profit for TMC.

One thing to keep in mind, there is much less profit than you would think in auto sales, especially if you compare the profit/economy of 20 years ago. This is actually very minimal now. The average implied profit margin for a toyota vehicle is $900 (based on profit IF a customer pays MSRP) and approximatly the same profit to Toyota. To keep things in perspective, the average profit margin for an "american" vehicle is $3k - $4k, and the same margin to the manufacturers. Toyota makes much less money than you would think with the actual auto sales. Most "import" manufacturers have had to adapt to the WalMart way of business. Toyota must minimize costs, and I do not completely agree with the way it is happening, but unfortunately for the people in Cali, it is a necessary move Toyota must make.

It is terrible that many jobs will be lost, and to be honest, most workers have known about this for quite some time, or at least saw this coming. This move has been almost 4 years in the making. Toyota is not a company known for pulling the rug out from underneath people.

With two children of my own, I do absolutely agree with you about having to pull out of school and move children, and of their church/social groups. This is the part of this move that I don't like. We must adapt. I have moved with this company for similar reasons. Once to Canada, and then back to the USA. It was a very hard thing to do to my wife and children...

I do not intend to state that this is an "all out" great thing. But it is unfortunately a necessary thing. It's hard to understand, and unfortunately I cannot tell you why it is necessary other than saying, there is a necessity for this move, and the reason it did not happen sooner is because Toyota did not want to cause any of their employees mental, or emotional trauma. They did try to stay. This move is non-political in nature, I can guarantee you that.

I mean in no way to contradict you DAEMANO. I am just trying to make sure that the correct information is brought to light. I do agree that some companies tend to make this type of move in a cold, and non compassionate way. The sole reason that I work for Toyota is because of the fact that they do, in every way, try to take care of their employees as well as their faithful clients.

I really do wish that it was possible to split this move between the two states to offer a dual HQ to keep the TMC employees that cannot move from Cali, and to be able to offer something new to those that can. This would be my wish in a perfect world...