Toyota is Moving its Head Quarters to Texas

[DAEMANO]

Originally Posted by 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.

I almost fell out of my chair when I read this post because I've read the EXACT (yes, word for word) verbiage posted on chain letters and right-wing political blogs time and time again.

I nearly didn't reply because it's so absurd that you would re-post these curated (e.g. cherry picked) "facts" without citation as if they were your own words. Don't know why you would. Understand that this copypasta is designed propaganda served up for those that would treat civil matters as team sports. This makes me sad.

[torqdork]

Originally Posted by DAEMANO

I almost fell out of my chair when I read this post because I've read the EXACT (yes, word for word) verbiage posted on chain letters and right-wing political blogs time and time again.

I nearly didn't reply because it's so absurd that you would re-post these curated (e.g. cherry picked) "facts" without citation as if they were your own words. Don't know why you would. Understand that this copypasta is designed propaganda served up for those that would treat civil matters as team sports. This makes me sad.

Cheer up! No need for the personal attack, I posted (not cut and pasted) facts derived from readily available sources as an alternative to your purely emotional claims. Here, this may help you understand why Toyota is, after more than 50 years, leaving California for sound reasons:

https://www.google.com/search?q=out+...sm=93&ie=UTF-8

[torqdork]

Originally Posted by Waukeen

This move is non-political in nature, I can guarantee you that.

I would respectfully disagree. Economics are inseparable from politics and culture, another form of morality. It's not always apparent, but why else would Toyota make such a drastic move to a more business friendly state other than politics and culture more favorable to a pro-business agenda?

[Waukeen]

Originally Posted by torqdork

I would respectfully disagree. Economics are inseparable from politics and culture, another form of morality. It's not always apparent, but why else would Toyota make such a drastic move to a more business friendly state other than politics and culture more favorable to a pro-business agenda?

Good point. -> This statement cannot be denied. ( I only meant this in a way as it is not to support a specific political agenda. Purely a business agenda.)

[DAEMANO]

@Waukeen
Once again thanks for the thoughtful personal discussion.

One thing I'd like to note - Toyota Motor Corporation is perhaps the healthiest auto mfg in the world. Toyota's fiscal 2013 ended in March. It was set to have it's highest profit in company history estimated at $18.8 billion and is sitting on up to $40 billion in cash. Toyota reported that profit came on cost cutting, a weaker yen, and strong national monetary policies. With especially strong results reporting from the United States.

[Waukeen]

Originally Posted by DAEMANO

One thing I'd like to note - Toyota Motor Corporation is perhaps the healthiest auto mfg in the world. Toyota's fiscal 2013 ended in March. It was set to have it's highest profit in company history estimated at $18.8 billion and is sitting on up to $40 billion in cash. Toyota reported that profit came on cost cutting, a weaker yen, and strong national monetary policies. With especially strong results reporting from the United States.

Your numbers are accurate, and undeniable. There is a means to the companies direction, and it is not purely automotive! The global direction you will see Toyota taking in the next 10 years will benefit nearly everyone. (and this takes a bunch of cash)

You are obviously an intelligent person! (i meant that seriously and not in a sarcastic way)

[serialk11r]

DAEMANO, California has the biggest economy, but it also has the biggest population. Herp derp. Some business does well here in spite of the hostile environment; NYC is just as bad if not worse in some cases, and there's plenty of business there too. I guess there's nothing wrong with either place? Well, that's clearly not what the people who are leaving think.

[red bread]

This thread is full of funny. I moved from Orange County to Dallas. First, while property taxes are higher and wages are generally lower, let's not forget that there's no state income tax. Roll SIT into PT and CA clobbers TX in overall taxation.

TX has been historically weak at attracting business, DFW specifically. See Boeing Relocation. But the suburbs of DFW are getting skilled at this and this will be a major win for Plano and North Dallas.

Of course Toyota weighed the financial benefits of this move for themselves, if they hadn't, we'd call them GM.

[robwbright]

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%)..

A good point, but you didn't factor in cost of housing which is obviously relevant to the amount of tax you're going to pay. A nice house in Texas is going to cost a whole lot less - all other things being equal - than a similar nice house in Cali. While Texas does have high property taxes - more than double those of Cali - the median house value in Texas is about one third the value of a house in Cali. $139,400 in Texas vs. $408,300 in Cali.

http://www.zillow.com/tx/home-values/

http://www.zillow.com/ca/home-values/

As such, the average homeowner in Texas is still going to pay less in property taxes per year than the average homeowner in Cali. Using your tax rates and the Zillow values, it's a property tax of $2,523.14 Texas vs. $3,021.42 Cali. (it should be noted are probably different than the assessed value for taxes - I don't know how they do assessed tax values in those states, but where I live there's a formula that averages taxable value out to about 40% of actual assessed value).

Of course, we'd also need to compare average income in order to know the "real" cost (percentage of income) for property taxes in each state.

$51,563 Texas vs. $61,400 Cali (from census.gov). So the person in Texas makes about 84% of what the person in Cali makes. And the person in Texas pays about 83.5% of the amount of property taxes that the person in Cali pays. Which means, relative to income and cost of housing, the property tax rates are basically identical as a percentage of income in both states - even though Cali's rate is significant lower on it's face.

So the individual in Texas isn't, in fact, worse off re: property taxes and Toyota can make more profits. Win, win.

[torqdork]

Originally Posted by red bread

This thread is full of funny...

Funny but also a bit alarming. I hope Jim Lentz has beefed up security.

[robwbright]

Originally Posted by red bread

This thread is full of funny. I moved from Orange County to Dallas. First, while property taxes are higher and wages are generally lower, let's not forget that there's no state income tax.

This. And see my post re: the property tax rates actually being basically identical in the two states for the individual homeowner relative to income and property values.

[DAEMANO]

Originally Posted by red bread

This thread is full of funny. I moved from Orange County to Dallas. First, while property taxes are higher and wages are generally lower, let's not forget that there's no state income tax. Roll SIT into PT and CA clobbers TX in overall taxation.

TX has been historically weak at attracting business, DFW specifically. See Boeing Relocation. But the suburbs of DFW are getting skilled at this and this will be a major win for Plano and North Dallas.

Of course Toyota weighed the financial benefits of this move for themselves, if they hadn't, we'd call them GM.

The point isn't what state has higher taxation for residents. It's that TMC is improving it's profitability by shifting taxation costs from itself to its U.S. headquarter employees. Why anyone defends this method (regardless if they live in CA or TX) is a commentary as to how disconnected folks have become from their communities and how connected they've become to corporations and their brands.

Your assertion that if Toyota didn't opt to relocate its 8-10k workers, they would become GM (which btw is also quite profitable) is also incorrect. No, Toyota's financial position is so outrageously positive, it would still be both the world's most profitable automaker and the world's largest no matter what they did with their U.S. corporate headquarters. Toyota isn't some sinking ship needing dire moves to stay afloat, they're simply improving their position on the backs of their workers and communities. Yep, full of funny.

[gramicci101]

Toyota is the world's most profitable automaker because they make reliable products for a minimum of cost to the company. If it costs the company more to house their HQ in California instead of Texas, why wouldn't they move to the new location? Less cost means more profit, and in the end companies are driven by profit. Shareholders and investors need to see continued growth, not just a large static sum.

As far as cost to the workers, it is regrettable. But those that can't or don't move can be replaced. Caring for one's employees can only go so far before it starts eating into your projected growth.

As far as people being uprooted from their lives and have to relocate everything halfway across the country? I'm in the military; I don't feel bad for them. I just moved across the country; a friend of mine is moving from the east coast to Japan. Her family is being uprooted and moved to an entirely different culture as well. That's just life.

[strat61caster]

Originally Posted by torqdork

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.

Refused. A couple companies in my area+industry moved to the Midwest, offered relocation packages to their employees and a fair number refused. I believe there was also a cut in pay involved but with the package the employee would come out ahead in the short term.

Within a few years a few who had refused the relocation came back wanting to relocate, the company was having a hard time finding skilled workers in the Midwest so I believe the same deal was offered and taken, relocation plus a cut in pay relative to the reduced cost of living.

This was around '10. Edit: And should be noted it's anecdotal, but not exactly outside the realm of possibility.