Fleeing California: Toyota takes its business (and its jobs) to Texas

April 28, 2014

Moving

Oh, man, this is just a gut punch to the Southern California economy:

Toyota Motor Corp. plans to move large numbers of jobs from its sales and marketing headquarters in Torrance to suburban Dallas, according to a person familiar with the automaker’s plans.

The move, creating a new North American headquarters, would put management of Toyota’s U.S. business close to where it builds most cars for this market.

North American Chief Executive Jim Lentz is expected to brief employees Monday, said the person, who was not authorized to speak publicly. Toyota declined to detail its plans. About 5,300 people work at Toyota’s Torrance complex. It is unclear how many workers will be asked to move to Texas. The move is expected to take several years.

I don’t know how many will move to Texas, but I bet several thousand won’t. And that doesn’t even address the ripple effects in the region’s economy, all sorts of support businesses that would lose the revenue spent by those employees — restaurants, dry cleaners, janitorial companies, you name it. Those people won’t be heading for Texas; they’ll be stuck here. And it’s going to hurt.

Toyota originally came to LA in the late 1950s, and staying here made sense for them for a long time, in spite of increasingly burdensome taxes and regulations. After all, most of their cars entered the US through the huge Port Of Los Angeles, so it made sense to have the North American HQ nearby.

But, with the passage of time, Toyota, like so many foreign car manufacturers, built more and more of their cars here in the US, mostly choosing to construct their facilities in business-friendly Southern states… such as Texas. The last auto manufacturing plant in California, coincidentally Toyota’s, closed in 2010. Eventually, economic logic (1) lead the company to decide that the cost of living and business in California wasn’t worth staying in California, not when their manufacturing operations had all shifted to Texas and nearby states.

As Dale Buss writes at Forbes. After talking about the structural shift in Toyota’s business, he looks at the once-Golden State:

Besides, 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 movie studios have been souring about producing flicks in California, increasingly reckoning that the sweet tax breaks and assistance packages now offered by so many other states offset the legacy advantages and ideal production climate in California.

About the only vast remaining pocket of dynamism in the California economy is Silicon Valley, where the mastery of the global digital economy by companies ranging from Google to Hewlett-Packard has become so complete that they have been able to succeed despite the home-state business landscape.

In the annual Chief Executive magazine “Best States / Worst States” ranking that surveys CEOs for their opinions, Texas has been holding on to the No. 1 spot for a while; California seems permanently relegated to No. 50.

As Automotive News put it, “Despite the deep, creative talent pool in greater Los Angeles, doing business in California has become more expensive for companies and their workers.” Bestplaces.net said that the cost of living for employees is 39 percent higher in Torrance than in Plano, and housing costs are 63 percent lower in Plano.

Thus, over the last 10 years, the Lone Star State has stolen so many jobs from the paragon of the Pacific Coast that Toyota’s reported move should come as no big surprise.

No, it’s no surprise, but it is maddening because it is a largely self-inflicted wound. Business flight has been going on for a few years, now, and, no, “Green jobs” just aren’t going to fill the gap. Heck, a businessman even set up a consulting firm to help companies “abandon ship.”

Losing Toyota should be a loud, blaring alarm for Governor Brown and the progressive oligarchs who dominate our legislature, for it’s their policies, piling on regulations and taxes year after year, decade after decade, that have made it nearly impossible to build a business here. (Just read this “Dear California” letter from a small businesswoman who’d had enough.) And for those companies that had been successful, the incentive to move finally grows too great to resist. But they won’t learn, not until it gets much worse. Like all good oligarchs, they’re isolated in their ivory tower of safe seats and unaccountability (2).

Keep watch at the I-10 crossing into Arizona: pretty soon, a lot of those taillights you see  heading East are going to be on the back of Toyotas.

And they ain’t coming back.

Footnote:
(1) Something progressives should acquaint themselves with, sometime.
(2) And, before anyone else can say it, yes, that’s our fault as voters.

(Crossposted at Sister Toldjah)

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(Video) Rick Perry serves a heaping helping of red meat at CPAC

March 7, 2014

Texas Governor Perry spoke this morning at the Conservative Political Action Conference, and, well, got the crowd more wound up than any amount of coffee ever could. Enjoy:

smiley cheering

After his poor performance in the 2012 primary debates, there was some speculation that pain meds he had been taking to get him through back surgery had affected him. Whatever the reason, he looks to be well over it, now.  This was a great speech and he hit all the notes near and dear to a limited-government conservative’s heart. The Washington Examiner quotes the conclusion:

“My fellow conservatives, the future of this country is upon you, it belongs to you,” Perry roared. “You have the power to change America, you have the power to speak to our newest hopes in addition to our age-old dreams, you are the path to the future, a light on a distant shore and you represent the renewed hope that America can be great again!”

PS: I didn’t see a teleprompter, did you?

(Crossposted at Sister Toldjah)


And yet these people claim to be our intellectual and moral betters?

July 12, 2013

Like I said on Twitter: I’ve tried, I really have, but I fail to understand how bringing used tampons and jars filled with urine and feces to your state legislature can be considered a winning argument when you want to influence pending legislation.

Guess I’m just not as smart and politically sophisticated as I thought.


Quote of the Day: Doing business in Texas vs. California edition

April 1, 2013

An observation on why Texas might have more appeal to business owners, from John Harrington, owner of Shield Tactical, who recently relocated his company from Orange County, California, to Austin:

In Texas, he said, “it’s an iota of bureaucracy.” In California, “it’s like before you put up your range you have to be worried about whether the noise level is going to bother the 10-headed duckmouse.”

That made me laugh, but it’s also so very true. One company found the regulatory environment here so burdensome, it wrote California a “Dear John” letter.

Oh, and if you think “duckmouse” was a joke, consider that Sacramento would rather let Central Valley farms die of thirst than fight the EPA over a two-inch bait fish.

BTW, the first linked article is a good one on how Texas is working to encourage firearms manufacturers to move to Texas from states that are imposing more and more restrictions. Smart man, that Governor Perry.

via Moe Lane and Rick Wilson

(Crossposted at Sister Toldjah)