Toyota’s steady move out of the “worst state” in which to do business continues.
Toyota announced last month that it would relocate more jobs and more vehicle parts production out of the State of California, shifting Tacoma and Tundra parts production out of Long Beach, California to San Antonio, Texas. The move prompted one California lawmaker to say “It sort of feels like they betrayed us by moving those jobs to Texas.” Toyota has not responded directly but did say in an e-mail “The decision to shift production to San Antonio was based on a number of key business drivers related to our long-term sustainability.”
Toyota last year joined the long list of companies that have become economic refugees fleeing California. Coincidentally, or perhaps not, this week California was again named the “Worst State for Business” in a poll of CEOs. This is the 11th straight year that California has earned that dubious title.
Toyota, the world’s most profitable automaker, and also the U.S. market’s largest retail automaker, is relocating its headquarters to Plano Texas from California. Corporate and personal income taxes and the cost of living are among the country’s highest in California, and by contrast, some of the lowest taxes and costs of living are in Texas.
Toyota has long sought to exit the Golden State. Toyota traded away its Fremont, California car plant to Tesla for shares of the company at the ideal time. The value of Toyota’s $50 million in shares of Tesla skyrocketed during the time the Toyota held the stock. Tesla needed production and Tesla liked the plant’s turnkey status and proximity to its Silicon Valley roots. Toyota had already given up trying to make cars profitably in the Fremont plant. Although the Fremont plant worked out well for Tesla when it needed production capability quickly and a location close to its design team, when Tesla built its new gigaplant to make batteries, it chose nearby Nevada, not California.