I knew the news was hot when my nephew, who works in the film industry in LA, texted me that Toyota was moving its headquarters to Dallas. No, I texted back, they are moving to Plano. It’s a big change, he said, and also thinks California taxes and cost of living may have played a role.
Whatever, we will soon be welcoming 4,000 newcomers to North Texas. A press release from the Japanese-based car manufacturer says the move said is “designed to better serve customers and position Toyota for sustainable, long-term growth.” According to the LA Times article James sent me, Torrance California will lose 3,000 employees to “macho” Texas and leave it’s 2 million square foot office complex in Torrance, well, empty.
Toyota will move its North American headquarters for manufacturing, sales and marketing, and corporate operations to a single, “state-of-the-art” campus in Plano over the next three years.
Auto industry analysts say Toyota feels it’s future is in the (union-light) south: it already builds the Camry and Avalon in Kentucky, the Corolla in Mississippi and the Tundra and Tacoma pickup trucks in San Antonio. It also has a big engine plant in Alabama. Maybe it wants to inundate the Lone Star state with more Priuses?
“They feel their future is in Dixie,” said James Rubenstein, an auto industry analyst and geography professor at Miami University in Oxford, Ohio. “They have figured out how to build vehicles in Dixie, but they haven’t figured out how to sell them there.”
Although the company is successful at selling passenger cars in the U.S., it has never gained the traction in the truck market it has hoped for, Rubenstein said. Toyota’s sales are also too heavily weighted to women, he added.
“Texas is the most male, macho state in the country,” Rubenstein said. “Texas is where they think they can learn more about what big truck buyers want in their vehicles.”
Just a few weeks ago, I was having a conversation with Ralph Randall and Dave Perry-Miller about autos, Lexus in particular, which is made by Toyota. We have been buying Lexus from Park Place now for oh, about 15 years. Ralph tells me that Lexus is becoming “an old people’s” car, a BUICK, the ES models in particular! I panicked and did some research — just as he is spot on with his real estate listings and sales, Ralph is spot on about this. The average Lexus buyer is 61, compared with 54 for Mercedes and 49 for BMW. (I know what my next car will be.) The Lexus IS draws buyers with an average age of 50, making it particularly critical for the company. So Toyota wants to be more macho, sells more trucks, and pump some youth-juice into the Lexus buyer, 20% of it’s profit. Yeah, go for it ! Come to Texas!
The new Toyota campus will unite approximately 4,000 employees from sales, marketing, engineering, manufacturing and finance who are now scattered around the country. About 2,000 employees at Toyota’s current headquarters in Torrance, Calif will be saying goodbye Surfer Girl. Another 2,000 will come in from Toyota’s engineering and manufacturing center in Erlanger, Ky and 1,000 employees land here from Toyota Financial Services, wherever that is.
The transition will begin this summer, with the company’s new, environmentally-sustainable headquarters set for completion in late 2016 or early 2017.
Developers say the automaker’s new home will be situated on a plot of undeveloped land owned by Plano-based JC Penney near the intersection of the Dallas North Tollway and the Sam Rayburn Tollway, southwest quadrant. Groundbreaking will begin on the environmentally-sustainable headquarters this fall.
“This is the most significant change we’ve made to our North American operations in the past 50 years, and we are excited for what the future holds,” said Toyota North America CEO Jim Lentz.
A U.C. Berkeley labor prof says that having your car headquarters in California is cool, and puts you close to all those social and cultural factors that set trends across the country. Has he never heard of Austin?
“As Toyota repositions itself as a Southern-based automaker, it could become less in touch with California consumers, and that could hurt sales, Shaiken said.
But Toyota might not think severing ties to the Golden State will have any negative effect on its business. “They already have California in its back pocket,” Rubenstein said. “Priuses are next to godliness in California.”
During the next few days, we will be asking several brokers what this move will mean for the North Texas market. Meantime, what do YOU think???