Toyota's Decision: A Major Loss for California

by Gary Toebben

Toyota is moving 3,000 high-paying jobs from California to Texas over the next three years. Thousands of L.A. County families will be directly impacted by this job loss and many other support businesses and their employees will also feel the pain. The ripple effect will go on and on, including hundreds of charities and nonprofit organizations that Toyota Motor Sales, U.S.A. has generously supported.

Why is this happening? In 1957, when Toyota first established roots in Southern California, we were a strategic location for a business that manufactured all of its products in Japan and wanted a gateway to the United States. Today, Toyota manufactures 75 percent of the cars it sells in the U.S. at plants scattered throughout the Midwest and South. While California still has great assets, many other business factors like tax rates, labor laws, business regulations, public education and the cost of housing have changed significantly during the past 57 years. Add to that new technology improvements that allow airplanes to fly directly from Japan to interior states like Texas and you have a new set of competitors for California. 

These new realities don’t diminish the assets that California enjoys, but what once was an easy decision to locate in our state or expand your business here, now becomes a cost/benefit analysis that includes dozens of domestic and international locations that would not have been considered in the past. And while our weather is still great, dollars increasingly top weather in the very competitive global marketplace that all companies operate within. 

Texas has a simple and straight forward message for businesses: We love business and the jobs you create. And you can count on us to not constantly meddle with the laws that regulate your business and your cost of doing business.

I recently heard a story about a former California legislator who stood up on the house floor and said, “I don’t understand why people think I am unfriendly to business. They are wrong. I have great faith in business that no matter how much we regulate or tax them, they will always find a way to make a profit.”

That state legislator was partially right. The business entrepreneurial spirit will find a way to succeed and to create jobs. The challenge for California is that those entrepreneurial businesses will create those new jobs elsewhere unless we show them more love and support to grow. 

And that's The Business Perspective.