Toyota said Monday it is moving its North American headquarters from Torrance to Texas, impacting thousands of employees.
Torrance Mayor Frank Scotto said he was taken off guard by Toyota’s decision.
“We thought that it was just going to be part of Toyota, not everything,” Scotto said, adding his son-in-law works at Toyota, and he’s concerned about what will happen next.
Toyota said in a press release that the relocation of its headquarters to Plano, Texas, will “better serve customers and position Toyota for sustainable, long-term growth.”
4,000 employees affected nationwide
The company said about 4,000 employees nationwide — from headquarters in Kentucky, New York and Torrance — will be affected by the move.
At Toyota Motor U.S.A., Inc., in Torrance, 2,000 employees will be affected and could start moving in small groups this summer. The company said the majority of employees would make the move after the Plano facility is built in late 2016 or early 2017.
About 1,000 Torrance employees at Toyota Financial Services will be affected by the move to Texas in 2017, Toyota said in a press release.
Toyota’s decision comes as other automakers have moved jobs from Southern California out of state. In 2005, Nissan said it would move its U.S. headquarters and roughly 1,300 jobs from Gardena to Tennessee.
It's unclear how many Toyota employees in Torrance will agree to move to Texas. In Nissan’s case, many employees chose not to move with the company to Tennessee. Some Nissan employees that did relocate to the South ended up moving back to California.
Scotto said that he didn't believe there was anything Torrance could have done to dissuade the car company, even if officials had known earlier.
The overarching issue, he said, was reforms needed at the state level to retain large businesses.
"We could offer up a lot of things, but we recognize that the deal they have is something that would take the state of California to match," he said.
Scotto, however, said the city was actively searching for a new company to occupy the large site and added that the city already has a short list of automotive firms that it will court.
The departure would take $1.2 million from the city budget in business license fees, sales taxes, utilities and other taxes, he said. Torrance hopes to have plugged that hole by the time Toyota pulls out in three years.
Texas gains jobs
Torrance’s loss is Texas’ gain. Toyota will invest more than $300 million in capital investment and in return, Texas has given the company $40 million in financial incentives.
“Toyota understands that Texas’ employer-friendly combination of low-taxes, fair courts, smart regulations and world-class workforce can help businesses of any size succeed and thrive,” said Texas Governor Rick Perry in a press release.
After the move, Toyota will still have 2,300 jobs in California, but not in Torrance, city officials said.
Donna Duperron, CEO of the Torrance Chamber of Commerce, said she knows at least 20 people personally who work at Toyota and will be affected by the move. "You look at it, and in one way for me it was emotional at first, ... and then you think, 'What could we have done as a community or as a state to keep them here?'"
Toyota was a strong contributor to the city's adopt-a-school program and also recently built a half-million-dollar sports complex and park just down the street from City Hall. Many of the company's managers and leadership sat on local boards for arts and theater and education, Duperron said.
Residents were also dismayed by the news. "When I opened the paper today, I just went, 'Oh, my gosh.' It just blew me away," said Janet Payne, 72, a 40-year resident. "It's as if they've been here forever."
This story has been updated.