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Toyota’s move to TX to boost local economy by more than $7.2B

Plano, Texas scored the role as home to Toyota Motor Corporation’s headquarters and will reap considerable rewards. When many corporations look to merge facilities, they often migrate to an existing location rather than starting fresh, but Toyota decided to do just that.

Last April when the Texas HQ project was announced, Toyota officials said, “We wanted to seek a neutral location where there wasn’t an existing affiliate, so we could build the company and culture from the ground up. If others were relocated to an existing location, then there would be winners and losers.” That philosophy may apply to employees, but when it comes to the cities that are losing their Toyota facilities, there are definite losses coming down the pipeline and Plano is the clear winner.

Torrance, California, current home to Toyota’s HQ, will be hard hit when the automaker picks up stakes. This is not good news for the labor market in the West Coast state nor the state’s revenue coffers. But you can’t blame Toyota for migrating away from the state. For ten years running, California has been dubbed the “Worst State for Business” by Chief Executive Magazine mostly due to its inhospitable tax and regulatory climate. The publication has called California “the ninth circle of business hell.”

Even Silicon Valley, the breeding ground for innovation, takes most of its start-ups out of state for development because of “excessive state taxes and stringent regulations.” In stark contrast, Texas has topped the list of best places to do business for as many years as California has scraped the bottom of the barrel. Luring the Toyota HQ to the Lone Star State is yet another feather in its 10-gallon hat. Texas ranks high for business-friendly taxes with no state income tax, workforce quality and living environment.

To make North Dallas even friendlier to Toyota, Texas just opened the North Tarrant Express, a 13-mile super highway to speed commuters toward the new Plano facility. The state fast-tracked the interstate and had it built and ready for business in less than five years when most projects of this scope can take triple that time. For relocating Toyota employees and those hired on locally, this is yet another boon on top of the more than $7 billion of economic activity Toyota’s HQ move is anticipated to bring to the region.

Along with its Plano HQ build, Toyota has launched a new website, One Toyota Family, to serve as a master guide for its employees. The site offers a look at its three destination cities – Plano, TX, Ann Arbor, MI and Lexington, KY – and what relocating employees can expect in these communities. There are also resources to help those moving to the Dallas area to find housing and find out about relocation assistance for the transfer.

While Toyota will retain a couple of thousand employees at its design studio in Newport Beach, CA, The two million square foot HQ property in Torrance, CA will be shuttered entirely. Many are hoping this will be a wake-up call for California lawmakers – its second one in a decade. In 2005, Nissan packed its corporate bags and fled to Tennessee to set up shop in Nashville. Toyota broke ground on a 100 acre campus in Plano in late January and will move into their new digs late next year. California’s loss is Texas’ gain – in a big way.

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