Toyota announced today that it will establish new headquarters in Plano, Texas for its North American operations over the next three years, with the move to be completed by 2017. This new headquarters will unify Toyota’s current model of three separate headquarters for its North American manufacturing, sales and marketing, and corporate operations, which are located in Erlanger, KY; Torrance, CA; and New York City, NY respectively.
Just as when Nissan moved from California to Tennessee in 2006, reasoning behind this move is largely financial, as Toyota is sure to pay fewer taxes in Texas compared with California. Automotive News reports Toyota chose the location in part due to, "Zero state income tax, lower housing costs, and a relatively strong quality-of-life index." This move also means that Toyota’s headquarters will be closer to some of its southern production facilities in San Antonio, TX; Blue Springs, MS; and Huntsville, AL.
“With our major North American business affiliates and leaders together in one location for the first time, we will be better equipped to speed decision making, share best practices, and leverage the combined strength of our employees,” said Toyota North America chief Jim Lentz in a statement.
Groundbreaking for the new Toyota headquarters in Plano will take place this fall, with construction of this brand-new, environmentally-sustainable building estimated to take two years or more. Small groups of employees will start moving this summer to a temporary facility in Plano, with the majority of other workers to move when the building is completed in late 2016 or early 2017. The move will affect 4000 employees total, with 2000 of those coming from Toyota Motor Sales USA in Torrance, 1000 coming from Toyota Motor Engineering and Manufacturing North America in Kentucky, and a smaller group coming from Toyota Motor North America in New York. The last group to move, in 2017, will be 1000 employees from Toyota Financial Services in Torrance.
In order to smooth out the transition, Toyota will be making a $10 million dollar philanthropic commitment to the communities in California and Kentucky which will continue to fund non-profits and local community organizations for a five-year period starting in 2017. Automotive News reports that Toyota will offer relocation packages for impacted employees, but expects "some headcount attrition" from employees who don't want to move.
Along with the big move to Texas, Toyota will also expand the Toyota Technical Center near Ann Arbor, Michigan. Some employees from Toyota’s Kentucky operations will move to the Michigan facility to occupy a new building on the Technical Center campus, which will be accompanied by increased investment in engineering and product development at this location.