Toyota moving its U.S. base from California to Texas

04/28/2014 7:35 PM

04/28/2014 7:36 PM

Toyota is moving its U.S. headquarters from California to Texas in a bid to improve communication between units now spread over several states.

Charlotte was one of the four finalist cities for the headquarters, the Wall Street Journal reported, citing a source familiar with the deal.

Jeff Edge, who heads the Charlotte Chamber’s economic development team, said the chamber wasn’t notified the city was in the running for the Toyota project. Charlotte or state officials may have submitted information through a third party without knowing the company behind the code-named project, he said.

A spokesman for the N.C. Commerce Department said late Monday that he couldn’t immediately confirm whether the state had been aware Charlotte was a finalist. The department typically negotiates large incentives packages to draw out-of-state businesses, such as Chiquita Brands International and the failed attempt to lure a Boeing jet plant.

Denver and Atlanta also were finalists, the Journal said.

Toyota will break ground this year on a new environmentally friendly headquarters in Plano, Texas, about 25 miles north of Dallas. Small groups of employees will start moving to temporary office space there this year, but most will not move until late 2016 or early 2017 when a new headquarters is completed.

The new campus will bring together approximately 4,000 employees from sales, marketing, engineering, manufacturing and finance. That includes 2,000 employees at the current headquarters in Torrance, Calif.; 1,000 employees at Toyota’s engineering and manufacturing center in Erlanger, Ky.; and 1,000 employees at Toyota Financial Services.

Toyota also plans to expand its technical center near Ann Arbor, Mich., and move approximately 250 parts procurement positions there from Georgetown, Ky., where the Camry and Avalon sedans are made. That will free up space for approximately 300 production engineers to move from Erlanger to Georgetown.

Jim Lentz, Toyota’s CEO for North America, said the new headquarters will enable faster decision making. Lentz told The Associated Press that the move is one of the most significant changes in Toyota’s 57-year history in the U.S.

“We needed to be much more collaborative,” Lentz said.

Lentz said any employee who wants to move will be given a relocation package and retention bonus. The company is also offering to send employees and their spouses or partners to the new locations to look for new homes.

“Everything we are doing is encouraging people to go,” he said.

Toyota will continue to have about 2,300 employees in California and 8,200 employees in Kentucky after the moves are complete. The company will also maintain offices in New York and Washington. Plants in Mississippi, Texas and Indiana aren’t affected by the moves.

Toyota has had a presence in California since 1957, when it opened its first U.S. headquarters in a former Rambler dealership in Hollywood. The following year – Toyota’s first in the U.S. market – it sold 287 Toyopet Crown sedans and one Land Cruiser.

By 1975, Toyota had become the top import brand in the U.S. It opened its current U.S. headquarters in Torrance in 1982. Toyota sold 2.2 million cars and trucks in the U.S. last year.

Texas Gov. Rick Perry said the state offered Toyota $40 million in incentives from the taxpayer-funded Texas Enterprise Fund. Perry, who made two visits to California to lure Toyota, said Texas expects Toyota to invest $300 million in the new headquarters. Observer staff writers Eric Frazier and Ely Portillo contributed.

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