Toyota officials paid secret visit to Charlotte before sending headquarters, 4,000 jobs, to Texas
05/06/2014 7:52 PM
05/07/2014 4:27 AM
Toyota officials paid a secret visit to Charlotte earlier this year as they considered new sites for their corporate headquarters, but the East Coast location and a lack of direct flights to Japan apparently helped convince them to send their 4,000 jobs to Texas instead.
After a search that started with about 100 locations, the automaker announced last week that it was consolidating manufacturing, sales, marketing and operations headquarters into one campus in the Dallas suburb of Plano.
N.C. Commerce Secretary Sharon Decker told The Observer Tuesday that Charlotte finished second to Texas in pursuit of what state officials called “Project One.”
“We were the last two considered,” she said, referring to Charlotte and Plano. “I think that speaks very well of North Carolina and Charlotte.”
Decker and Charlotte economic-development leaders said the world’s largest automaker never identified itself to North Carolina officials, even when its emissaries met with state and local representatives.
Toyota officials won’t say why. They declined to comment on the merits of specific locations considered during the process.
In explaining the company’s rationale for choosing a site, one official said Toyota wanted a “neutral location” with no existing major Toyota presence.
Mike Michels, a vice president with Toyota Motor Sales U.S.A., said the company weighed economic considerations, geography, climate, the cost of living and the education systems, among other things.
“With manufacturing locations in many U.S. states, Canada and Mexico, we chose a location that better supports our diverse geographic footprint, in a time zone that allows us to communicate better with most of our operations, and has direct flights to all our North American operations and Japan,” he wrote Tuesday in an email to the Observer.
There currently are no nonstop flights between Charlotte and Asia. While US Airways didn’t operate service to Asia, its merger partner American Airlines has a major trans-Pacific presence.
“It would be good to have,” said David Swenson, a senior vice president with the Charlotte Regional Partnership, which markets the region to companies. “There’s over 90 Japanese-owned companies in the region.”
An American spokeswoman said there aren’t any plans right now to begin nonstop service from Charlotte to Asia. The airline is expanding Asian service at its biggest hub, Dallas/Fort Worth, with two new flights to China starting next month.
Jeff Edge, senior vice president for economic development at the Charlotte Chamber, said West Coast firms are often reluctant to move to the other side of the country because long-distance moves “can create a sense of apprehension for personnel,” he said.
To win the project, Texas offered Toyota $40 million in incentives, according to The Wall Street Journal.
Decker, the commerce secretary, said she couldn’t recall the specifics of North Carolina’s incentives package. The Observer has filed a public records request with her department seeking the details.
She and local officials were left in the odd position of explaining how they lost a company they never officially knew they were fighting for.
Toyota officials used corporate real estate consulting firm Jones Lang LaSalle as an intermediary on the site selection project.
Local officials say the consultants initiated inquiries about a Charlotte relocation, but never identified Toyota as the subject of Project One.
Swenson said about a half-dozen people from Toyota and the consulting firm met with the Charlotte Regional Partnership and the Chamber at the partnership’s offices in the NASCAR Plaza building on South Caldwell Street.
He couldn’t recall the date, other than that it was a couple of months ago.
Swenson said it isn’t uncommon for companies to visit cities incognito.
“There’s a lot at stake in terms of the corporate decision and the impact,” he said. “You have families you’re dealing with in the employee base. If they’re a public company and the decision gets out in the media, how does that impact corporate operations?”
But Edge said companies on major relocation projects almost always identify themselves to finalist cities to make sure locals want their company and are making their best offer.
“I find that very strange,” he said of Toyota’s secrecy with Charlotte. “The only reason I can see for not (disclosing) their identity to their ‘finalist’ communities is that they had already made a decision and were negotiating with the winner but did not want to risk word leaking out” from other finalists.
Decker said she doesn’t yet know all the details of why Toyota passed on Charlotte, but plans to get a debriefing on it.
“It’s never just one thing,” she said. “These decisions are very complex.”
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