Once again California is going to have a massive firm leaving the State. Toyota, based in Torrance, near Los Angeles, is taking 5,000 jobs to Plano, a suburb of Dallas. Each employee will get a minimum of a 10% raise, and the company will not add a dime to payroll—that is the California income tax on the employees. I heard about this on Friday—it will announced today, Monday. What will Guv Brown, our confused Governor say about this? Could it be high taxes, the State run by the Global Warming canard, failed pension systems and government schools?
California is in a Depression and little can be done until we get balance back to honest government and policies that create jobs instead of killing them.
“Toyota employed 4,900 workers as of 2011, when the last available data was released, placing it in the top 40 among area employers at the time. The company has also been exceptionally active in terms of supporting the surrounding communities, regularly sponsoring and hosting prominent events. For all these reasons, the loss of Toyota is one that will cut deep locally. It’s unclear whether the move will mean the elimination of all LA-based positions, but it’s clear that the move is more than a symbolic one and that the company will no longer be a tentpole corporation in the area.
But despite the sting, this move should come as little surprise to anyone who’s been paying attention. California hasn’t had a balanced budget, yet alone an economic surplus, seemingly since the last dinosaurs went extinct. As a result, the state has continued to raise taxes, while at the same time failing to deliver quality services to its citizens.
Note the writer of the article is not subtle by telling the reads that we do not have a balanced budget—Gov Brown is way too confused to understand I guess.
BREAKING: Sources say Toyota fleeing CA, taking 5,000 jobs to more business-friendly Texas
By Michael Carney, Pando Daily, 4/27/14
California’s inhospitable tax policies may have struck again, this time costing Los Angeles one of its largest employers. According to multiple sources close to the situation, Toyota will be relocating its US headquarters from the LA suburb of Torrance to Plano, Texas.
The company has yet to notify its employees of the news, but is expected to do so Monday, followed by a public announcement. While it’s unlikely that Toyota, which is ranked 8th on Fortune’s Global 500, will directly cite taxes as the reason for its relocation, it should come as little surprise that the financial burden of operating in California – both on the corporation and its employees personally – played a major role.
A number of early stage entrepreneurs, including Pando contributor Bryan Goldberg, have discussed publicly their decisions to start companies outside of California. Now, it appears that frustration has moved its way up the economic food chain.
It wouldn’t be the first time. Nissan made a similar exodus in 2006, finding a more welcoming home for its US headquarters in Tennessee, where local and state governments rolled out the tax incentive red carpet. Honda too has shifted its headquarters from Carson, CA to Marysville, Ohio, but retains a dwindling LA operation. Persistent rumors, however, suggest that it may eventually shutter its California presence entirely.
Toyota employed 4,900 workers as of 2011, when the last available data was released, placing it in the top 40 among area employers at the time. The company has also been exceptionally active in terms of supporting the surrounding communities, regularly sponsoring and hosting prominent events. For all these reasons, the loss of Toyota is one that will cut deep locally. It’s unclear whether the move will mean the elimination of all LA-based positions, but it’s clear that the move is more than a symbolic one and that the company will no longer be a tentpole corporation in the area.
But despite the sting, this move should come as little surprise to anyone who’s been paying attention. California hasn’t had a balanced budget, yet alone an economic surplus, seemingly since the last dinosaurs went extinct. As a result, the state has continued to raise taxes, while at the same time failing to deliver quality services to its citizens.
Sure we may have the weather and the beaches, but there’s a compelling argument to be made that there’s a higher quality of life (relative to the cost) available elsewhere. Valley boosters would argue the talent and the ecosystem make running a tech company elsewhere unthinkable. But Toyota’s near-5,000 employees will soon be testing whether the Texas grass really is greener.
Toyota did not return calls requesting comment on this news (~2 hours prior to publication). We will update this post with additional information if and when it becomes available.
Property Tax in CA is 1.25% vs. in TX it ranges from 2-3.25%, but the cost of a home in TX is about 50-75% cheaper, Utilities and gas prices are a lot less. Overall, the cost of living is a lot cheaper.
April 29, 2014 at 2:05 pm
2.02% of home value in Texas is probably a smaller dollar amount than .88% in California. I like the Golden State but the houses are way too expensive.
April 29, 2014 at 8:51 am
Honda is in Torrance, too, NOT Carson! In fact, Honda's headquarters is less than a mile south and west from Toyota and directly across the street from Old Torrance. Location aside, it won't surprise this long time Honda employee if Honda makes the same announcement in the near future, Iwamura's rather disingenuous denial notwithstanding.
BTW, memo to Toyota employees. . .you won't pay income tax, but just wait until you see your property tax bill - 2.02% of home value compared to .88% in California. Or your sales taxes - 8.25% in Plano and more items are taxable, including some services, than in California. Oh, and there's no State Disability Insurance, no Workman's Compensation Insurance, and all Toyota employees of child-bearing age, there's no paid Family leave.
So yeah, Texas is a GREAT deal for employers, but employees, unless they are quite wealthy, get thrown under the bus. So don't go spending that 10% savings quit yet. . .
April 28, 2014 at 6:12 pm
you are right about property tax RATE. But, think about this, that $200,000 home in Plano would be $600,000 in Torrance. When I moved from California to Texas, yes, my property taxes went up but the house was so cheap that I bought it for the cash I made on selling my house in California. Houses in Texas are about 1/3 the price of what they are in California.
And, as far as the other things, yes there is disability insurance and workman's comp in Texas. You just have to prove that you are actually disabled or hurt on the job. Everything else is way cheaper. For example, my electric rates dropped in half moving to Texas. Same for water and car insurance. Food is cheaper, too. And that 10% takehome increase is really equal to about 15% in pay raises (cause it would take a 15% pay raise to get you 10% more in takehome).
All in all, I have lived in Texas since 2006 and it is a great economic deal. Now, if you depend on state benefits, maybe not. So, if you need lots of state help, stay in California.
April 30, 2014 at 10:46 am
Not a real pay hike in terms of gross pay, but since Texas has no income tax it is ~10% in net pay.
April 28, 2014 at 3:14 pm
i know of several ex nissan employees who work now at toyota, not to sure if they will follow the Co to Texas; if the 10% pay hike is real, maybe… Fkin Kalifornia…
April 28, 2014 at 1:49 pm