The Big Reason Toyota Is Moving 3,000 Jobs from California to Texas
Business + Economy

The Big Reason Toyota Is Moving 3,000 Jobs from California to Texas


Toyota North America made a big announcement in April 2014: It would move its corporate headquarters from Torrance, Calif., to Plano, Texas over a period of a few years.

The move was expected to save the company money, but Toyota said at the time that the relocation was about bringing together its different divisions to foster a more collaborative and efficient workplace, and putting the company closer to its manufacturing base in southern states.

There was another big factor, too: “It was really about affordable housing,” Albert Niemi, dean of the Southern Methodist University Cox School of Business said recently, according to the Dallas Business Journal. Niemi reportedly has inside knowledge of the move. “That’s what started the conversation. They had focus groups with their employees. Their people said, ‘We’re willing to move. We just want to live the American Dream.”

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Toyota, which has had its headquarters in California for more than 30 years, calculated that the cost of housing in the Dallas-Fort Worth area is about a third the cost of housing in Los Angeles County. The overall cost of living is about 30 percent cheaper, according to CNNMoney.

Despite the lure of low-cost housing, it’s unlikely that the majority of workers will follow Toyota to the new digs. CEO Jim Lentz has acknowledged that only about a quarter of employees typically stick with companies during a cross-country move, but implied that the total may be higher for Toyota.

Toyota’s $300 million Texas headquarters will open in 2017, and will eventually accommodate up to 5,000 workers.

While home prices may have been a main driver, the company was likely also motivated by Texas’s lower taxes and a regulatory climate that’s seen as much more favorable to business. The $40 million incentive offered by the state probably didn’t hurt either.