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Everybody’s (Still) Talkin': Toyota’s Move and Its Impact on North Texas

Dallas Mayor Mike Rawlings. Photo by Jeanne Prejean
Dallas Mayor Mike Rawlings. Photo by Jeanne Prejean

The Dallas Regional Chamber held a reception at its downtown offices yesterday for Dale Petroskey, its new president and CEO. But the thing everyone was talking about was Toyota’s announcement on Monday that it would move its national headquarters from Torrance, California, to a 70-acre “campus” in Plano. The chamber was instrumental in the coup for North Texas, which was said to be the result of a super-secret, months-long effort in which even the likes of billionaire Ray Hunt, who helped out, didn’t know the company’s identity. Indeed, one chamber official said, the news got out last Friday only after the son of one Toyota executive in California tweeted out something like, “Hell no, I’m not moving to Texas.”

Even yesterday, chamber principals said they couldn’t say much about the stealth effort, because they still were operating under a nondisclosure agreement. “Confidentiality was critical to the company,” said Sarah Carabias-Rush, a chamber vice president. “Their first and foremost concern was to protect the interests of the employees.” But why couldn’t she talk now, since the deal’s already been done? “It’s their message,” Carabias-Rush said. “We don’t want to take their message.” Okay. But, could she say whether the city of Dallas was seriously considered, given Toyota’s apparent preference for a sprawling, multi-acre campus? “There were multiple cities in the area that the company was looking at,” she replied. “I’m not at liberty to discuss which. There was more than one.”

While the relocation means up to 4,000 jobs may be headed to Plano, it’s unclear just how many Californians will be transferring, and how many positions might be available for North Texans to fill. When Nissan made a similar move from Los Angeles to Nashville, Tennessee, in 2006, Nissan said about 40 percent of its employees relocated. But others said 25 percent was more like it. At yesterday’s chamber reception, one PR pro said she’s already been approached by a local Toyota dealer to make a video to persuade the company’s wary employees in California that Texas is a great place to live.

Halfway across the room, meantime, one prominent businessman was steaming over Mayor Mike Rawlings’ assertion on a radio program that Dallas lost Toyota to Plano because of the poor quality of Dallas’ public schools. The comment was stupid, the businessman said, because it will be used as ammunition against Dallas by competing cities in future recruitment campaigns.

Asked about this at a charter-schools fundraiser later in the day, Rawlings was mostly unrepentant. “CEOs are smart, and they know how to get data. And, there’s a lot of reasons” for relocation decisions, Rawlings said. “But I will tell you, one factor every company I talk to is, they want to be next to their workforce. … Some of them power through it, like AT&T. Tonight I learned that Bank of America, 90 percent of their employees drive in from Collin County. When I was running Pizza Hut, when I left, they moved to Frisco, because they wanted to be next to their employees.

“But I met with [Toyota], they were very serious about Dallas, they were very serious about Plano, and I said, ‘It doesn’t matter, either one’s great. Okay? Just come to the Dallas area!’ ” Rawlings said. “This is a win for us, okay? … It’s a lot of factors, but being close to their workforce is extremely important.”

13 comments on “Everybody’s (Still) Talkin': Toyota’s Move and Its Impact on North Texas

  1. From an article posted in the WSJ last night:
    People familiar with the search for the new U.S. headquarters said each of the final locations considered—Atlanta, Charlotte., N.C., Denver and suburban Dallas—had factors the company required: a major airport, good quality of life, relative proximity to Toyota’s other U.S. operations, and not in the shadow of Detroit, where America’s Big Three auto makers are headquartered. Another factor: the site had to be near affordable housing and high-quality schools.

  2. Does the prominent businessman think if you close your eyes, a problem goes away? Getting the city’s public schools on track is as important to Dallas as building DFW Airport was 40 years ago. Difficult as it was to get Dallas and Fort Worth together, building that airport was easier than improving schools in our race- and class-obsessed city. That’s why Rawlings must use every opportunity to beat the drum for getting help to DISD. Re: Toyota to Plano, the mayor knows a defeat (for Dallas, not the region) is a terrible thing to waste.

  3. Just wondering what type of snark you are trying to throw down by putting the word “campus” in quotation marks …

  4. Is there space available anywhere in Dallas for a “40 acre campus”?
    To blame it on the schools just fits in with the Mayor’s home-rule campaign. I think anyone can see that affordable housing (which automatically means suburbs) and convenience to DFW (suburbs, slightly less) are probably the most important factors when deciding on Plano vs. Dallas. Moving from CA to TX was probably also mainly due to the central time zone and the free $40M of our tax money that won’t create a single new job but just move them from one place to another.
    I think a company’s current culture also comes into play: is it feasible to take a horizontally spread out company culture from LA and try to fit it into the vertical space of a Dallas hi-rise?
    Or convince a car company to move to downtown Dallas where everyone is encouraged to take mass transit?
    People also have to consider the main decision-makers in these scenarios: the upper level execs. Anyone who thinks much attention is paid to the effects on the majority of employees hasn’t lived in the reality of our business climate of today: hundreds or thousands of people’s lives are routinely turned upside down because a company’s higher ups want to live somewhere where they don’t have to pay income taxes on their millions or where they can live exclusively with other 1%-ers.

  5. Absolutely. I loved that they noticed all the BofA employees driving in from Collin Co., but didn’t recognize the same is true for AT&T.

  6. I disagree with you that Rawlings or other political leaders must lie or stretch the truth to justify their initiatives.

  7. About the taxes: I just did the income tax return for a friend of mine who lives in Brooklyn. She does not make millions, not even close to 6 figures. She earned a little over $10,000 more in 2013 than 2012 due to pay raise and bonus. Her heatlh insurance cost went up 29% (I guess the Obamacare cost reduction hasn’t kicked in yet) and increased taxes took 49% of her increase in income. She pays federal, state and city income taxes as well as sales tax and although she rents, her landlord has property tax. I’m sure California is similar.
    All employees will benefit financially by moving to Texas.

  8. When half the Dallas delegation is nudging and winking, is it any wonder Toyota went to Plano.
    But if you consider that just a few years ago Plano would have said ‘not in our neighborhoods’ to a Japanese company, it is a weird sort of progress.

    But the “Hell no, I’m not moving to Texas.” twit’s tweet says we still have a ways to go.

  9. Whenever I hear about these company relocations to Plano and similar northern suburbs, it is disappointing. I have always commuted from southern Dallas for jobs far north for years and in the majority of cases, I am the only professional in the office who lives in the southern sector. These developments make me sad for lower wage workers who spend the bulk of their income just trying to get to the jobs in the northern suburban communities.

  10. My complaint is that it is City of Dallas funds that support the Cof C — and we generally get bupkus for our money — as is the case here. Let them survive on their own and let Dallas use that money for DALLAS.

  11. The combination of no state income tax plus cheaper housing definitely makes it a financial benefit for employees to move to Texas from California. But finances aren’t the only consideration to many people. What do we get for those low taxes here in Texas? Texas ranks at the bottom compared to so many other states in health care, education, air quality, public services, and on and on. You get what you pay for, and Texas doesn’t pay very much.

    But we do like to throw our tax money at companies for no reason: the LA Times just reported that Toyota’s reasons for moving from CA had nothing to do with CA and all to do with consolidation, and the $40M of OUR TAX MONEY that was gifted to Toyota was a “minor factor” in their decision to move here.

    So Governor Perry spent $40M to steal jobs from another state, creating no new jobs in the process.

  12. Wait a minute–the Mayor of the City of Dallas just told a company interested in relocating to the area that “it doesn’t matter” whether a it chooses Plano or Dallas? How is that not the headline?

  13. Many of those in lower paid jobs are in that boat because of poor personal decisions and have done nothing to improve their opportunities. Ah, don’t say it unless you have lived it. I have and it took me about the time it took to make it through boot camp to make the commitment to get with the program. I took hard work and sacrifice, but I and my families have had a good life. I came from blue collar, I was blue collar, but I have no empathy to those who do nothing for themselves.