Texas to Pay $10,000 for Every Toyota Job

Tuesday, 29 Apr 2014 07:04 AM

By Elliot Jager

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Toyota Motor Corp. will consolidate a major share of its North American operations in the Dallas suburb of Plano, Texas, The Wall Street Journal reported.

The Lone Star State will gain 4,000 jobs by spending $40 million in incentive money, or $10,000 per job, to lure the automaker.

California will cede 3,000 jobs to Texas, though Toyota will maintain a small presence in California, where it began U.S. operations in 1957. Kentucky will lose 1,000 Toyota workers to Texas. Some New York City-based purchasing employees will also head to Texas.

"We weren't pursued by Texas. It isn't a Texas versus California discussion," Toyota's top North American executive Jim Lentz said, according to the Journal.

Lentz wanted to bring Toyota's California operations closer to its factories in Texas, Kentucky, Indiana, and Mississippi. Its regional engineering center remains in Ann Arbor, Michigan.

Texas Gov. Rick Perry has traveled the country touting his state's business environment.

California has also lost some of its other car business, including Nissan Motor Co. to Tennessee and Honda Motor Co. to Ohio. Analysts say the regulatory burden and high-cost of doing business is a factor in any decision to leave the state. Gov. Jerry Brown said that dozens of companies have expanded in his state, and that "smart people figure out how to make it" in California.

The Toyota relocation is expected to be completed in 2017.

It is not clear how many California-based Toyota workers will agree to transfer. Lentz said Toyota would offer incentives to encourage current employees to relocate to Texas.

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