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Our article on a prospective Toyota Motor Sales move to Texas now has some support from the Wall Street Journal.
The WSJ doesn’t know much more than we do but they have this:
The company confirmed that it was restructuring its marketing organization. It said employees “whose positions are significantly different in the new organization have been provided with several options, including applying for opportunities within the new marketing organization or in other departments at TMS or Toyota Financial Services.”
Toyota said it was also offering redundancy packages to employees. The reorganization is set to take effect Thursday, the company said.
More news as it’s available.
35 Comments on “WSJ: We’re Right...”
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“But contrary to conservative lore, there has been no millionaires’ march to Texas or other states with no income tax. In fact, since 2005 California has experienced a net in-migration of households earning more than $200,000, according to the U.S. Census’s American Community Survey.”
http://online.wsj.com/news/articles/SB10001424127887324338604578326402863024028
Will Design, Tech Center in SV, Product Planning also move?
@elimgarak
I wouldn’t expect the rich to leave San California – if you’ve ever heard Michael Savage talk about San Francisco, you know that it’s quite a nice place, except for the people. There’s still the charm that is California as a quite blessed land, all things considered.
What has been reported for a very long time is a gutting of the middle – when you’ve got $200,000 and you can live like you make $100,000 in Texas or Georgia or Connecticut, that’s still an awful nice life. When you make $75,000 and you’re living like you make $30,000 somewhere else, that’s the squeeze. If you’re a fireman, and you make $80,000, but you have to live three hours out from where you work, that’s untenable – might as well move to Reno.
Carrol Shelby totally agreed with you.
I wasn’t aware that any firefighters, volunteer or otherwise, had to commute to work. I thought they all lived at the firehouse and slid down the pole for fun.
The More You Know, I guess.
Firefighters may live at the station for days at a time, but where do their spouses and children live?
I know one fireman whose station is in Frisco somewhere. My wife was in a class with his wife and they are friends. He used to live in Antioch, then bought a house in West Sacramento. But commute by I-80 was too much for him, and they sold that house and returned to either Antioch or Brentwood. One good thing – he keeps odd hours and thus commutes against the flow most of the time.
MrGreenMan is correct. People who make over $200,000 have been moving TO California. It’s the middle class that is moving away from the state.
My wife’s cousin took a job with Apple and moved from Pittsburgh to Cupertino, California. He told us what he pays in rent for a duplex with two bedrooms. Given his rent, he HAS to make good money. Otherwise, the move made no financial sense. But he is single and childless, so he isn’t looking for a three-bedroom, single-family house on a separate lot. Given his expenses, however, I’m not so sure that his salary is translating into a higher standard of living than people who make less money in other states, unless one counts the California weather and scenery as bonuses.
The move isn’t exactly a precedent for a large automaker. Nissan made the move from California to Tennessee back in ’06-’07. Lower costs are lower costs.
I’m no millionaire, but all else being equal I effectively netted a 3% raise ditching Northern California for Washington state last year owing to no income tax here. Sales tax is a wash and property taxes are nearly equivalent as well.
The clean air, plentiful water and lower cost of living are just welcome side effects.
It’s that cost of living thing for people in the middle that makes leaving California make so much more sense. I did the opposite: I moved back East from living in the desert for a while. The dollar amount on my 1040 went up. The standard of living went down. Somehow, I could no longer eat out every single meal, pay the rent, put premium in the car, and still sock away a pile for savings like I could when I had to contend with road runners and geckos every morning.
I left Silicon Valley in 99 for metro Boston. Not cheap, but much cheaper (if you choose your location wisely). One thing that is often overlooked when comparing the cost of the “average” house, is how large/nice the average house is. In CA the average house is significantly below average in size and land elsewhere, including Boston/Fairfield County/DC and other expensive places.
Washington State is excellent. I would rather live in the Seattle area than SF by choice regardless of the economics for the most part.
Conservatives are not enamored with Seattle all that much either though.
In the other thread I agree that some posters such as ‘u mad scientist’ were going over the top, but a more balanced view on the move is prudent.
Though both temperate the weather in CA is much better. North of the bay you get a Seattle summer for 6+ months instead of 2 and the drive through the vineyards beats forestry roads.
Someone has to take a hit and it won’t be the leadership of Toyota that put in the cost cutting measures in engineering and parts supply.
That Tercel was one crappy ride. I remember it could barely hit 65 mph.
Oh no. They could do 80. I had a ticket said so in no uncertain terms. The state of New Jersey was not amused.
And that was with a stock 10 y/o clogged up variable-venturi carb.
I think this is a mistake. Southern California is the center of the auto world. Auto trends are established in LA/OC. We saw Detroit ignore auto trends in SoCal, and they never recovered. Toyota moving sales away from SoCal may prove a huge mistake.
GM has known that Detroit is the center of the auto world for decades. One could argue that Shanghai or Shenzhen is starting to supplant SoCal as the industry trendsetter, as horrible as that may be.
That is possible.
California in general used to set trends for the country, but times change.
The move is to try and increase their appeal to the biggest truck market in the US – building an assembly plant has not paid off as much as they hoped, so now they double down and move more business/employees to Texas.
Wait ’till those Texas transplants get a load of the property taxes…
There’s no personal income tax in Texas, and the overall cost of living is much lower. So any higher property taxes probably won’t bother them that much – if property taxes are, in fact, lower in California than in Texas.
I’ve never heard that California property taxes are particularly low when compared to other states. The exception is for people who lived in their present house when Proposition 13 was passed in 1978, and haven’t moved since that time. Most of those people are probably retired by this point.
There are actually a lot of property tax exemptions in California, which may explain some of their budget problems.
High property tax * low cost of property =~ Low property tax * high cost of property, IOW a wash cost-of-livingwise.
Add in income tax (sales tax is mostly a wash) and CA wins the high-tax race by a country mile.
…and Texas also wins the low-government services / overpriced privatized services race by a country mile.
You get what you pay for.
When I visited California, I was shocked at the amount of roadside litter I saw along various California highways. Texas did not have that problem. The roads certainly weren’t better in California – it was quite the opposite.
Several friends have moved from Pennsylvania to Texas. I have not heard any dissatisfaction about the level of government services – local or state – in Texas at this point.
I have traveled pretty extensively in Dallas and Houston, and neither city seemed especially ‘clean’ to me.
Maybe things have changed in California, but the amount of roadside trash I saw in the Bay Area was pretty shocking. You’d have to go to some of the really poor, industrial areas of Harrisburg or Philadelphia to see that level of garbage tossed out on to street.
Downtown Dallas seemed as clean as downtown San Francisco or Los Angeles to me. The same with Austin and San Antonio.
California diverts a lot of VLF to general fund. Last time I checked, they only used 5% of that for highways and another 5% for CHP. If they weren’t stealing money from automobile owners and users, the would’ve had best highways.
From one urban sprawl to another. Much hotter in the summer and colder in the winter. I’m sure the transplants will watch their salaries creep to the local level. But they will be able to buy a lot more house or own more of their house in Plano. I’d rather live in Plano Illinois. But that’s just me.
No state income taxes, incentives, Texas is bid’ness friendly. They’ll love it here.
* In TX there’s a Gross Receipts Tax on businesses (0.5-1% IIRC), though hopefully it will go away next session if fracking and other energy tax revenues come in nice and juicy.
…until they figure out what it feels like to sweat through your clothes every day from May to September.
Not trashing Texas, but the Cali lifestyle comes with benefits, and that’s a big reason why it costs more to live there. Plus, land comes more at a premium in California, while Texas has loads of undeveloped country to develop onto.
Taxation only explains part of the difference in price.
Steve Brown at The Dallas Morning News actually practiced some journalism on the Toyota story and filled in a lot of details. He made some phone calls and determined that Toyota is going to build a huge office complex on the order of 1 million sqft. in the Legacy West business park at the SW corner of TX-121 and the Dallas North Tollway. That appears to be a larger move than just the sales organization.
http://www.dallasnews.com/business/autos-latest-news/20140427-toyota-to-move-u.s.-headquarters-to-plano-sources-say.ece
I know this is the car enthusiast equivalent of coming out on-stage at a southern baptist revival, but seeing the picture at the top makes me really miss my old Tercel.