Toyota Restructures U.S. Marketing Arm

Q&A: Toyota's Lentz on what triggered the move, and the upheaval ahead

 

didn't samsung also move from cali to dallas?

 

Well I guess this means Texas will be a new PiP roll-out state.

 

Nope, staying in San Jose. Building a brand new site now (from its old site).

The story was Texas Gov Perry was close to signing contract to lure Samsung to Texas within days. Only to have San Jose Mayor and CA Gov Brown swooped in to give giant amount of incentives to convince Samsung to stay.

 

Yep. You're probably referring to Samsung breaks ground on futuristic Silicon Valley campus - CNET.

I was surprised to hear of (from http://www.nytimes.com/reuters/2014/04/27/business/27reuters-autos-toyota-motor-marketing.html?ref=business&_r=1&_ga=1.24357439.408167377.1398671277)

Of course I knew about their plants in KY, TX, etc.

I am a bit surprised about the move but at the same time, I can see it makes sense since the cost of living is likely far lower in TX than in So Cal. CA housing prices are high. We have state income taxes and a fairly high sales tax (8.75% in my county, IIRC). And yeah, it makes sense to be closer to their US factories.

Nissan's move that is referenced multiple times also kinda made sense for the same reasons. At the time, Nissan had a plant in Smyrna, TN (and it still produces tons of cars), so moving to TN made sense for the same reasons. Now Nissan has more manufacturing in that part of the US (e.g. Canton, MS).

More at Toyota moving US base from California to Texas - Yahoo Finance.

BTW, re: Bob's comments of locating people close to together and collaboration... FWIW, I find it much easier to collaborate w/folks nearby, esp. in the same building than w/those hundreds of miles away. Been there, done that. At least many of the folks I had to work with were in the same time zone. Problem is, I didn't necessarily know the interpersonal relationships and group politics of the team hundreds of miles away. I couldn't just pop in to someone's office and show them a prob I was hitting or have them come by to look at my machine(s) or easily tell when they were busy or not. I couldn't easily just overhear hallway conversation (thru which sometimes problems are solved) or discuss issues at lunch.

We've sometimes had misunderstanding between the folks hundreds of miles apart as to deliverables/commitments. We thought those other folks were supposed to do x and we didn't realize until it was almost too late that they couldn't get that done due to them being confused about our ask. If were all in the same building, I could've easily observed, asked or heard from others what those other folks were working on (and not working on), what their bandwidth was, etc.

I worked remotely for a year once. I definitely don't like it much and was worse than the above situation w/2 teams spreads across 2 locations. It was more work to have to set up a meeting time, using remote desktop sharing, etc.

At my current work, we have cubicles and folks are generally just in my building or the one connected. In some cases, I can just hold up my iPhone or iPad (I test software that runs on those) to another tester or dev and say "hey, have you seen this?". We talk about work-related stuff in the center area between our cubes, in the hallway, in/in between meetings and at lunch... Sometimes the devs talking amongst themselves helps us...

That'd be MUCH tougher if some of my team were in another state....

Obviously, California has quite a time zone difference w/those in the East Coast and there's the travel time back/forth.... So, TX at least lessens that.

 

Yes, but quite a few tech companies including startups are popping up in SF as well. Examples: Square and Twitter. While not a startup anymore, Jawbone | About Us is HQed in SF.

As I said in another post, I'd imagine that high cost of living (due to high housing costs + state income tax + relatively high sales tax) is also partly to blame.

 

I don't think much of the problem was distance in miles, but there were corporate cultural problems with Toyota's headquarters, as outlined in the LA times story. Perhaps they can change that easier with a move (it makes it easier to fire people and not call it firing), and if you are doing that get the f-out of LA.

I don't think California headquarters is hurting Tesla at all, but the corporate culture in silicon valley is different than LA, and Musk is very different than Jim Lentz. Akido Toyota replaced Wantenabe whose organization made many of the mistakes, maybe toyota USA could profit from removing Lentz and replacing him also. Ford and GM might do well to move their headquarters out of michigan We know tesla's assembly of batteries won't stay in california, but I think they can manage that remotely quite well.

 

The company is also closing its engineering and manufacturing office in Erlanger, Ky., but I don’t hear anyone bellyaching about Kentucky’s bad business climate.

 

HQ is moving to Plano, Texas, over the course of a few years, once the building is built.
After the move is complete, no one will be working at the current HQ in Torrance, CA.
Toyota hasn't announced what they will do with all that real estate in Torrance.

http://www.latimes.com/business/autos/la-fi-toyota-move-20140429,0,4511724.story#ixzz30MFCbuxo

 

rxlawdude said: "The company is also closing its engineering and manufacturing office in Erlanger, Ky., but I don’t hear anyone bellyaching about Kentucky’s bad business climate. "

Because the difference is night and day between the two states. I have lived in both states for a number of years and the difference between the two states tax structure is staggering. Additionally, KY is not known to tax the crap out of businesses and their employees but, CA has developed a well deserved reputation as a tax monster.

 

fyi TABC -> Toyota Long Beach
http://en.wikipedia.org/wiki/TABC,_Inc.
It has built parts for the NUMMI plant that was closed down. That production has moved to Texas and Mississippi.

Typical Toyota would be to move the truck specific parts left to its campus in San Antonio where they are used. The car parts that go to Mississippi, Canada, and Japan probably is such a tiny operation that it may stay in Long Beach. That way toyota can say they still manufacture in california (ya!) and avoid the bad PR while have already gutted almost all of the expenses.

From the Lentz interview

Translation - We have room for fewer employees at the new headquarters we are building in Texas than the number of employees that will move. This isn't just about cutting expenses, Toyota wants to cut head count. It takes fewer employees to listen to customers than to explain to customers why they should really want what toyota says is right. It takes fewer employees to work with safety regulators than to fight with them. According to LA times article these are problems that Toyota identified with the US corporate structure. There already was a change at the top and restructuring of Toyota Japan.
I really don't think the move has that much to do with physical distance, but cultural difference. If the management was listening to engineering properly they don't need to be in the same room, but its likely Management was dictating top down to engineering, and not listening to their input. When the higher ups are ignoring your phone calls and emails, it is good if you can actually grab them and tell them the problem. Alternatively you can fire those managers that followed the top down culture, but that is not Toyota. This is not just a problem at toyota, most of the car companies have top down, non-engineering driven management. I think this problem at GM is harder to solve than the one at Toyota.

 

Yes, and I've worked in Kentucky on consulting gigs. I'll take SoCal any day. And happily pay a bit more for the privilege. To each his own.

 

I'm not trying to debate or change your personal opinion, I'm simply trying to answer your question. If you want to pay more for what you see as a privilege, that's up to you. With that said, there is no way you can gain an understanding of a state by simply working as a consultant in that state for a short period. That would be like me saying I hate CA because I visited there and it sucked.

 

One has to wonder how employees with kids going to school will react. A large group of employees of the same approximate age not opting for the move could really screw up an organization.

 

Likewise, I wasn't trying to change anyone's mind about where it's best to live. Again "to each his/her own."

 

In the aerospace/defense industry, the "average" final transfer rate is only about 40% -- of those who were offered move packages -- and another 30% of those either 'quit' or move BACK after the manditory "stay" time, which can vary between one and three years.

 

Cool map of favorite states (hint TX wins as does AK):

Which U.S. states have the most pride?

 

People at or near the top of the food chain will move; too much vested and probably making really good money that would be hard to give-up. Other key people in various departments have been identified and asked to come over too. Everyone else, is disposable. To minimize disruption, they would want people to come over; no learning curve. However, behind closed doors with the consultants who advised them of relocation impact (short term, long term, and financial benefit), company is probably hoping/wanting people not to relocate. The company can hire new people for less than what the current people are getting, especially if the new hire is replacing a well tenured person (aka highly paid person). Another upside of new hires, is they will only know the new culture (as that is what Toyota USA is being allowed to do, be more independent from Japan, and have their own say). An old employees may have a harder time adjusting to the new culture, and possibly have bad habits.

Ugly unspoken reality of big corporations and multinationals.