Toyota Motors Headquarters Move Means Bad News For California

Apr 29, 2014 11:48 AM EDT | Matt Mercuro

Toyota has announced it is moving its U.S. sales headquarters from southern California to Dallas, according to Reuters.

The move may make financial sense for the automaker, but to Torrance, CA, where Toyota's current headquarters is located, the announcement was devastating.

Torrance Mayor Frank Scotto said during a press conference outside city hall on April 28 that he was blindsided by the move.

Scotto said the first indication that Toyota wanted to move its headquarters to Plano, Texas didn't come until last Thursday, when he was told by Toyota to "expect a call" at around 9:45 a.m. on Monday, just before the company was to make its decision official.

"At first I thought it was about something else," Scotto said. "Even this morning, despite all the rumors this weekend, we thought it was only going to be part of Toyota moving - not just everything."

The decision, Scotto said, was "sad news" for California, and more importantly for Torrance, which has a population of 147,000, according to Reuters.

The two biggest employers in Torrance are Toyota and Honda, both of which have approximately 4,000 employees.

Losing Toyota will result in an annual loss of $1.2 million in tax revenue, Scotto said, who has been mayor since 2006. The emotional toll and economic impact will be much greater, according to Scotto.

Scotto's son-in-law works for Toyota, meaning the mayor's daughter and grandchildren will likely have to move to Texas.

Approximately five percent of the city's workforce is employed by Toyota, and in 2013, the city had an annual budget of $271 million, and $121 million of long-term debt.

Some locals understand that the move makes sense for Toyota however, like Frank Portillo, a co-owner of Los Chilaquiles Mexican Grill, which is located right next to the Toyota headquarters.

"The taxes are lower in Texas. There are fewer regulations. It's cheaper for a company there," said Portillo, according to Reuters. "Why wouldn't they leave California?" 

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