Monday, May 05, 2014

A Little Bit On Toyota Leaving Los Angeles

Toyota has decided to take it's sales headquarters out of Torrance (Los Angeles) and move to Texas. All of the news articles I've seen focus on the loss of jobs.
The two biggest employers in Torrance, which has a population of 147,000 according to city figures, are Toyota and Honda. Both have about 4,000 employees. Losing Toyota will mean an annual loss of $1.2 million in tax revenue, Scotto said, but the emotional toll and wider economic impact will be much bigger, he said.
Pondering it over the last few days, I started to think about what must have gone into that corporate decision. Relocation costs, loss of productivity during the move, environmental clean up costs on the deserted site and, most of all, not knowing which employees would move with them.

Toyota was willing not just to spend money, but disrupt their sales headquarters workforce, assuming a significant number of people quit either through resignations or early retirements.

The business climate in LA must be pretty awful for that to look attractive.


tom said...

That $1.2M sounds very low. Over 4,000 employees that's 3,000 each. OK, they're not paying that in income tax to the city, but if they pay, on average, $1,000 in property taxes, that's a $4M impact. Even if everybody who moves out is replaced, there's still going to be a near-term hit to the city taxes. There are lots of variables, but this isn't about a piddling $1.2M.

As you note, there must be a whole lot more going on than $3,000 a person.

Mostly Nothing said...

I figure that I would have to be paid at least three times my current salary to live out there.

No chance.

Foxfier said...

Maybe that's part of it-- they're having trouble finding enough people who are willing to fill the positions.

tom said...

Yes, there's the pay thing, but if they have a problem with my firearms, I have a problem with them. Call it a trust issue ;-)