Jim Lentz exposes more details behind Toyota's move to Texas

Fri, 02 May 2014

Toyota's North American CEO Jim Lentz has already given us a rough idea of what prompted the company's surprise move to the Dallas suburb of Plano, TX from its longstanding headquarters in Torrance, CA. A new story from The Los Angeles Times, though, delivers even more detail from Lentz on the reasoning for the move, what other cities were considered and why the company's current host city wasn't even in the running.

Of course, one of the more popular reasons being bandied about includes the $40 million Texas was set to give the company for the move, as well as the state's generous tax rates. According to Lentz, though, the reason Toyota chose Plano over a group of finalists made up of Atlanta, Charlotte and Denver, was far simpler than that – it was about consolidating its marketing, sales, engineering and production teams in a region that's closer to the company's seat of manufacturing in the south.

"It doesn't make sense to have oversight of manufacturing 2,000 miles away from where the cars were made," Lentz told The Times. "Geography is the reason not to have our headquarters in California."

Geography isn't the only reason, though. Toyota is aiming for a more harmonious coming together of its far-flung and disparate divisions, which is something that couldn't be provided by moving everyone to Torrance. "We needed a neutral site," Lentz said, pointing out that moving engineering employees based in Kentucky to Torrance could give the impression that "sales was taking over."

Lentz said a conversation with Global President Akio Toyoda kick started the idea of moving, as the company sought to organize its North American business "for the next 50 years."

As for why Plano won, there are a number of reasons, one of which was the area's cost of living. According to The Times, the average house in the LA area costs $515,000 – in Dallas, it's less than half that, at $217,500. Toyota also considered the climate, access to direct flights to Japan (Plano is served by the sprawling Dallas/Fort Worth International Airport) and the quality of the area's schools as factors behind Plano's victory.

There's more on the aftermath of the move as it relates to the State of California over on The Los Angeles Times website. Hop over and take a look.

By Brandon Turkus