Is Toyota ready to walk out on California?
Rumors have been swirling for some time that the giant maker, now facing increased pressures to curb costs, may be ready to move at least some of its U.S. headquarter operations out of the Golden State. Some jobs may be heading to either Michigan or Kentucky.
Those two states would make sense for a move. Kentucky is ground zero for Toyota’s core “transplant” assembly operations, while Michigan – though home to its Big Three rivals – has become a critical technical center for the Japanese maker. Toyota recently opened a major engineering facility in the fringe western suburbs of Detroit that included a new test track.
If a move does take place, it wouldn’t be the first. Nissan moved its entire U.S. headquarters operations out of California, several years ago, and last year opened up a permanent new facility outside Nashville, Tennessee.
The financial impact of such a move could be significant, especially for budget-constrained California. Though the state has been seeing a continuing influx of migrants, it has been struggling to hang onto jobs. That’s particularly true in the automotive sector. Not only did Nissan move, but Toyota recently announced that it would close the NUMMI assembly plant, near San Francisco, that it had been operating as part of a joint venture with General Motors for nearly a quarter century. GM pulled out of the partnership in the wake of its bankruptcy.