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April 29, 2014
Editorial: California's leaders shrug off Toyota move

Toyota.JPG(April 29 - By the Editorial Board)

Occidental Petroleum. Raytheon. Legalzoom. Waste Connections. Daegis and Revionics. And, this week, Toyota Motor Sales.

The list of major companies that have left California recently, or are planning on leaving soon and taking their jobs with them, is getting uncomfortably long. Toyota announced Monday it was moving 3,000 white-collar jobs from its sprawling campus in Torrance to a new, consolidated headquarters in Plano, Texas.

Add in two plants in the Los Angeles area - Huy Fong Foods of Sriracha sauce fame and Exide Technologies of arsenic and lead pollution infamy - that may be forced to leave the state without some relief from their particular emission problems, and it would seem the exodus has reached crisis proportions.

But tell that to the state's political leaders, who answered the Toyota announcement with a big "Oh, well." There's no show of concern. There's no fist-pounding or outrage, Sen. Ted Lieu excepted. Lieu's district includes the Toyota facility, and on Monday he put out a press release saying he is angry.

Torrance Mayor Frank Scotto is understandably alarmed that a major employer is evacuating such a vast part of its workforce from his city. He told reporters at a press conference Monday that there's nothing the city can do on its own to negotiate with Toyota. For that, he'll need the help of Sacramento.

And the response from the governor and his Office of Business and Economic Development, or GO-Biz? Silence.

Although Gov. Jerry Brown was in Southern California on Monday for the unveiling of the first electric buses to roll off the assembly line of the BYD Motors manufacturing plant in Lancaster, he didn't say anything about Toyota during his remarks, and didn't take questions from reporters.

A spokesman said Tuesday that by the time Toyota notified GO-Biz of its plans last week, the decision was final. Oh, well.

Brown's two main Republican rivals in the governor's race are making hay out of the Toyota move, saying it symbolizes a pervasive anti-business attitude in the Golden State. That's an overstatement, and doesn't take into account the many important new businesses created here by geniuses lured to the state by its excellent taxpayer-funded higher education institutions. Still, they aren't wrong that state and local governments often have been consciously and inadvertently hostile to many companies and industries.

Toyota officials declined to elaborate about the decision to move, other than it had nothing to do with the Lone Star State's high-intensity campaign to lure away businesses from California.

Texas Gov. Rick Perry didn't pursue the company, Jim Lentz, chief executive of Toyota of North America, told the Wall Street Journal. It wasn't about high taxes or too much regulation. Toyota's decision was a tactical one to consolidate operations. Texas is closer to the automaker's factories in the South.

Perhaps Perry didn't directly woo Toyota, but that state has made it so easy and lucrative for any company to relocate that no personal call is needed. Toyota is getting a $10,000 per job bounty.

California can't, and perhaps shouldn't, compete dollar-for-dollar with Texas. Businesses move for many reasons, only some of which are related to government incentives. Tesla Motors is considering locating a new $5 billion battery factory in another state, possibly Texas, despite the tens of millions in tax breaks California officials have lavished on it.

Tesla wouldn't be a success without California motorists, who have purchased a third of all its vehicles. California motorists have been an even bigger boon to Toyota. This state virtually built the Prius market with clean vehicle rebates, stickers to drive solo in carpool lanes and free parking at meters in some cities. That paid off for the company quite well. According to a Bloomberg News, the Prius was the best-selling vehicle in California in 2013 and 2012.

But California has plenty to offer beyond just handouts and tax breaks: a diverse, multicultural workforce, access to worldwide markets, the country's largest ports, amazing weather and an address known worldwide, just to name a few.

Maybe the governor is right that it is too late to stop the Toyota relocation. But on behalf of all Californians who worry about the next entry on the list, he should at least put up a fight.