TORRANCE, Calif. (AP) -- Toyota's announcement Monday that it is moving its U.S. headquarters from Torrance to Texas comes as a major blow not just to this manicured city south of Los Angeles but also to the larger region, which has watched a number of major employers walk away in recent years.
Torrance Mayor Frank Scotto reacted with frustration at the latest news and said, as a city of 100,000, Torrance could not compete with the economic incentives and favorable business climate in Texas.
About 3,000 jobs will move to Texas, leaving 2,300 in Southern California. The shift will leave a $1.2 million hole in the city's budget when it is completed in 2017 unless the city finds someone to occupy 101 acres of land that Toyota now uses, Scotto said. He said his own son-in-law works as a chief auditor for Toyota.
“There's so many things that have to be done in the state of California,” Scotto said after a news conference in front of City Hall. “It's going to take a change in attitude, and you know what, we need to change that attitude today, because 10 years from now when we look back and say, `Geez, we should have been doing something,' it's going to be way too late.”
Toyota is just the latest in a chain of automotive and manufacturing companies to leave Southern California, said Nick Vyas, director for the Center for Global Supply Chain Management at the University of Southern California's Marshall School of Business.
In 2006, Nissan North America relocated to Tennessee from Gardena, another Los Angeles suburb, and earlier this year, the bustling port city of Long Beach lost on a bid to build Boeing's new 777X jet at the same time that the company ended production of its C-17 aircraft. Honda Motor Co. also moved its research and development hub to Ohio in recent years.
“This is becoming a bigger concern in the long-term,” Vyas said. “This could be devastating for Southern California and for all of California in the long run.”
Brook Taylor, spokesman for Gov. Jerry Brown's Office of Business and Economic Development, downplayed those concerns in an emailed statement and pointed to a budget surplus statewide and new businesses coming to the state.
“Dozens of businesses big and small _ including companies like Genentech and Amazon _ have relocated or expanded in California in the past year, in part, because of pro-job policies pushed by the administration,” he said.
Toyota said it will break ground on its new headquarters in Plano, Texas, this year and most employees wouldn't move out of Torrance until 2017. The new office complex will bring together employees who are now scattered around the country, Toyota said.
The automaker will offer relocation packages to employees who work at the Torrance site.
The city is actively search for a new company to occupy the Toyota site, including other Japanese companies, Scotto said.
Residents were also dismayed by the news.
“When I opened the paper today I just went, `oh my gosh.' It just blew me away,” said Janet Payne, 72, a 40-year resident. “It's as if they've been here forever.”
Associated Press writer Christopher Weber contributed to this report.