Toyota relocation: Bold strategic move could backfire if talent flees the company

Experts: Toyota could lose half its work force

It was a bold move that bowled us all over. But will its Texas Two Step backfire on Toyota Motor Corp.?

“The primary risk is that they’re going to lose some talent,” said Ohio State University Management Professor Peter Ward. “Some people just are not going to move to Texas.”

In case you missed it last week, the Japanese automaker shocked the entire region – not to mention the Governors of California and Kentucky – by announcing a headquarters relocation that will move about 4,000 Toyota employees to Plano, Texas by 2017.

Toyota will offer incentive packages to encourage 3,000 employees to move from Torrance, Calif., where Toyota’s sales and marketing headquarters was established 57 years ago. About 1,000 jobs will be relocated to Texas from Toyota’s 18-year-old North American Manufacturing headquarters in Erlanger, Ky., which is also losing 300 engineering jobs to Georgetown, Ky., along with 250 research jobs to Ann Arbor, Mich.

“We understand the risk of losing some talent,” said Mike Goss, vice president of communication for Toyota Engineering & Manufacturing North America Inc. “We want to keep as many of our people as possible. We’ve invested a lot in them. So, we’re putting together nice packages to incentivize our people to go with us.”

Insiders learn why experts think Toyota could lose half its work force because of the Texas relocation.


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