NEW SONG TITLE: DETROIT, HERE I COME: This move by Toyota is a big deal. California can only live off its climate for so long.
Score a rather remarkable win for Texas in the business recruitmentgame: Toyota has announced that it is moving its California-based national headquarters to Texas.
This is a considerable deal. Toyota has had its U.S. headquarters and marketing operations based in Torrance, California (a suburb of LA) for almost 60 years – time enough to witness California’s descent into a neo-socialist hell of high income taxes, high property taxes, high sales taxes, high regulations, and high home prices, all combined with breathtakingly bad government services. Toyota will be moving its division to a location in Plano, a northern suburb of Dallas.
The company will create a campus there that will have a consolidated workforce of 4,000, with employees from Toyota’s marketing, sales, and manufacturing operations – along with its financial division – now scattered around the country.
Texas Gov. Rick Perry gave a Rebel yell at the news, crowing, “Toyota understands that Texas’ employer-friendly combination of low taxes, fair courts, smart regulations and world-class workforce can help businesses of any size succeed and thrive.” By “fair courts,” of course, Perry was alluding to the fact that Texas has a loser-pay civil court system. He didn’t mention that Texas is also a right-to-work state.
Nor did Perry mention the taxpayer sugar he provided to the company to lure it to make the move. The Texas enterprise fund is giving the company $40 million. Considering that Texas will gain 4,000 jobs, this works out to be a one-time $10,000-per-job incentive. But then, California lavishes subsidies on its favorite businesses, too – most notoriously, the entertainment industry.
California, in turn, will lose upwards of 3,000 high-paying jobs. The companywill allow its California employees who face different positions in the reorganized marketing organization to apply for opportunities in the new marketing division, or in other divisions – such as Toyota Financial Services. Any employee who doesn’t want to move to Texas or can’t find a new position there will be given a severance package.
Losing big companies is nothing new for California, naturally, nor is losing Japanese auto company headquarters. Nissan Motors moved its North American headquarters from California to Tennessee a few years back, and Honda – though it denies that it is contemplating relocation – has moved some of its high-level management to Ohio. Moreover, Texas has already gotten about 1,700 Chevron jobs switched to Houston, and 3,600 Apple jobs switched to Austin – the home of the main campus of the University of Texas, and Texas’s answer to Silicon Valley. (In fact, Texassurpassed California as the top exporter of high-tech products two years ago).
The reasons for Toyota’s move are open for speculation. The CEO of Toyota’s North American operations, Jim Lentz, claimed that the move had nothing to do with California’s notoriously bad business climate – recently ranked 48th(that is, third-worst in the nation, for sociology majors) by the Tax Foundation. No, the places Toyota looked at to relocate – Atlanta, Charlotte, Denver, and Plano – were all closer to Toyota’s large manufacturing plants, but not in any of the states in which Toyota had divisional headquarters (namely, Michigan, Kentucky, and California).
This doesn’t pass the laugh test. Lentz himself cited Texas’s business-friendly climate, and there is the fact that Texas has no personal income tax (which in California goes as high a 13%).
And the same WSJ piece reports that “people familiar with the search for the new U.S. headquarters” – that is, actual Toyota execs under no pressure to be politically correct – mentioned some obvious criteria. The new site had to be near a major airport, be nowhere near Detroit (the poster child for progressive bad governance), have affordable housing, and have decent public schools.
Let’s suppose that the average mid-level Toyota exec earns $150,000 annually. In California, he or she immediately pays fifteen grand in state income taxes. In Plano, the employee pays zero income tax. That is fifteen grand more to spend on vacations, a good car, sending the kids to private school – whatever.
And remember that California, being ruled by the jackboots in the teachers' unions, offers that employee nearly the worst public schools in the nation, while Texas has better than average schools.
Of crucial importance is housing, at least to employees with families (as opposed to the pets-only swinging singles who flock to Frisco). That mid-level exec can afford a home of maybe $300,000 to $600,000, if he or she cuts down on all other expenses. Do a Trulia search for single-family homes in Torrance of 2,500 square feet or more in that price range, and you get onehouse – an unattractive bungalow built over 60 years ago. Do a Trulia search using the same criteria in Plano, and you get over 400 homes, most very recent and of gorgeous construction. California makes building homes ever more costly. Texas doesn’t. But then, we have all the billionaire environmentalist neo-pagans, and Texas doesn’t.
The reaction of the California politicians was interesting. Certainly, poor Frank Scotto, Mayor of Torrance, was stunned. He has the unenviable task of trying to find some business to occupy the 101-acre campus in which Toyota now houses its headquarters. He said about the news of the company’s move, “It was a shock. We didn’t realize the magnitude of what it was.” The mayor is now putting out talking points under the novel slogan “TORRANCE IS A BUSINESS-FRIENDLY CITY.”
Alas, Mayor, even if that were so, your burg is still located in a viciously business-hostile state.
On the other hand, Gov. Jerry Brown – yes, the now geriatric Gov. Moonbeam of the 1970s and '80s – simply dismissed the news, hubristically averring that“[w]e’ve got a few problems, we have lots of little burdens and regulations and taxes, but smart people figure out how to make it.”
So there’s our explanation for Toyota’s move: the Toyota people are just stupid!
The LA Times, the voice of the progressive left in Southern California, echoed Brown’s ludicrous line in a piece trying to show that the Toyota move had nothing to do with bad business conditions in California.
But if anyone is obtuse here, it is Governor Moonbeam and the LAT. He is the one who gave the public employees the right to unionize, knowing that their dues would flow to his party. In the three decades since, pay and pension benefits for public-sector workers have ballooned, and the state faces an unfunded pension liability of upwards of $500 billion. Moonbeam is the one who refused to build any new freeways, leading to the endless traffic gridlock workers must endure. He has generally pushed an extreme environmentalist agenda that has made water and inexpensive housing scarce, and it is he who will be driving the cost of electricity through the roof over the next few years.
Gary Jason is a philosophy instructor and a senior editor of Liberty. His new book, Philosophic Thoughts, is now available through Peter Lang publishers and through Amazon.
THERE IS A REASON JEWS ARE SUCCESSFUL ENTREPRENEURS:
Over the past couple of decades the Chinese have become more interested in the Jews. Of late the Chinese regime has been bringing Jewish scholars and theologians to the People’s Republic to discuss Torah, Talmud, Mishnah and even some of the more mystical tracts.
Why?
It’s no surprise that China-Israel trade is increasing, nor that the China-Israel relationship has grown and deepened. Israel may well be the most dynamic country in the world, bursting at the seams with high-tech startups, dazzling inventions–especially in military and medical technologies–and highly educated and talented people.
But I’m not talking about Israel here. This is about the Chinese fascination with the Jews and Judaism, the religion and the People of the Book.
I’ve got a theory. It’s based on some real history, some anecdotes from participants in those ongoing conversations, and my own views of how the Chinese think about the world. Some of it will likely turn out to be fanciful, but it’s an important subject and it behooves us to ponder it.
David Goldman has done some first-class ponderingalready, as is his wont, and I’m hoping to add some context.
Back when the country’s greatest modern man, Deng Xiaoping, converted the PRC economy to capitalism, Chinese “social scientists” went to work trying to figure out what makes capitalists tick. They were quickly baffled. They kept running into problems; that “knack” we’ve got somehow eluded their new system. After a while, they figured out that the capitalists’ success couldn’t be entirely explained by the nuts and bolts of the marketplace, or by institutions like private property, important though they were. Yes, it would have been easier just to read
Michael Novak’s magnum opus, but they got to his end place: religion is an essential part of successful capitalism.
In their amazing way of organizing most anything, the Chinese launched churches, and of course millions upon millions of them attended Christian (mostly Catholic) services. To be sure, the Party kept a suspicious eye wide open, and some of the churches were deemed too dangerous, even in the cause of Communism. But on they went, convinced they were on the right path. If anyone doubted it, they had mountains of research and even Tocqueville to justify the turn to religion.
After a couple of decades of this, there were still problems, and their social scientists took another look. This time around, they found–surprise!–lots of Jews involved in capitalist enterprises, from banks to stock exchanges to corporations. Indeed, the Jews had a history of doing it. Maybe the Jews knew something the others didn’t? Well, look at Israel…or New York…
And so they’re talking to Jews, not about capitalism but about Judaism. State radio now broadcasts in Hebrew. The Jewish experts who are brought to China find themselves speaking Hebrew with their Chinese interlocutors. Chinese students can now learn Hebrew, and immerse themselves in Jewish studies (maybe they’ll give Ayaan Hirsi Ali an honorary degree sometime soon?).
If you grew up when I did, this will all remind you of jokes that used to be told in New York City. I can’t repeat them here because political correctness forbids it, but they’re about Chinese people in New York who only speak Yiddish.
I wish them well, and I have a bit of advice for the Chinese quest for the secret of capitalist success. First, the Jews do well at lots of things because Judaism is a quest for the right questions, not a canon of correct answers. The constant questioning, and the resultant playfulness of Jewish culture, are central to our success. This is hard for the leaders of the PRC to absorb, and dangerous to their political enterprise, even though in the long run it’s the only way they’re going to get away from the folly of attempting to maintain political control over a “free” economy.
Meanwhile, I have no doubt the Chinese have noticed that
the world’s oldest man is a Jew living on the Upper East Side of Manhattan. He drifted away from the faith for a long time, but has recently reembraced it. He’s a scientist, he thinks the soul outlives the body, and he’s still asking questions.
With such evidence, I think the Chinese are going to continue their Jewish studies. Maybe Shanghai will reestablish the thriving Jewish community for which it was known for so long…and if there start to be mass conversions to Judaism in China, it will be great fun to watch the response of the Jew-haters, won’t it?
Faster, please.
