Toyota considering relocating operations to Ann Arbor region
Toyota is reportedly weighing whether it should relocate some California-based operations to the Ann Arbor region, where the company has about 1,100 workers.
Toyota is considering shifting its Los Angeles-based product planning, accounting, travel and data services operations to Kentucky or Michigan, according to Bloomberg.
"It’s a real potential boon for Michigan if they can actually secure that move by Toyota," said Bruce Belzowski, assistant research scientist for the University of Michigan's Transportation Research Institute. "Those are knowledge-type jobs, and that would be very good for the economy."
The move would cut costs for the struggling Japanese automaker in part because high-tech salaried workers in Michigan and Kentucky are generally paid less than salaried workers in California.
Toyota vehicles are displayed in the Safety Testing Facility during the grand opening last year.
File photo
Mike Goss, a Toyota spokesman, declined to confirm the report this morning.
"We’re always looking at ways to be more efficient," Goss told AnnArbor.com. "But there hasn’t been any decision made on this type of activity."
Last year, Toyota officially opened the $187 million, 530,000-square-foot Toyota Technical Center, marking the completion of a years-long expansion. The facility is housed on some 700 acres of property, leaving plenty of room for future expansion.
Bruce Brownlee, senior executive administrator for external affairs at the Toyota Technical Center, is traveling and was not available for comment this morning.
Toyota's local engineering center, located in York Township, conducts engineering and design work for vehicles sold in North America. The operation conducted engineering on the 2009 Toyota Venza, for example. The company also said last year it would invest $100 million to establish the Toyota Research Institute of North America at the former location of the technical center in Ann Arbor Township.
Brownlee said in May that Toyota was aggressively cutting costs at the engineering center to avoid layoffs as the automaker labored through the global auto crisis.
"While there’s no plan to leave California, as Nissan Motor Co. did in 2006, a 'significant' number of positions may eventually move," Bloomberg reported.
Ann Arbor would be competing with Toyota's massive manufacturing operation in Kentucky to land the relocated operation. Belzowski said the product planning division of Toyota "probably would fit better being closer to the tech center rather than to the factory."
"If you're Toyota and you're really worried about costs, then everything is up for grabs. They're probably looking at all ways of trying to reduce costs while at the same time keeping the same kind of quality of workers that they have," Belzowski said. However, "if they feel that they have the (high quality) workforce in California, it may be difficult to transition them to Michigan or Kentucky."
Toyota suffered a $4.8 billion loss in its last fiscal year, shocking the industry with its worst performance in 72 years and underscoring the breadth of the economic crisis. But sales are slowly creeping upward as Toyota reported a 5 percent uptick in October 2009, compared to October 2008.
The report comes after Ann Arbor-based think tank Michigan Future Inc. issued a study last year suggesting Michigan's low-paid, high-skill workforce could eventually serve as an economic development asset.
"Lower wages in the knowledge-based sectors of the economy - where most
of the job growth and good-paying jobs are - could be a competitive
edge for Michigan," Michigan Future President Lou Glazer wrote.
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter.
Comments
Corrington
Fri, Nov 27, 2009 : 7:56 a.m.
I think we're all in debt to Black Coffee Johnson for stating what needed to be said. I am particulary glad that these lovely children are here today to hear that speech. Not only was it authentic Michigan gibberish, it expressed the courage little seen in this day and age.
Black Coffee :)
Thu, Nov 26, 2009 : 2:35 a.m.
let's see how many things can you make from RICE rice pudding,rice cake,rice alcohol,of course just plain rice,:O) one posters comment was that Toyota and Honda are making about the same wages and benefits that the American car factories are making the truth is they have not come up to our standard of living we have gone to their income level starting wage is about roughly $14 for the American worker and the retirement OF 30 and out is gone 401K takes it's place and that's a joke making $14 an hour trying to pay for a living and put back any money for retirement just think of it it can be done the husband makes $14 an hour 10 hours a day 6 day a week the wife makes $14 an hour 8 to 10 hours a day 5/6 days a week and what ever you can loan to kids out for per hour just like the Japanese families all working to survive next thing will be doing is turning all the heat off in all our rooms but one and all set in a circle around the little table with blankets to keep warm don't forget the rice they are achieving exactly what they said after the war that they would take us without firing a shot I know I'm going to get a lot of flak from this post oh well it's time to nurse myself with a good hot cup a of black coffee I hope you'll have a good Thanksgiving
st.julian
Tue, Nov 24, 2009 : 9:27 p.m.
I think it more apt to hope the legislative and executive branch in Lansing don't screw it up. For example, I ocnsidering moving families to Michigan where they just cut school funding for my kids.
OverTaxed
Tue, Nov 24, 2009 : 9:14 p.m.
Don't bring them here. Michigan will just take advantage of them and leave them empty.
ann_arbor_guy
Tue, Nov 24, 2009 : 4:46 p.m.
I think this would be a logical expansion of their existing facilities and it would be great for the area as well.
iceman
Tue, Nov 24, 2009 : 4:13 p.m.
I don't care if your purple and from another galaxy. You want to bring job to Michigan, lets get it on! I'll paint Grandholm and myself purple if it would help. Fifteen percent unemployment moves us past the union/non union issue.
Nathan Bomey
Tue, Nov 24, 2009 : 4:08 p.m.
Toyota just released a statement addressing speculation about its plans. Downplaying the possibility of a massive transfer of workers. Here's the statement if you want to analyze it: "Toyota's North American affiliate companies have no plans to change their multi-company structure, nor plans for any significant geographic relocation of personnel outside of normal operations. Emphasis has been placed on finding new efficiencies, shared services and enhanced collaboration to address the changing economic conditions and prepare Toyota for the future automotive market environment." http://pressroom.toyota.com/pr/tms/statement-regarding-speculation-149282.aspx
A2CarGuy
Tue, Nov 24, 2009 : 3:38 p.m.
Why in the heck would they want to come to... I mean: Wow, great news! C'mon, you'll love it here! Actually, we are now an area of cheap, highly-educated labor and a decreasing cost of living. It would be a smart move.
ritabook
Tue, Nov 24, 2009 : 3:10 p.m.
I worked for Ford years ago and the UAW has grown to be greedy and arrogant. It is not what it once was. The UAW no longer helps anyone but themselves - as far as working with unsafe equipment and chemicals - union workers refuse to work with them, but hired temp workers do and get paid much less then the union workers. The union doesn't care for those employees. Years ago when Toyota wanted to put a plant in Michigan, the UAW protested and demanded they unionize. Guess what? They moved elsewhere - losing good paying jobs in Michigan. Non-union workers at Toyota/Honda facilities are making just about equal pay with good benefits, in safe working conditions without a union -all while making quality vehicles that people want to buy. The UAW needs to change and review its original ideals that helped create the middle class. They need to understand that we need jobs in Michigan even if those employees do not belong to their precious union.
treetowncartel
Tue, Nov 24, 2009 : 2:50 p.m.
One thing we have going for us is the cost of housing. Those workers will be amazed what they can get fro their money here.
Cash
Tue, Nov 24, 2009 : 1:41 p.m.
These aren't assembly line jobs. Geez Louise people. Some will take any opportunity to take a shot at the one single organization that gave America the MIDDLE CLASS. If they strong-armed the Big 3 it would be because the Big 3 CEOs laid down and let them walk on them,too busy watching their own golden parachutes get packed. There are TWO SIDES to a bargaining table. Weak management negotiated poorly...and the UAW was willing to take the money. Who wouldn't? Anyhow, these aren't production positions. So please look elsewhere to point the finger.
uawisok
Tue, Nov 24, 2009 : 1:23 p.m.
Oh I see...the UAW help create the middle class and everyone posting here is dissing the UAW...great then give back your holiday pay, forget about paid days off and start working weekends in a un safe work enviroment...job safety also is a UAW benifit to society....blanket statements are disingenous at best....Oh yeah the UAW and Ford started the United way...oh yeah there greedy too..LOL!!
EngineeringMom
Tue, Nov 24, 2009 : 1:23 p.m.
I see no reason the UAW will have anything to do with this move. Product planning, accounting and data services are all professional groups which are not impacted by the hourly unions. However, the risk of a Michigan tax disadvantage is real and could nix the deal, unless our leaders in Lansing step in to help make this happen.
ritabook
Tue, Nov 24, 2009 : 12:52 p.m.
I think I would rather have Toyota in the area providing much needed well paying jobs with benefits- instead of these jobs going to Kentucky. But I am sure the greedy UAW will encourage Toyoto to move there instead. It's happened before.
chosen1
Tue, Nov 24, 2009 : 12:50 p.m.
ok Jenny G now is a chance for you to do something good for the people of michigan. Make this happen. And Rita i agree with you.
peihaha
Tue, Nov 24, 2009 : 12:40 p.m.
Right, let them move to Kentucky so the money will stay in the country??
Eric64
Tue, Nov 24, 2009 : 12:30 p.m.
Then we get to watch the Money leave the country.
ritabook
Tue, Nov 24, 2009 : 12:07 p.m.
We need the jobs, let's hope the UAW doesn't mess this one up.
John Galt
Tue, Nov 24, 2009 : 11:46 a.m.
More jobs would be a welcome change.