Toyota's Move from Torrance to Texas: California's Wake-Up Call?*

(Updated 5/12/2014) Correction: The Los Angeles Times reported on April 28 a correction on this news story. "Although 2,300 Toyota employees will remain in California, none will be at the Torrance facility."

For Torrance, a city of 147,000 and eighth largest in Los Angeles County, the debate as to whether California is business-unfriendly or not is irrelevant now.

"Figuring out how Torrance can fill the 101-acre hole the giant auto maker will leave behind when it vacates its sprawling campus," write Tamara Audi and Mike Ramsey, is one of many new concerns that Mayor Frank Scotto must deal with now that the city's largest employer with 5,300 workers, unexpectedly announced their relocation to Plano, Texas, population 272,000, "located within the metropolitan area commonly referred to as the Dallas–Fort Worth metroplex" (per Wikipedia).

As to whether the Toyota relocation says anything about California's business climate, the answer is clear.

California was never considered in the search for a new headquarters site, these people said, but its location—far from Toyota's other operations in the U.S.—was a bigger factor than its business climate, which has been criticized by some for its high taxes and myriad regulations.

In fact, a more relevant question would be why Toyota chose Texas over Atlanta, Charlotte., N.C. and Denver, as those cities were Plano's competition, according to those familiar with the search.

I'm sure it didn't hurt that "Texas offered Toyota $40 million to move, part of a Texas Enterprise Fund incentive program run out of the governor's office. At $10,000 a job, it was one of the largest incentives handed out in the decade-old program and cost more per job created than any other large award," write the Journal's Mike Ramsey and Joseph B. White (article also available in MarketWatch).