Toyota is closing its North American engineering and manufacturing headquarters in Erlanger and plans to move employees to suburban Dallas, Michigan and Georgetown, Ky., the company announced Monday.
The new facility will be in Plano, Texas where the Japanese auto manufacturer will consolidate its three separate North American headquarters for manufacturing, sales, marketing and corporate operations into one campus. The company's North American finance division will also move to Texas.
The company said altogether the moves will affect approximately 4,000 employees.
The move will impact about 1,000 employees at Toyota Motor Engineering & Manufacturing North America Inc. in Erlanger. Toyota said it will expand its Toyota Technical Center near Ann Arbor, Mich. for the relocation of approximately 250 Erlanger positions.
"The conference call today, it was very clear that this is not the cause of anything that the local community has done or has not done. This is a management decision at a higher level," says Boone County Judge Executive Gary Moore.
He says that two year window with give Boone and Kenton counties time to find new employers to absorb those employees that are not transferred to Texas. He says with the lowest unemployment rate in the state of Kentucky, he believes they will have no serious issues filling the void.
"This will give us time to work with new companies that may want to locate here because the talent that will be created by this void will be quite dramatic," says Moore.
The Texas campus is expected to be completed in late 2016 or early 2017. Small groups will start moving this summer from Toyota's Erlanger, California and New York facilities.
The company said about 300 production engineering positions based in Erlanger will be relocated to a new facility to be built at Toyota Motor Manufacturing Kentucky in Georgetown, Ky. with about 1,000 administrative Erlanger jobs being moved to Plano.
"Obviously, we are extremely disappointed by Toyota's decision. We would have welcomed the opportunity to discuss options with Toyota but we will now turn our attention to preparing for this transition," Kentucky Gov. Steve Beshear said. "We also are disappointed that the lives of hundreds of Kentuckians will be disrupted and we pledge to assist those families however we possibly can."
The city of Erlanger said the headquarters departing will mean a loss of approximately $1.3 million per year in tax revenue. The city said the decision "came as a shock to city officials who had no previous conversations about Toyota's plans to leave the area."
Beshear said in the past 30 years, Toyota has invested approximately $6 billion in Kentucky.
"And with 300 jobs moving from Erlanger to Georgetown and 750 new jobs being added to support production of the Lexus ES 350, there will be some 8,200 Toyota employees in Kentucky after the move," he said. "The Toyota officials have assured us that a continued strong presence in Kentucky is central to Toyota's ongoing success."
Also impacted are approximately 2,000 employees at Toyota Motors Sales USA Inc. in Torrance, Calif. and "certain employees" at Toyota Motor North America in New York.
Toyota said it will provide a $10 million philanthropic commitment to communities in Kentucky and California "for local nonprofits and community organizations in these states over a five-year period beginning in 2017 over and above existing commitments."
Texas Gov. Rick Perry said the state offered Toyota $40 million through its Texas Enterprise Fund that offers companies incentives.
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