The company is expected to move its U.S. headquarters to Texas from California to take advantage of Texas' lower taxes and easier auto regulations. An announcement may come as soon as today.
Last month, Texas Governor Rick Perry went on a three-day trip to California to lure businesses to uproot and move to the Lone Star State. Perry has claimed about 60 California companies have moved operations to Texas over the past year or so, including Los Angeles-based Occidental Petroleum (OXY).
Shares of Toyota traded recently at $106.74, up 25 cents. They have lost 12.5% year to date, compared with a 1% rise for the S&P 500.
Toyota has been in talks for months with real estate owners and developers in Plano, Texas, where it is looking to house more than 4,000 workers. Real estate brokers familiar with the situation told the Dallas Morning News the plan is for Toyota to build offices with 1 million to 1.5 million square feet at a location adjacent to J.C. Penney's (JCP) corporate headquarters.
Forbes recently named Texas as the seventh best state for doing business. The magazine took into account the state's economic climate and regulatory environment. California didn't even come close, ranking at 39th place on the list.
Toyota set up shop in Southern California in the 1950s, officially opening its headquarters in Torrance in 1982. Although its main manufacturing facilities are in other states, including Texas, thousands of California jobs may be on chopping block. Toyota's California workers hold administrative positions including sales, finance, marketing, engineering and product planning.
Torrance losing the headquarters would be a blow to the local job market. According to Bloomberg, Toyota says some workers will be reassigned to other parts of the company, and there is a so-called "voluntary exit program" for those who choose to leave the company.
Toyota is not the only company reducing its presence in Southern California. Aerospace giant Boeing (BA)has been shedding its local workforce in the area, for years.
The latest data from the Bureau of Labor Statistics show California has the fourth highest unemployment rate in the nation, at 8.1% as of March. Compare that with Texas, where the jobless rate stands at 5.5% -- one of the lowest rates in the nation.
At the time of publication, the author had no position in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.