Jim Lentz, Toyota’s North American CEO, in May called it “one of the biggest headquarters moves in North American corporate history.”
It’s been a long road to Plano, even longer than most people realize, says Toyota North America CEO Jim Lentz.
Though the Japanese auto giant announced in 2014 that it’d be vacating its campus in Torrance, Calif., in favor of the Lone Star State, he traced the move all the way back to Toyota’s earliest American operations, importing and selling cars from Los Angeles.
“This is a project that started probably in 1957,” he told reporters Thursday morning, hours before the company hosted a grand opening for its 2 million-square-foot, 100-acre, Wi-Fi-blanketed, amenity-rich new Plano campus.
“There came a point that I think [company president] Akio Toyoda looked at all of this and said, ‘You know, this may not be the most efficient way for us to run our business.’”
The result was a charge to Lentz to build “One Toyota.”
In the years since that 2014 announcement, Toyota has worked to not just physically centralize what had become a disparate North American presence, but to merge siloed teams, Lentz said.
That effort to align thousands of workers under a single operating culture was the toughest part of what has tallied up to be a more than $1 billion move, Lentz said.
“I think any time you have a sales culture and a manufacturing culture, they are very different,” he said.
But as hundreds of workers have moved into the new campus in waves since May — and will continue to do so through the rest of this year — that merging of cultures has accelerated.
“In this building today, you don’t hear people talking about all those
companies anymore,” he said.
Lentz said it’s all been part of becoming a more nimble, mobility-focused company, rather than just an automaker. As car sales begin to decline, Toyota’s future depends on it.
“How we define success is how well we take care of customers, how quickly we can make decisions,” he said, “and how quickly we can come to market with new ideas.”
The new campus, Toyota officials explained Thursday, was designed to foster in-person collaboration.
Its Torrance campus was 90 percent individual work space, while conventional desk areas in Plano make up only about half of the new digs.
Flush with amenities
And, of course, that also means lots of on-campus amenities.
Executives overseeing the move took reporters on a tour of the campus, highlighting the facilities — some of them still under construction — lining a large inner courtyard landscaped with native Texas plants.
Workers will be able to eat breakfast and lunch at 11 different locations, surrounded by airy communal seating. If they need to pick up allergy medicine or whey protein, employees can hit an onsite convenience store.
The fitness center has a two-story rock climbing wall.
Lentz and other Toyota executives have emphasized repeatedly that the company’s success is driven by its workers.
It’s a philosophy that has informed its high-profile efforts to ensure that as many of its employees as possible make the move with the company.
Company officials early on predicted that as many as 75 percent of the roughly 4,000 employees asked to relocate to Texas would take them up on the offer.
When Nissan moved its North American headquarters from California to a suburb of Nashville in 2006, fewer than half of its employees made the move. Lentz said that was something Toyota managed to avoid.
“We knew we had to work very hard to try to keep as many people as we could,” he said.
As the numbers have become clearer, Lentz said of the 4,200 employees expected to be working at the new headquarters, about 2,800 agreed to move. Most of them came from California, but also from Kentucky, home of Toyota’s largest manufacturing plant, and from New York. That works out to a little less than 70 percent.
Employees are eligible for their full relocation benefits only after they’ve stayed for two years.
Lentz said he hopes that the two years employees had to decide whether they planned to stay or go will help with retention once that time is up — though there might be some normal losses.
“I fully expect that we will have people leave as they reach retirement age two, three years down the road, but I really don’t expect that we’ll see what Nissan saw,” Lentz said. “I think the people that are coming, they really want to be here.”
Hiring from outside
Toyota had planned to hire another roughly 1,000 workers from outside the company, and about 800 of those jobs have been filled, he said.
Of that 800, about 90 percent were hired from the Dallas-Fort Worth area, Lentz said. That’s no small feat, considering the region’s nearly air-tight labor market, particularly for the kinds of educated, highly paid corporate workers Toyota is looking for.
And, economic development officials warn, state legislators could threaten Texas’ ability to lure qualified young workers from other states, by passing legislation that many see as discriminatory, including a so-called bathroom bill.
Without the next generation of workers, officials say, Texas’ economic growth engine could grind to a halt.
Toyota has not taken a formal position against that legislation but has said that its corporate culture puts a premium on diversity and inclusivity.
That, Toyota has said, should speak for itself.
Gov. Greg Abbott, over strenuous objections from the broader business community, has indicated he’d sign a bathroom bill into law.
In an opinion piece for The Dallas Morning News, he praised Toyota’s move as emblematic of Texas’ economic momentum.
Twitter: @jillcowan