(Topic ID: 89361)

Stern moving

By ek77

9 years ago


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    #103 9 years ago
    Quoted from RobT:

    I should have known. Why did Toyota decide to build a plant in Texas instead of California when they already had facilities here?

    I'll tell you why! Taxes!

    It probably has more to do with logistics of shipping, where parts are manufactured, where management is located, etc.

    There's a big reason why most companies run their shipping centers in the middle part of the country. If it costs them $100 less on average to ship 50,000 cars across the US, that's a savings of $5mil / year. For a long time, their car parts probably came from Asia, given that, you know, Asian company, so it made the most sense to assemble them close to port and ship finished cars across the US. Their supply chain gets raw materials from all over the world now (India, Africa, etc), so shipping of parts is a wash, and it's cheaper to distribute from Texas. They'd probably move the plants further north to further save on shipping but A) the weather is prohibitive for manufacturing, and B) management is located in Texas.

    So, it's not as much 'Texas is better'; it's more 'Texas is in the middle of the country'.

    All the jobs that I see are located in California. A couple moved to Austin, but that's more because it positioned itself as a regional tech hub without any real competition for hundreds of miles.

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