Toyota’s decision to move its headquarters from California to Texas is being labeled as a tax-avoidance or cost-cutting move. Automotive industry expert Art Wheaton, senior extension associate with Cornell University’s ILR School, argues that other motivations prompted the move.

Wheaton says:

“Toyota’s decision to move its U.S. Headquarters from California to Texas has multiple purposes. Many people will see this as a tax-avoidance or cost-savings move. I do not feel those are the only motives.

“Toyota vehicle design has been woefully falling behind Ford, Hyundai and others in their plain or boring designs. Sales and marketing have also been less than cutting edge for some time.

“The move for Toyota may help increase the willingness to be bold and take risks as a large turnover in employees is expected. With the closing of Toyota production at the New United Motor Manufacturing plant in Fremont, Calif., there are no West Coast production facilities.

“This move puts the headquarters in close proximity to a major assembly plant. The identity of the company in Texas may increase the sales and profile of large trucks and SUVs made in the San Antonio plant. I anticipate few disruptions for the consumer.”

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