April 28, 2014

AP Report on Toyota’s HQ Move From Calif. to Texas Downplays Taxes, Regulations, Other Costs

The Associated Press’s lengthy Monday evening treatment of Toyota’s decision to move its U.S. headquarters and consolidate many of its North American operations in Metro Dallas is reasonably good in spots. But Gillian Flaccus and Michael R. Blood were unduly selective in reporting Torrance, California Mayor Frank Scotto’s reaction to the news that his town would be losing several thousand jobs, and downplayed the relevance of clearly obvious factors influencing the move.

Let’s see what Scotto, a Republican, told the Los Angeles Times, followed by the AP’s reporting.

First, here’s the LA Times, in a story by By Jerry Hirsch and David Undercoffler (bolds are mine throughout this post):

Like … other companies (moving from California to Texas), Toyota could also save money in an environment of lower business taxes, real estate prices and cost of living.

Frank Scotto, Torrance’s mayor, said he had no warning of Toyota’s decision. He said he did know that the automaker planned a corporate announcement for Monday.

“When any major corporation is courted by another state, it’s very difficult to combat that,” Scotto said. “We don’t have the tools we need to keep major corporations here.”

The mayor said businesses bear higher costs in California for workers’ compensation and liability insurance, among other expenses.

“A company can easily see where it would benefit by relocating someplace else,” Scotto said.

Here’s the AP’s rendition:

“When you look at the whole package, it’s difficult to be a business here,” lamented Torrance Mayor Frank Scotto, whose community on the edge of the Pacific will suffer as the jobs migrate to Texas.

“If all these great, high-end jobs are leaving California, then we are going to turn into a place that’s a retirement community” with low-paying service-sector jobs, Scotto said. “We can’t have that,” he added, warning that unless the state has a change of attitude, “it’s going to be way too late.”

Only one variation of the word “taxes” appeared in the AP’s coverage, and it attempted to minimize their impact:

(Texas Governor Rick) Perry has been on a publicity campaign to promote his state as a haven for businesses seeking lower taxes and eased government regulation, but Toyota didn’t mention what, if any, role Perry played in the company’s decision.

Perry, who made two visits to California to lure employers to his state, said Texas offered Toyota $40 million in incentives from the taxpayer-funded Texas Enterprise Fund.

That’s because anyone who understands Japanese culture would know that their companies and their spokespersons are unfailingly polite — and while we’re at it, not “boastful,” as the company was falsely characterized four years ago during the federal government’s attempt to discredit it over alleged “sudden acceleration” problems.

The LA Times story mentions taxes twice, once as noted above, and later when discussing a similar decision by Nissan to move operations to Tennessee nine years ago:

“The costs of doing business in Southern California are much higher than the costs of doing business in Tennessee,” Nissan Chief Executive Carlos Ghosn said at the time. He cited cheaper real estate and lower business taxes as key reasons for the move.

A video of Mayor Scotto’s press conference (the statements obtained above were apparently mostly from post-statement interviews) is here.

Anyone who thinks that Texas’s relatively common sense-driven regulations and its lack of an income tax are not relevant factors in Toyota’s decision — especially as compared to California’s sky-version income levy and its out-of-control regulatory apparatus — is, excuse the expression, whistling Dixie.

Cross-posted at NewsBusters.org.


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