Daily Independent (Ashland, KY)

May 3, 2014

Winners, losers

Toyota decision was out of hands of Kentucky, California


ASHLAND — Texas was the big winner and Kentucky and California were the big losers in Monday’s announcement that Toyota was consolidating it operations in the United States. While Gov. Steve Beshear expressed disappointment that his office had no prior knowledge of the announcement and that Kentucky was not given the opportunity to make an offer that would keep the jobs here, one suspects this was a business decision that was made far from here and there was nothing Kentucky and California could do to change Toyota’s mind.

Being eliminated in Kentucky are approximately 1,600 Toyota jobs now in Erlanger, where Toyota will close its engineering and manufacturing headquarters. About 1,300 of those jobs will be relocated to Plano, Texas, near Dallas, where Toyota is opening a new office. About  2,000 Toyota jobs in California are being moved to Texas.

Monday’s announcement took Beshear and economic development officials in northern Kentucky by surprise.

“Obviously, we are extremely disappointed by Toyota’s decision,” said Gov. Steve Beshear, who learned of the loss of jobs just prior to the official announcement. “We would have welcomed the opportunity to discuss options with Toyota, but we now will turn our attention in preparing for this transition.”

If it’s any consolation to Beshear and economic development officials in Kentucky, Toyota also did not inform officials in California of its decision until just minutes before Monday’s announcement. In fact, only a handful  of Toyota executives knew of Monday’s announcement until it was made. Those who are losing their jobs in Erlanger said they had heard no rumors of the decision. In fact, before Monday, they thought their jobs were safe.

Mike Goss, Toyota’s vice president of external affairs, said the company did not discuss its plans with officials in Kentucky and California because it was looking for a “neutral  location” instead combining the two operations and either moving the California jobs to Kentucky or the Kentucky jobs to California. Concluding that would be too difficult to achieve, the company opted to close both operations and move to a completely new site. While some may quibble with the wisdom of that decision, once it was done there was little anyone could do to reverse it.

Most of the jobs targeted for elimination in California and Kentucky will not disappear until late 2016 or early 2017 when the the new facility in Plano is expected to be completed. That gives those of us in Kentucky some time to prepare for the loss of jobs in northern Kentucky. Fortunately, that part of Kentucky remains prosperous, and many of Toyota’s employees whose jobs are targeted for elimination are likely to be able to find new jobs without leaving the region. Nevertheless, the loss of 1,300 good-paying jobs with excellent benefits are bound to be a blow to Kentucky’s economy.

That being said, even with the announcement, Toyota remains a major player in this state’s economy. Not impacted by the announcement are the 7,000 jobs at Toyota’s sprawling plant in Georgetown, where the company manufactures Camrys, Avalons and Venzas and where it plans to begin production of the Lexus ES 350 in 2015. The Georgetown plant, lured here by Martha Layne Collins during her single term as governor, remains the crowning achievement of Collins’ four years in Frankfort.