By on April 28, 2014

Toyota_Technical_Center_Ann_Arbor_Twp

Toyota has released a statement (below the fold) on the reorganization of its North American business operations and the consolidation of most of those functions at a new regional headquarters to be built in Plano, Texas. Approximately 4,000 employees of four different business units will be relocated, mostly to Texas, though some functions will be relocated to Toyota facilities in Georgetown, Kentucky and near Ann Arbor, Michigan. Toyota Motor Sales, U.S.A. and Toyota Financial Services in Torrance, Calif., Toyota Motor Engineering and Manufacturing North America in Erlanger, Ky., and Toyota Motor North America  in New York City will be moved between now and early 2017, when the Plano campus and new facilities near Ann Arbor and Georgetown are expected to be completed.

It appears that Toyota Racing Development, and the technical and design facilities in California will not be moving. Overall, though, California will be losing thousands of jobs. Kentucky will also lose some Toyota positions. It appears that the Erlanger, KY facility will be closed, with 300 production engineering positions being moved to a new facility that will be built near Toyota’s Georgetown assembly operations in the same state. The 250 purchasing jobs currently at Erlanger will be relocated to another new facility that will be built on the grounds of the billion dollar plus Toyota Technical Center in Saline, Michigan, near Ann Arbor.

Toyota statement:

Torrance, Calif., Erlanger, Ky., New York, N.Y., and Ann Arbor, Mich., April 28, 2014 –Toyota today announced that it is establishing a new headquarters in North Dallas (Plano), Texas for its North American operations in a move designed to better serve customers and position Toyota for sustainable, long-term growth.
 
Within the next three years, Toyota’s three separate North American headquarters for manufacturing, sales and marketing, and corporate operations will relocate to a single, state-of-the-art campus in Plano.  Toyota’s North American finance arm also plans to move its headquarters to this new shared campus.  Altogether, these moves will affect approximately 4,000 employees.
 
At the same time, Toyota will expand the Toyota Technical Center (TTC) in Michigan to accommodate the relocation of direct procurement from Erlanger, Ky., to its campus in York Township near Ann Arbor.  This expansion is part of an increased investment in engineering capabilities and will accommodate future growth in product development.
 
The transition to Plano from three current headquarters locations – affecting approximately 2,000 employees at Toyota Motor Sales, U.S.A., Inc. (TMS) in Torrance, Calif.; about 1,000 employees at Toyota Motor Engineering & Manufacturing North America, Inc. (TEMA) in Erlanger, Ky.; and certain employees at Toyota Motor North America (TMA) in New York, N.Y. – will begin with initial small groups this summer. However, the majority of these employees will not move until construction of Toyota’s new headquarters is completed in late 2016 or early 2017.  Toyota Financial Services (TFS) is not expected to transition to Plano from its current headquarters in Torrance, Calif., until 2017, which will affect around 1,000 employees.
 
Jim Lentz, who was named Toyota’s first chief executive officer for the North America Region in 2013, said: “With our major North American business affiliates and leaders together in one location for the first time, we will be better equipped to speed decision making, share best practices, and leverage the combined strength of our employees.  This, in turn, will strengthen our ability to put customers first and to continue making great products that exceed their expectations.  Ultimately, enabling greater collaboration and efficiencies across Toyota will help us become a more dynamic, innovative and successful organization in North America.  This is the most significant change we’ve made to our North American operations in the past 50 years, and we are excited for what the future holds.” 
 
In support of the communities in California and Kentucky, Toyota also announced a $10 million philanthropic commitment to provide continued funding for local non-profits and community organizations in these states over a five-year period beginning in 2017, over and above existing commitments.
 
The establishment of a new headquarters builds upon previous efforts by Toyota to enhance regional autonomy, self-reliance and responsibility.  While the sales and marketing, manufacturing and corporate business units will retain their responsibilities and operating names, Toyota expects that new cross-functional teams will identify and execute on ways to serve the broader North American organization.
 
Toyota will construct a new, environmentally-sustainable campus facility in Plano, which is expected to take two or more years to construct after groundbreaking in the fall of 2014.  Until the new campus facility is complete, initial small groups of employees will work from a temporary location in the Plano area.

Toyota will also build a new facility on TTC’s York campus (subject to final approval of state and local incentives) to accommodate approximately 250 direct procurement positions currently based at TEMA in Erlanger. 
 
In addition, about 300 production engineering positions based in Erlanger will be relocated to a new facility to be built at Toyota Motor Manufacturing Kentucky (TMMK) in Georgetown, Ky., while approximately 1,000 TEMA administrative positions will transition to Plano.   
 
Toyota’s 10 manufacturing plants in the U.S. will not be impacted by these changes.  Also, the following Toyota units will not be impacted at this time:
 

  • Toyota regional field offices and Lexus area offices
  • Operating units in Canada, Mexico and Puerto Rico
  • Toyota Financial Service’s regional offices, sales offices, service centers and its bank
  • Calty Design Research facilities
  • Toyota InfoTechnology Center
  • Toyota Racing Development
  • AirFlite Inc.
  • Logistics Services Field Locations
  •  Distribution centers

 
After moving from its existing headquarters, Toyota will continue to have approximately 2,300 employees in California and 8,200 employees in Kentucky.  This includes 750 new jobs being added at TMMK for production of the Lexus ES, which begins in 2015.  Toyota will also continue to maintain offices in the New York City area and Washington, DC.
 
The move will not impact Toyota’s relationship with Gulf States Toyota, Inc. (GST), a private distributor of Toyota vehicles based in Houston, Texas.
 
Toyota Financial Services (TFS) is a service mark used to refer to a number of entities, including Toyota Motor Credit Corporation (TMCC), Toyota Financial Savings Bank (TFSB), and Toyota Motor Insurance Services, Inc. (TMIS).

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96 Comments on “Details on Toyota North American Reorganization: California & Kentucky Lose, Texas & Michigan Gain...”


  • avatar
    George B

    I think this is the Google Street View for the site reported by the Dallas Morning News.

    http://tinyurl.com/lmxkuar

    https://www.google.com/maps/place/Williams+Brothens+Construction+Co/@33.088813,-96.828784,3a,75y,90h,90t/data=!3m4!1e1!3m2!1sgNN6zCSnNrAwdBTTOqvNNg!2e0!4m7!1m4!3m3!1s0x864c3cbe5fa0ff69:0xc45f91a29eb4fa61!2sDallas+North+Tollway+%26+Sam+Rayburn+Tollway!3b1!3m1!1s0x0:0x5d624212021f6de1!6m1!1e1

    It’s the SW corner of TX-121/Sam Rayburn Tollway and Dallas North Tollway.

  • avatar
    87 Morgan

    This move makes a ton of sense. The cost of living in Cali is just too high to have happy employees. I am sure TFS doesn’t like the idea there emoloyees have to moonlight with other jobs just to pay the rent/mortgage. Those are good jobs but not ones that are going to pay 100k to everyone in the cubicle.

    • 0 avatar
      DeeDub

      Yes, forced relocations are always popular. I know if my employer told me I was being relocated to the desert I’d be ecstatic!

      • 0 avatar
        LBJs Love Child

        Yep. Lousy, stinkin’ desert. This is the location in Plano Toyota is moving to.

        http://www.dmagazine.com/Media/PublishingTitles/stonebriar.jpg

      • 0 avatar
        George B

        Relocating to a site across the road from Stonebriar Country Club and a short distance from lakeside homes in The Colony and Lewisville isn’t “desert”. Pier 121 marina just a couple miles from the Toyota site. http://pier121marinatx.com/ I almost bought a 3300 sq. ft. house with a view of the lake and the marina for $300k last year. I met friends for drinks at Henry’s Tavern in the Shops at Legacy http://shopsatlegacy.com/ a mile from the site last night and enjoyed a couple local craft beers for $10. The tradeoff is a trip to the beach probably requires a plane flight.

      • 0 avatar
        stuki

        From the dessert in this case. Dallas is a bloody swamp. At least compared to SoCal.

        I’ve advised on some relocations from Cali and New England to Texas, Nevada, Arizona and such. Almost every time, the vast, vast majority of employees are ecstatic. They get to keep a salary from a higher cost region in a lower cost one. They get to sell a million dollar postage stamp lot in Cali, which even nowadays buys you something more like a lakefront ranch in Dallas. And the company almost always end up forking over generous relocation packages. Given how destitute and debt ridden most Cali cubiclers are, many seem to feel it’s almost a new beginning. The guys doing the bitching, are generally the higher ups; whose Fed padded payouts render them relatively immune to trivialities like million dollar prices for Andy Gumps on Ghetto street corners. And whose identities and social circles are much more invested in the “Flyover Country baad” myth.

    • 0 avatar
      elimgarak

      Only 42-45% made the move with Nissan to TN. What percentage do you think will move with Toyota to TX?

      • 0 avatar
        DeeDub

        This will be an excellent way for Toyota to separate the wheat from the chaff. Unfortunately they’ll be left with only the chaff.

      • 0 avatar

        The packages offered should tell how fungible the employees are.

      • 0 avatar
        highdesertcat

        elimgarak, it is hard to forecast at this point how many employees will transfer with TMS to TX because we don’t know how many employees will be asked to stay on with TMS and move to TX.

        When NUMMI closed, not everyone working there was asked to transfer. Ditto with Nissan. Only the select few worth keeping were asked and their moves were paid for, plus per diem, plus temporary lodging. That’s the way it is every time a business pulls up stakes and moves out of state. Only the worthwhile contributors are asked to stay on. The rest are shown the door. New candidates for the state’s unemployment line.

        A lot of people living and working in CA would LIKE to leave but can’t afford to, for any number of reasons. I have no doubt the same will present itself to TMS this go ’round.

        I have a number of friends and family who reside in CA and who would like to leave to go elsewhere but just can’t make it happen financially. The ones choosing to stay voluntarily are financially secure or independently wealthy because of business moves made in CA during the years prior to its financial collapse.

        Those who are not financially secure have seen their living standard tumble downward. Cost of food, utilities, housing and fuel is just out of whack with the rest of the country. We went shopping at Albertson’s during a recent roadtrip to CA and found the prices of stuff much, much higher for the same goods than at the Albertson’s where we live.

        But employees always have the option to transfer with TMS, or not. Plano will be quite a shock for many who choose to transfer. But so will Michigan.

        • 0 avatar
          elimgarak

          Thanks for the thoughtful response.

        • 0 avatar
          Dr. Kenneth Noisewater

          Indeed, between dealing with selling the old house, buying in the new neighborhood after you’ve rented awhile to figure out where’d you be happiest, moving, changing schools, etc., it’s a real hassle even with corporate assistance (if there’s any to be had).

          For my last move I ended up negotiating a nice reimbursement into my deal, though I still had to front about $8k all in, and I didn’t have a house to sell or family to handle.

      • 0 avatar
        indi500fan

        The economy was pretty strong in 2006.
        Not many “breadwinner” jobs available these days.
        Number of transferring employees might be bigger than expected.

      • 0 avatar
        stuki

        You have to look at it by the percentage of primary income earners choosing to leave. Obviously an hourly employee married to a local doctor with a thriving practice, won’t leave. But that has little to do with the attractiveness of the offer in isolation.

        Looked at that way, and considering not all autoco back office jobs pay “primary breadwinner” bucks, those mid 40s percentages are likely a good bit higher amongst those who realistically had an option.

    • 0 avatar

      > I am sure TFS doesn’t like the idea there emoloyees have to moonlight with other jobs just to pay the rent/mortgage.

      These moves are often motivated by saving on labor costs. The transplants aren’t opening factories in the south to pay the same wages to help the local economy.

      • 0 avatar
        geeber

        Even with lower wages, a person can still come out ahead if the cost of living is lower. The cost of housing is a huge concern to people, particularly those with families. Given the disparity in real estate prices alone, I’m guessing that a typical Toyota worker would come out ahead in Texas as compared to California, even if making a lower salary.

        A single person is willing to live in a cramped apartment in an iffy neighborhood to enjoy the urban environment or the California lifestyle. Most people with children, or even married couples, however, are not.

        • 0 avatar

          Generally speaking businesses race to the bottom on costs, incl labor. So the relevant question is does Toyota *need* to maintain an *overall* higher standard of living in Texas to compete with other employers in the area?

          As you mentioned the locals might have certain higher expectation on lot size and perhaps lower in other areas.

        • 0 avatar
          Xeranar

          No surprise cost of living is geeber’s main argument. It’s like a tragic broken record. Outside of a few very high-priced metro areas the difference of housing cost is between 500-1000 dollars a month. Considering the workers in theses places are making between 5-8K monthly (considering these are mostly mid-level management or executive positions) the whole argument falls flat.

          The fact that the market has been propped up by cheap credit supplied by right-wing neoliberal economics to hide the reality of lower real wages as productivity continues to rocket skyward has nothing to do with it, right? It’s just a race to the bottom…

          • 0 avatar
            raph

            “The fact that the market has been propped up by cheap credit supplied by right-wing neoliberal economics to hide the reality of lower real wages as productivity continues to rocket skyward has nothing to do with it, right? It’s just a race to the bottom…”

            Nice to see I’m not the only one drawing this conclusion.

          • 0 avatar
            geeber

            Xeranar: No surprise cost of living is geeber’s main argument. It’s like a tragic broken record.

            No, it’s a huge factor in any choice of where to live, but, for some reason, you either can’t or won’t comprehend this.

            Xeranar: Outside of a few very high-priced metro areas the difference of housing cost is between 500-1000 dollars a month. Considering the workers in theses places are making between 5-8K monthly (considering these are mostly mid-level management or executive positions) the whole argument falls flat.

            Earth to Xeranar – a $500-1,000 a month difference in a regular, recurring expenditure makes a HUGE difference in a monthly budget, even if a person is pulling in $5,000-8,000 a month.

            A salary of $8,000 per month works out to $96,000 per year. My wife and I, together, bring home more than that amount annually. I’d like you to tell her that a $500 or $1,000 chunk in our monthly budget doesn’t represent a huge savings or expense. After she finishes laughing hysterically, she’ll show you our monthly budget.

            I’m guessing that you aren’t married with children.

            You also apparently haven’t been to California. It isn’t just housing costs that are higher. It’s taxes and the cost of virtually everything. When we stopped at Target in Los Angeles we noticed that the prices for various items were higher than they were back home.

            California is a wonderful place in many ways. My wife’s cousin likes living in Cupertino, and he is enjoying the California weather. But the bottom line is that, based on his rental expenses, he had better be making A LOT more money than he was in Pittsburgh, if he wants to maintain the same standard of living. But he is single and childless, so his priorities right now do not center on housing and daycare costs.

            Xernar: The fact that the market has been propped up by cheap credit supplied by right-wing neoliberal economics to hide the reality of lower real wages as productivity continues to rocket skyward has nothing to do with it, right? It’s just a race to the bottom…

            So President Obama is a neoliberal right-winger? Who knew…

            The simple fact is that certain areas attract certain industries. The textile industry began fleeing New England for cheaper locations in the early 20th century, long before we knew what a neoliberal was. Industries were moving out of New York and Philadelphia in the 1930s. This process has been happening for decades.

          • 0 avatar

            > The fact that the market has been propped up by cheap credit supplied by right-wing neoliberal economics

            The problem isn’t the economics per se but the unfortunate reality that humans will take instant gratification over long term planning.

            “You mean I drive that Hemi home today and worry about the payments later? Where’d I sign?”

            Add the profitability of securitization and it’s a free-for-all on the naive and gullible.

            No amount of artificially raising base interbank rates in itself can change the fundamental fact that the market is irrational.

          • 0 avatar

            > So President Obama is a neoliberal right-winger? Who knew

            Just as the big lie that the Soviet state was “socialist” was told by both the US and the soviets themselves, the big lie that Obama is left on anything is equal universal.

            Pushing the same GOP healthcare proposals and such from the 90’s is by definition right-wing even if conservatism in this country decides to compete with the Taliban for running backwards.

          • 0 avatar
            Power6

            Maybe textiles are fleeing New England but there are plenty of other jobs.

            I have thought about this too, and as usual there seem to be too many factors to say “cost of living is everything” or “cost of living doesn’t matter” which seems to be the back and forth here.

            I am pretty sure I make A LOT more money than I could somewhere else. I live outside of Boston in a small house we paid A LOT of money for. I live close enough to commute to where most of the tech employers are, it is a competitive job market, if this job doesn’t work out I can go to any of the other employers that message me on LinkedIn or call me weekly. And I don’t have a college degree so I am not automatically going to be paid well no matter where I go.

            I stay here for other reasons but I don’t know I’d have that opportunity just anywhere else. Maybe I would have to be locked into a few employers in an area. I think this is changing as the type of job I do involves travel and can be done from anywhere in many cases though teamwork in a small company helps get things done when people are in an office together.

            I’m sure I can squeeze and extra 10k out of any job offer just due to intense competition for qualified candidates in this area. Who knows how much more is baked into the pay around here since it is a high cost of living area. Other than my house we don’t pay a lot, old cars, plenty of supermarket competition here, I live near the biggest shopping area in the state. Schools in my town are in the top 10 in the state for whatever that is worth, so high taxes but no need for private school for my kids as some low cost living areas I could move to might not have great schools.

            We save a lot of money, which I am not sure I would have in a lower cost of living area. When I retire then I can cash out to a new family looking for a great location with great schools move to a lower cost of living area.

          • 0 avatar
            geeber

            The textile industry isn’t currently “fleeing” New England; it has been gone for decades. For most of the 20th century, New England was an economically depressed region. It didn’t really revive until the 1980s.

            There are plenty of good schools in low-cost areas. The worst schools around here, ironically enough, tend to be in high-cost cities – Philadelphia and Harrisburg. A family with children that wants a decent school is faced with the costs of private school.

            As for shopping – thanks to amazon.com, one doesn’t have to live near major shopping areas to receive good deals, or enjoy the benefit of a wide selection of goods.

          • 0 avatar
            Dr. Kenneth Noisewater

            Where in CA can you live where average home prices are in the ‘safe’ range of 2.5-3x average incomes? Can you get a job there?

            My property in suburban Austin costs about 1.4x income, with monthly PITI at about 18% of my net take-home. For 4br/3ba/2car garage on ~2 acres. How much would a property like that cost within 30 minutes of SF, SD, LA (or Portland OR, Seattle, Chicago, DC, Boston or NYC, for that matter)?

            In fact, I save enough on monthly income taxes I don’t pay to NYC and NYS at the same salary to cover almost my entire PITI. I’m saving about $3k per month without any real impact to my quality of life, while the same salary in NYC would have be living paycheck-to-paycheck.

          • 0 avatar
            Power6

            Yeah I know the textile industry is pretty much gone ;-) Though my aunt works as a buyer for clothing industry and there has been plenty of employment for her, not that any of it is mfr’d here of course, but it ain’t made in Texas either. I don’t work in textiles though, and there are plenty of jobs for me, I have my pick of the best company and offer out of many.

            Your point is taken about shopping, the ability to have anything delivered and working remotely are some things that I think about Re: living and working from a lower cost area. So far haven’t really needed to consider it, we live well. My point about shopping was you claimed stuff costs more in a high cost area, other than sales tax, Target charges the same, the Nabisco going rate for Oreos is the same and in fact your argument works against you, as Amazon charges the same even though I live in a “high cost” area

            True good schools and bad everywhere. The little house in the expensive town works for me, I pay less taxes than the more monetarily successful neighbors and get the same services. Due to the general affluence the residents are hell bent on great schools so tax money to have that is never an issue, and the mentality won’t change. I am not surprised some high-cost cities have bad schools, the tax base is very diverse and might not care about funding schools. In a suburban bedroom community like the one I live in, its all SFH with familes, no other reason to move here! I imagine though that family oriented communities like this exist all over the place, I am just not sure how many of those are in places where the residents are so fanatical about proper funding through tax dollars, if low taxes is what you want you have to give up some services. Also my well off townspeople are subsidizing us in modest homes here, and I like that, I wouldn’t get that in a lower cost area where the concentration of wealth is lower.

          • 0 avatar
            Power6

            Dr. K good points. For comparison, I am about 12 miles west of Boston easily within 30 minutes outside the city unless the traffic is real bad, we paid about 1.9 times income (both wife and I work) for an old bungalow, 1800sq ft 3br/1.5ba 2-car detached garage, 1/4 acre lot. Obviously a lot smaller than your digs! We are modest people, I wanted to be near the city and any job we might take. So for us the small house rather than spending 3x income is what worked for us.

            Nice comparison though. I have heard Austin is great but becoming more crowded and prices are going up?

            BTW edit – You are asking about the cost of your home, where I am I would guess about 700k depending on size and state of repair etc. You have to pay up for a big lot like that out here! Of course the minimum size is 1 acre for a new build so I have to buy an old house like mine on a small lot to live where I do.

          • 0 avatar
            geeber

            When we visited Southern California, we noticed that the cost of various items was higher than it was for those items in Pennsylvania.

            If you are buying merchandise via Amazon.com then, yes, the cost will be the same whether you live in Boston or Harrisburg or Los Angeles.

            But not if you are buying those items from the local retailer. Target and Walmart were not charging the same prices for various items in southern California that they were in our area.

            As for the tax base and schools – Philadelphia and Harrisburg spend more per pupil than most other districts in the state. They tax residents heavily to pay for those schools, although, with 40 percent of the population of Philadelphia below the poverty line, there are a fair number of people who don’t have to pay. Harrisburg is hurt by the large number of tax-exempt government structures, although the state gives it a stipend to make up for this.

            But, if you look at the amount spent by those districts, and compare it to the amount spent by other districts in the state, one can see it is not a lack of spending that is the root cause of the problem.

          • 0 avatar
            Dr. Kenneth Noisewater

            Demand for living within Austin city limits is driving home prices higher (and rents rising even faster last time I looked), but you could still buy a modest single-family ranch in southwest Austin (’70s vintage) for the low-to-mid $200s, with access to public buses.

            I live about 25mi out, but my commute is early so at speed limits of 70mph for most of that trip I can do 30 minutes garage-to-garage. I don’t really need the space now, but my folks are getting old, and if one of them passes on I’ll likely care for the other unless they end up needing specialized or comprehensive care.

          • 0 avatar
            Power6

            Here I will help your argument along…big box retailers are competing against Amazon for commoditized items, so I can get those things at whatever is the best price, local or Prime, either way is fine with me. I also have 3 grocery stores, a Target, a Walmart and anything else within a mile. I worked in the supermarket industry long ago, we absolutely competed against other local stores. With the Internet I can make sure I cam getting decent prices on typical stuff. Not a problem at all even though I am in a “high cost” area.

            Restaurants, plumbing services, etc. are more local based and in that I figure I probably do pay more for services reflecting the realities of operating and living in the same area I do, but there doesn’t seem to be any reliable comparison to quantify how much it costs, all the “cost of living” indexes seem to be heavily real-estate based.

            Agreed again about the tax base vs schools…I figured you would bring that up. Certainly misappropriation or not using the tax dollars to the best effect if a problem. I guess luckily I don’t have that problem where I live the money is there and it is spent to good effect the residents demand results though honestly it is not a very diverse community, don’t have the problems of a city here. There are stellar schools in Boston if you get into the right ones.

          • 0 avatar
            Power6

            Thanks Dr. K, yeah modest house is about twice as much here so there you go. I’d move just for the weather and lack of snow! But we have family and like it here now I am married with house and kid so probably not going anywhere for a while. I hope to travel to Austin some time I have not been, hopefully a customer that needs visiting materializes there and I am on it.

          • 0 avatar
            geeber

            Power6: Here I will help your argument along…big box retailers are competing against Amazon for commoditized items, so I can get those things at whatever is the best price, local or Prime, either way is fine with me.

            Food costs are a huge expense for most people, and I doubt that they are buying their meat and other perishable items through Amazon.com.

            Even cereal or ready-to-eat items that don’t necessarily spoil quickly aren’t going to be bought via Amazon, as people want to restock their larders immediately when they run out of them.

            Amazon.com is good for purchasing some things, no doubt about it, but not everything.

            Power6: I also have 3 grocery stores, a Target, a Walmart and anything else within a mile. I worked in the supermarket industry long ago, we absolutely competed against other local stores. With the Internet I can make sure I cam getting decent prices on typical stuff. Not a problem at all even though I am in a “high cost” area.

            Local competition doesn’t guarantee that prices charged in the Boston area will be lower than the prices charged in the Harrisburg region or Texas or Kentucky. It just keeps a lid on prices in that area…but Target, Walmart, etc., ultimately aren’t going to sell goods at a loss in one area.

            I bring up the cost of living not to say that everyone needs to immediately leave Boston or Los Angeles or New York City to head for Texas or even south-central Pennsylvania.

            I bring up that factor to counter Xeranar’s constant contention that, because people are paid less in Texas or Kentucky than in California or New York, they are therefore living in two-room shacks with outhouses and a 1991 Chevrolet Celebrity up on blocks in the front yard.

            I can certainly understand why people live in Southern California or Boston or New York, having visited those areas myself. But just because people in other areas have a lower amount of take-home pay does not necessarily mean those people are destitute or even have a lower standard of living.

          • 0 avatar
            Power6

            Yeah we could go for hours about this right? My point on shopping was that the main cost of something produced elsewhere in the same factory/farm then shipped and stocked on a shelf…it is pretty similar no matter where you buy it, and in fact near a city is closer to warehouses and transportation hubs. For example I took a minute to look at local circulars, for Austin TX the “H-E-B” has boneless skinless chicken breast for $1.99/lb this week. Wouldn’t you know it, my local Stop and Shop does too. Probably comes from the same source. That’s just a the first same thing I saw, but if I am eating chicken I am living a “low cost” life outside of Boston!

            I think outside of the sub arguments we agree. I think there are good situations to be had in many places in this huge country, and if one of them gets way out of whack the free market will take care of it to the extent that people can or will move around for jobs. Certainly many states are doing more to lure employers away from traditional centers of population, we’ll see how that goes. The people running MA or wherever else may be cut from a certain color of cloth but they are not blind to what is happening, I wouldn’t count out the traditional centers of population as in some long slow decline quite yet.

            Everyone has to see black and white, gotta pick a side, but there is good and bad to everything.

          • 0 avatar

            > The people running MA or wherever else may be cut from a certain color of cloth but they are not blind to what is happening, I wouldn’t count out the traditional centers of population as in some long slow decline quite yet.

            This is a fairly common systemic problem, and perhaps not incidentally parallel to the Amazon advantage mentioned above: locate warehouses in poor areas and ship to rich ones.

            The suburbs work a tad differently but have the same effect. People make their money in the city but spend it outside. So the gated communities have their near private academies, and urban school are often shiit.

            It’s basically globalization in miniature, but in reality in the US it’s more-than-free trade since the rich areas also massively subsidize the sticks on top of getting screwed on balance of trade.

          • 0 avatar
            Power6

            Yes good points, I think Boston has seen this quite a bit, since it is a small land area with very different dynamics for each area (Hyde Park vs Back Bay vs Dorchester vs Beacon Hill)

            Of course who works in Boston any more, lawyers and financial services mostly…all the other jobs moved to the ‘burbs. Too much traffic and $35/day parking to work downtown!

            We have the whole sitcks vs city struggle all in the state here, if I want low cost of living and spares population I can head west, cheap as you want we have it. Don’t even get the western MA people started about their feelings toward eastern MA!!

          • 0 avatar
            JD23

            You are underestimating the typical cost of living difference between the two locations. Assuming a 30 year mortgage at 4.3% with 20% down, the mortgage on a median $250k home in Plano will cost $990 per month, whereas it will cost $2375 per month on a median $600k home in Torrance. I won’t factor in the difference in taxes, but for me, the income taxes in California would be at least several thousand dollars more than the property taxes I pay in Plano. Interestingly, the median household income in Plano is also higher than in Torrance.

      • 0 avatar
        87 Morgan

        Plano is a suburb of Dallas as is Irving Texas. NMAC is based in Irving, along with another OEM finance arm, honestly I can’t remember which. Either way, TFS will not be able to pay sub par wages and attract quality employees. If anything there is a sizable talent pool in the area along with the other OEM’s this could put upward pressure on the income of certain employees. Why train new ones, when you can poach NMAC?

        As compared to Cali, TX does not have a state income tax. For the sake of argument lets say they pay 15% less wage than what was paid in CA, the income tax portion negates I would figure 5% of the difference. I am quite certain you can live in the Dallas metroplex far easier with 10% less than your wage in CA than your living standard in CA at the increased income amount. Now, I get that real life is more complex, if your spouse works, children, are you buried in your home and so on can make the idea of moving a bit tougher.

      • 0 avatar
        stuki

        I have never seen a company offer people it wants to move, offer them a reduced salary. Even when moving them to dirt cheap locations abroad. Instead, they simply won’t extend an offer at all to those they feel they can replace more cheaply in the new location.

        I have seen studies (of course every single one by either someone selling something, or hawking some political agenda, but hey, such is America anno now) showing raises slowing down once the moved guys are already in the cheaper location, but the immediate period surrounding the move is almost always a windfall for the affected employees.

        • 0 avatar

          > I have never seen a company offer people it wants to move, offer them a reduced salary.

          “it wants to move”

          That’s mostly due to the psychological factors. The offers are sometimes just a formality, if only because recruiting costs money. What do they have to lose?

        • 0 avatar
          Power6

          Salary cuts do seem like taboo, unless there is a union in place agreeing to cuts, I don’t think most white collar employees would take a pay cut well!

          I wonder about the exact same thing though, I have had a couple opportunities to relocate but didn’t. I could have kept the same pay…but no idea if future job changes would have worked out as well as they have in the Boston area…

          The ability to work remotely and simply live near a major airport which is very common in my field (software sales) can have an effect which allows one to live almost anywhere has to have an effect on jobs staying in “hot” areas.

    • 0 avatar
      APaGttH

      Ya, because the cost of living in Kentucky is just out of control.

      (did you actually read the story)

      I mean Plano is a paradise compared to Orange County, California (yes, I’ve been to Plano and yes I’ve lived in Texas).

      Finally, do you really think that Toyota isn’t going to do COLA on what they pay when the move people to this lower cost of living area?

      REALLY?!?!?!*

      I have some great ocean front property in Arizona that I would love to discuss…

      * Not to imply that Toyota would be evil for doing this – basically any company is going to give a COLA in this situation. CA and NY employees going to TX or MI are probably going to see their pay go down, KY (heh heh heh) employees going to TX will likely see their pay go up. KY employees going to MI will likely see no change. It just makes business sense.

      • 0 avatar
        Hillman

        I have found that in a lot of cases the companies don’t pay enough to make up for the COLA. I don’t know if it is to save the employees with the same title from infighting over a perceived slight or just a money saving move.

      • 0 avatar
        Quentin

        250 or so are going to Michigan… and that is the parts procurement group. They will be at the tech center. Considering how many supplied parts come from that area and how much they spend time there for the prototype part to production part transition, it will probably result in less travel for those people.

        Production engineering to Georgetown, which has power train machining, power train assembly, stamping, body weld, and final vehicle assembly is probably not a bad call either.

        Getting your sales arm (TMS) and your manufacturing admin at the same location makes sense, too. From a business perspective, it makes sense. Sucks for northern KY/Cincinnati, though.

    • 0 avatar
      C. Alan

      I recently made this exact move, going from central California to the San Antonio area. The job I took in Texas paid me about $10k less per year than my job in California. I had enough equity in my house in CA to put a nice down payment on a place on the west side of San Antonio, and so far every month I have had more money left in my budget at the end of the month that when I lived in California. While I do miss the Southern Sierras mountains, I don’t miss getting nickled and dimed to death by the California legislature. The straw that broke the camel’s back for me was the $200 per year per child charge to ride the school bus to school (I have 5 kids), and the $400 per year ‘Fire Tax’ that popped up last year.

      • 0 avatar
        Lorenzo

        You must have lived in a sparsely populated unincorporated area of central California. The wild fire prevention tax doesn’t exist in incorporated areas that have fire departments, and school districts in urban areas usually charge a subsidized fare/pass instead of an annual fee.

  • avatar
    Volt 230

    Gov Perry is attracting businesses over to Texas while moonbeam Jerry is pushing them away, good going there Jerry!!

  • avatar
    sitting@home

    “in a move designed to better serve customers”

    *cough* B/S *cough*

    Just about every second car in California is a Toyota. They probably sold two total in the whole of Texas. This is a pure and simple a workforce rationalization and cost reduction exercise. To pretend that customers will benefit is just outright lies.

    I wonder how the new Toyota campus in Texas will look in two years time when nearly all the vehicles in the employee lot are Silverados ?

    • 0 avatar
      elimgarak

      When I was at VW’s HQ in NoVA for an interview a couple of years ago, not as many VWofA products in the employee lot as one would think.

    • 0 avatar
      fvfvsix

      Have you ever been to Texas, let alone Plano/Richardson?

    • 0 avatar
      C. Alan

      Wow, nice try at a stereo-type. The plant that builds the Tundra is in San Antonio. Having driven around Texas for the last six month, I can assure you that the Camery is alive and well here.

    • 0 avatar
      stuki

      In a competitive market, lower costs results in lower prices. Which tend to benefit customers, not?

      By being a lower cost location, Texas also has a reputation for being plenty more “family friendly” than SoCal. As in, a decent wage can allow the spouse to work less than full time. Allowing primary earner to focus more on primary job, and less on all manners of non work interruptions. Over time, that creates a different culture; a (tiny, but still) bit closer to the vaunted Salary Man culture of Japan up until the 90s. Which I’m sure Toyota guys don’t exactly view as a bad thing.

    • 0 avatar
      Dave M.

      Please get out more. Especially around the numerous urban areas you’ll a plethora of Japanese/Korean iron. Out in the sticks, not so much.

    • 0 avatar
      George B

      Sitting, the parking lot will have a mix of cars and trucks not that different from other suburbs across the southern half of the US. Very few on-road 4 wheel drive vehicles. Lots of mid-size Camrys, Accords, and Altimas plus more Fusions than on the coasts. Car-based CUVs are gradually replacing mid-size body-on-frame SUVs. Lots of pickup trucks on the road, but not that many parked at white-collar office parks. If there is some company discount, I’d expect more Toyota and Lexus cars in the mix.

      The big change for Toyota employees is that they will be working in the central time zone so coordinating conference call meetings will be easier. Plane flights to other Toyota facilities will also be much shorter, leaving time to get work done on the travel days.

  • avatar
    Jeff S

    This will hurt the economy in N KY. Over 1,600 jobs lost in this area. Part of this is not just to consolidate operations in Texas but the number of flights from the Greater Northern Kentucky and Cincinnati Airport have been drastically cut due to Delta paring the operations down. There is only one international flight a day versus several a few years ago. Toyota had stated a few years ago that they might pull out of Erlanger because the airport was reducing the number of direct flights. Ciquita moved their headquarters from Cincinnati, OH to Charlotte, NC not only because of tax incentives but because of the reduction of direct flights. I hope that N KY will not lose the Toyota North American Parts Distribution Warehouse in Hebron, KY.

    • 0 avatar
      APaGttH

      How are all those big tax breaks working out. The 2,000 jobs in Torrance in the big scheme of things, not a horrible situation. For NYC, won’t even be noticed. For KY – ouch.

      Interesting how the folks who can’t see the business logic behind this choice of centralization are fixating on this as proof that CA is doomed, and ignoring completely that 1,600 KY jobs are going away and 1,000 are being sent to root of all automotive evil in the known universe – Michigan.

  • avatar
    Big Al from Oz

    It is sad to see the lose of jobs. But in reality we do exactly what business does, we find the cheapest option available and utilize that option.

    So, why do we complain when a business acts in the same way we do?

    Do we go down to the corner store to buy groceries? No, we go to supermarkets, a centralized ‘warehouse’ with a larger range of options.

    Do we go and buy gas from the most expensive service station? No. But what if that service station pays their workers more would we go their? No.

    We are no different than business. If the government offers handouts and we are eligible do we take the money? Yes. Business does as well.

    I think we have ourselves to blame for the state of what is occurring in our societies.

    Everyone wants the cheapest, but when the cheapest affects an individual the individual complains.

    There is a simple solution. If the work is moved to Texas, move to Texas.

    If you don’t want to move adjust to a lower standard.

    Rationalisation is what this is called. It will reduce the price of a Toyota in the US, or at a minimum make Toyota more competitive protecting many other jobs in the US.

    It has to be done.

    • 0 avatar
      Xeranar

      This basically assumes that we’re legally and ideologically locked into this model. In reality this model is maintained by the wealthy elites using the US’ two party system to hold one party completely hostage to the system using a series of moral and emotional arguments to maintain it. This then forces the other party to be made up of opposing views so that even in the struggle to change one party has essentially clamped down on any economic shift.

      Capitalism does not need to function this way. We have variant forms and completely different economic models to choose from. We are by no means tied to this particular form of capitalism. In fact the US constitution makes no distinction on Capitalism and by the time the US was founded it would find our current economic model unthinkable (atleast in the most stringent sense). We’ve replaced the need to be an industrial society with a financial one where the most potent money makes money by giving money to other money. Toyota makes products but they’re a relatively low-value firm compared to the financial giants who turn huge margins every year.

      As a further aside the description of the desire for cheapest products at a consumer level isn’t directly attached to the current model of globalization and use of tax-free zones and economic development centers. In fact the whole level of consumer economics is largely disengaged from the top-level corporate economic structure.

      • 0 avatar
        Rod Panhard

        Is the word “Xeranar” from some other language? If so, it appears to translate to “One who gets his jollies by posting boring neo-Marxist trolls on automotive web forums”

        • 0 avatar
          Kenmore

          I think Xerenar was an old AstraZeneca brand name for an anti-convulsant first marketed in the middle ’90s.

          It was quietly taken off the market a few years ago because of the increasing frequency of reported interactions with purple drank.

          This guy was probably one of the many users who actively sought those interactions, miss the hell out of them and have forever enshrined Xerenar in their memories.

          • 0 avatar
            28-Cars-Later

            +1

          • 0 avatar

            > This guy was probably one of the many users who actively sought those interactions, miss the hell out of them and have forever enshrined Xerenar in their memories.

            It’s interesting that you neglect to remark on the comparative intellect of your peers. I must be doing a sufficient job there.

          • 0 avatar
            Xeranar

            Nice story, too bad the jokes fall flat when the reality sets in that even the supposedly vaunted Kenmore can’t come up with a reasonable argument against the statement I made. This is why the right is tragically bankrupt of ideas. They’ve managed to get the economic system they want installed by Reagan and now face a reality where the middle-class is being crushed as we continue to accept the form of capitalism that created it.

            So he comes up with a cute story to tell to obscure the sad reality that their theory has failed and they refuse to let a new economic model take its place.

        • 0 avatar
          Xeranar

          First off the term is post-Marxist, neo-Marxist is a term used by the right to sound psuedointellectual. On top of that the actual argument I made was one based on critical theory in that I did not choose a side nor did I completely declare capitalism wrong or broken, I merely advocated it can be altered and reformed based upon our own wishes. We could switch back to a more Keynesian view, we could go towards socialism, we can do what we want.

          As for being a troll, last time I checked trolls had to derive mental satisfaction from offending and annoying others. Mostly resorting to ad hominem attacks and rhetorical remarks. Since you couldn’t figure out a way to break down my critical analysis you came after me with an ad hominem which in turn actually makes you the ‘troll’ in the ironic twist.

          As an aside, my name comes from a random name generator I used years ago and stuck with it. It’s nice being the only Xeranar on the internet.

          • 0 avatar

            Xeranar, you’re obviously not a troll and I commend you for trying to espouse and defend some different thinking into this and other threads. No thought process or intellectual construct is forever and the neo-liberal construct has been under attack and has largely crumbled since the demise of the Washington Consensus.

            It’s a great thing though that the debate is not as narrow minded in other arenas of American life as what passes for debate on the internet.

      • 0 avatar
        stuki

        I have no idea what you are talking about, but I can pretty much guarantee that no society exists where people given the choice of two prices for the exact same same thing, will choose the most expensive one. Cheap is always good if you’re buying. Not so much if you’re selling.

        • 0 avatar
          Xeranar

          Well first off very rarely are two products offered that are physically identical. In fact that is a core practice of both business and marketing is even in a similar market is to vary the products. The overly simplistic views on consumer purchases cannot really define why the luxury market works. They are in principle identical vehicles, one has more ‘luxuries’ as we would understand it but yet sells for a massive price increase.

          This is where economists get into exchange value rather than production value but we’re talking about the concept of moving HQs so it becomes more subjective and again steps away from the overtly simplistic ‘it’s cheaper’ mantra. The switch to outside of Dallas may have been driven by a desire to avoid taxes or by more practical concerns the issue is that Plano site is not identical to the Torrance site and by drawing a simplistic comparison using a consumer-based model does a disservice to the various and complex reasons.

          In other words: You’re attempting to shove a sphere through a square hole. It isn’t as simple as lower taxes or what not.

    • 0 avatar
      DC Bruce

      Exactly right. 41 years ago, I was working in DC (my hometown) as a government speech writer and press relations guy. I wanted to work at a newspaper. I personally typed (on a typewriter!) individual letters to managing editors of newspapers all over the country, from Riverside, CA to Norfolk, VA and in between, based on the recommendations of the late David Broder of the Washington Post, who was a friend of my family. A positive response came from the Houston Chronicle, so that’s where I went, having never been closer than 1000 miles to Texas before. Interestingly, I took a pay cut to go there, but could afford to rent my own apartment, something not possible here in DC.

      Also, as Broder advised me: don’t bother writing any paper organized by the newspaper guild (union). They make it so difficult to fire anyone, that Guild papers never take a shot at rookies; they only hire people with experience who have worked elsewhere (at non-union papers who were willing to give a new guy a shot).

  • avatar
    FJ60LandCruiser

    Wait, so Socialism kills jobs?

    Maybe Obama can berate them and shame them into staying in California.

    …or maybe they can beg for tax-exempt status like the pricks in Hollywood?

    • 0 avatar
      Xeranar

      You mean the socialism that Texas is giving away? You know, all those tax-free zones, the non-existent corporate tax, and the destruction of paved roads by large private corporations in the name of profit? Please, the state of Texas uses as much ‘socialism’ as anybody else. The difference is the right likes ‘socialism’ when it gives away to large corporations and hates when it gives to non-whites and the poor.

      • 0 avatar
        geeber

        Not enacting a certain tax does not constitute “socialism.” I guess you’re not aware that Texas doesn’t have a personal income tax, either.

        • 0 avatar
          CJinSD

          Letting you keep what you earn is socialism.

        • 0 avatar
          Xeranar

          And yet I’m aware of Texas’ rather high regressive sales tax. In fact roughly 2/3rds of the annual budget of Texas is met by Federal dollars to the state (far more than what they gave out) and a regressive sales tax. If anything I’m paying you to live in Texas. That is called ‘wealth redistribution’ in the most poignant sense.

          • 0 avatar
            Dr. Kenneth Noisewater

            “And yet I’m aware of Texas’ rather high regressive sales tax.”

            When you combine state and local sales tax, TX comes out lower than lots of places.. Heck, combined rates in Alabama are >=10%!

            http://taxfoundation.org/article/sales-tax-rates-major-us-cities

      • 0 avatar
        jkross22

        “Please, the state of Texas uses as much ‘socialism’ as anybody else. ”

        Clearly that is not the case. Toyota is leaving CA, so it would seem that the Toyota jobs in CA are considered dirty, or ‘not green’.

  • avatar
    jimmyy

    Imagine telling the kids you need to move from beautiful sunny Southern California to … drumroll please … Metro Detroit. Imagine the house hunting visit with the wife and kids to Metro Detroit. Yea. Lets sell that South Redondo cottage for 1.3M and move to Novi or Northville or Troy … Ouch. My advice to all those doing this move … DO NOT SELL THE HOUSE IN CALIFORNIA. Good chance you will be moving back, and that SoCal home will cost you hundreds of thousands more to repurchase in one year.

    • 0 avatar
      Rod Panhard

      Who can forget that immortal scene from “Kentucky Fried Movie.” … https://www.youtube.com/watch?v=Ny4a-oxOndo

    • 0 avatar
      danio3834

      I’m not sure why anyone selling a $1.3M house would move to Troy when they could buy a nicer house of twice the square footage in Bloomfield Hills of around 3/4 of that price.

      • 0 avatar
        bball40dtw

        If they want waterfront, there are a few houses on Lakeshore Dr in Grosse Pointe for sale. Those properties, despite what people may say about SE Michigan are tremendous.

    • 0 avatar
      slavuta

      California has nice weather and bunch of people who turning America into something else. Hopefully next earthquake will fix it. Good job Toyota – no jobs for socialists. Texas is real America and deserves to have best companies.

    • 0 avatar
      Toad

      Metro Detroit will be a tough sell for SoCal Toyota workers. Not only is Detroit, well, Detroit, but the city is coming off the highest snowfall winter on record and it was so cold the trees still don’t have leaves yet.

      Lousy weather (long, cold, grey winters), crumbling infrastructure, different culture…

      If you grew up in metro Detroit you might have an emotional tie to it, but I think you would be hard pressed to find very many people who would voluntarily choose to move from southern California to southeastern Michigan.

      • 0 avatar
        bball40dtw

        It was even difficult for me to move back to Detroit from Arizona. I grew up in the Detroit area, went to college in the city, and worked in the city for awhile too. I hate winter now. If I could split time between Arizona and SE Michigan, I would.

  • avatar
    Jeff S

    When I brought up the 1,600 jobs that will be lost in N KY it was not meant as a criticism of Toyota, but meant to show that the job loss is not just in California and not just because state and local governments have driven away business. There are other factors which in Toyota’s case was the consolidation of their operations in one place with favorable tax breaks and incentives. Kentucky was blindsided on this and did not have a chance to make an offer to Toyota. There is more to this than tax incentives, there is also the fact that Toyota has better access to an airport with direct international and national flights which it had initially when it set up US offices in N KY in 1996. The Northern KY and Cicinnati International Airport was the second largest hub for Delta after Atlanta and it had many direct international and national flights. Delta has basically pulled out of Cincinnati and the number of flights is a fraction of what they were. Toyota has gotten additional breaks from the State of Kentucky to expand their Georgetown, KY plant to produce a Lexus model. About 300 engineers will be transferred from Erlanger, KY to Georgetown and 200 employees will go to Michigan. N KY will lose more jobs than Toyota because many of Toyota’s suppliers have located near their Erlanger offices. It is too easy to blame government for everything and to focus just on California when there are other locations and jobs that are effected. From a business standpoint the Texas move makes sense, I am just trying to state the facts.

  • avatar
    slavuta

    I support anytime when business moves away from NY, CA, NJ, MD, MA. This is not America. Now even Toyota realized that. Screw socialists, lets make profits.

    • 0 avatar
      Power6

      There has been and still is a ****load of private, capitalist green-a$$ money to be made in those states though. What do you think they are cranking out in NYC boatloads of value add every day. I guess if you fail to understand that you could think differently. Its not all about tax rates and home values.

      • 0 avatar
        stuki

        What value is being cranked out in NYC? The entire economy is based around a select few getting massive, trillion dollar sized handouts of wealth stolen by debasing the savings of the rest of the country; then going out squandering most of it by buying overpriced, under performing goods and services with virtually zero attraction beyond positional pretentiousness.

        Cali if definitely more diversified, and still home to lots of genuine value creation. But the recycled Fed loot is also here completely distorting wealth and income flows, to the point where it is completely impossible to tell whether some venture is actually a net value generator. Or simply appears that way because those involved are getting a heavy helping of stolen loot from the debasers managing the card house.

        • 0 avatar

          > But the recycled Fed loot is also here completely distorting wealth and income flows

          If this is a topic of actual concern not just rhetoric, beware that most fed money moves out of NY/CA/etc (note the pattern here) to the hills and flatland.

          Personally I think it’s a waste because the recipients are ungrateful backstabbers.

        • 0 avatar
          Power6

          I figured that was coming ;-) I’m with you totally on the bailpout stuff, but NYC is not just Wall st. I spent a good year hoofing it around NY and traveling “socialist” NE helping sell IT services to SMBs. There are a ton of other businesses outside of financial services. It was actually fascinating to me, as part of the job seeing all the different startups and products.

          But hey that is just first hand experience. They’re here despite the taxes, that oughta tell you something!

      • 0 avatar
        jkross22

        Many of the ****load of private, capitalist green-a$$ money is used to expand outside of CA. CA based companies are expanding out of state because they understand it’s cheaper/easier/better to build new plants or expand their facilities in places where the state won’t come chasing after them for their ‘cut’.

  • avatar
    phargophil

    “Jim Lentz, who was named Toyota’s first chief executive officer for the North America Region in 2013, said: “With our major North American business affiliates and leaders together in one location for the first time, we will be better equipped to speed decision making, share best practices, and leverage the combined strength of our employees. This, in turn, will strengthen our ability to put customers first and to continue making great products that exceed their expectations. Ultimately, enabling greater collaboration and efficiencies across Toyota will help us become a more dynamic, innovative and successful organization in North America.”

    I almost threw up after reading all of the upper manangement catch phrases worked into just three sentences.

  • avatar
    Blue-S

    It is both humorous and sad to read all of the hate about California spewed by those who do not live there, and probably never have lived there! How do those folks know so much about living conditions in CA? Good question. As someone who grew up in Cincinnati, worked a couple of years in Detroit, spent 12 years in Minneapolis and has lived in Southern California since 2007, I can only say this: Everything that you have ever heard about California is probably true. The bad stuff AND the good stuff.


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