On Monday I attended the news conference hurriedly organized by the City of Torrance at City Hall.
In front of a crowd of television and print reporters, along with city staff and curious onlookers, the mayor of Torrance, Frank Scotto, related to the press that the city only first learned of Toyota’s plans to leave for Texas this past weekend.
Following the press conference, I called on my parents, who now live in a Torrance senior community, and related to them about Toyota’s announcement.
Back in 1957, Bruce had a struggling accounting practice based in Little Tokyo. He received a call from the Japanese Consulate. “Kaji-san, would you be interested in serving as the accountant for a company from Japan?” the consul asked. “The company needs an accountant who is bilingual and we would like to recommend you.”
That company turned out to be Toyota.
Toyota became of the first of many Japanese companies that decided to establish their first American operations in Los Angeles. The banking, insurance, securities and trading companies maintained offices in Little Tokyo, while the electronics, shipping and manufacturing companies took up residence in the South Bay.
Of course, for many of us in the Nikkei community the reasons were obvious; the new-to-market Japanese companies needed bilingual staff and mid-level executives to help them to understand the American market and steer through the maze of laws and regulations. The Nikkei institutions provided a friendly environment for the “chuzai-in” Japanese expatriate families to find Japanese food, newspapers, cultural and religious institutions, and social support.
For many of the Japanese, and Nikkei, it was not always a perfect relationship between the “FOBs” and the un-Japanese Nikkei. But, over time, a level of respect resulted as professional relationships eventually turned to friendships.
Fast-forward to 1994. I was sitting in my first monthly meeting of the American State Office Association, held at Trader Vic’s in the Hotel New Otani in Tokyo. The members were composed of the various American state and regional government offices based in Japan. As members, it was a friendly group of sales-type extroverts, both Americans and Japanese. I was the State of California office director. So, in the pecking order of states, California was #1.
But beneath the surface of our group camaraderie, there was an intense level of competition between my fellow state representatives. We were all in Japan for the same reason: to either attract new corporate investment or to “persuade” companies to leave one state for the green grass of another locale.
I remember meeting Mrs. Naoko Shirane, the State of Texas senior advisor. Shirane-san is a petite women, many years my senior. But I soon learned that her level of contacts back in Texas and in Japan (her maiden name is Mitsui) made her a very formidable competitor.
“Kaji-san, you are very fortunate to represent California,” she quipped. How can any of our states compete with the Golden State?” Hmmm, I wondered. Was Shirane-san serving up a big heaping pile of Texas BBQ covered in sarcasm?
Our California “secret weapon” was our extensive network of former California expatriates in the loosely organized “California-kai” that we used throughout Japan. The network provided us with a great source of local intelligence that gave us a big edge when we had to go head-to-head in competitions with other states.
Today, standing on the side and watching the mayor take on the volley of questions fired by the media, there was one comment that was especially telling. “When we met with Toyota and asked them if they were satisfied, they always said they were.”
I was part of Los Angeles County’s effort to keep Nissan Motors in Gardena. We found out that the State of Tennessee had already crafted a killer proposal for Nissan. Tax incentives, relocation costs, land. For L.A. County, too little, too late.
Following the loss of Nissan from Gardena, it was obvious that the ultimate big score for any state would be to bag Toyota Motor Sales USA. Everyone in the City of Torrance, the County of Los Angeles and the State of California was aware of the regular “raiding parties” conducted by other states. States regularly run advertisements in California urging companies to relocate.
But in the universe of targets, TMS is the “holy grail,” a perfect “10” with a high job count, tax-revenue generation plus all the associated parts suppliers and contractors.
Toss in the “multiplier effect” of both company and employee spending in the local community, sales tax revenue, positive bond ratings, hotel occupancy, meetings, catering, travel, real estate sales, etc. and it’s easy to see that a TMS represents a multi-billion-dollar contribution.
What could the state have done differently to keep Nissan and Toyota? I was reminded of a lesson I learned in Japanese hospitality that anticipates what the guest needs.
The best level of service I’ve ever experienced was in a small, intimate restaurant in Akasaka. From the “irrashaimase,” to being greeted by the owner and his wife, the “oshibori,” the dishes all perfectly presented and served, to having my shoes carefully placed in the genkan pointed towards the door, and having the waitress help with my coat, I clearly remember that I did not have to “ask” for anything. My every question or need was clearly and perfectly anticipated by the staff.
By extension, it would be poor form for Toyota, as a Japanese company, to openly complain. However, from a Japanese perspective, it would be absolutely expected that both state and local government officials, if they were paying attention to the competition, would anticipate what incentives were being dangled before Toyota and to respond BEFORE the company needed to complain.
At the highest levels of economic development, does the corporate client need to ask if everything is fine? I have to say that no one learned from the Nissan experience. By the time that the rumor of Toyota’s relocation surfaced over the weekend, the decision had already been made.
One last anecdote. Back in 2012, I was a sponsor and delegate to the U.S.-China Investment Week. The Chinese delegation was composed of high-net-worth individuals, interested in making investments in the United States.
Our delegation was escorted from the hotel to Cowboy Stadium by a phalanx of Texas state motorcycle troopers, with sirens and lights clearing a path through rush-hour traffic. At Cowboy Stadium, the delegates were welcomed by a huge Jumbotron Texas welcome. Gov. Rick Perry, along with the governors from Wisconsin and Florida, were on hand to welcome the delegates. Former President George W. Bush dined with the group and took individual photos.
So to Shirane-san and Gov. Perry, kudos to you. Your Texas hospitality combined with superior research and perfect anticipation of Toyota’s needs and requirements. Back in Torrance, the finger-pointing is just beginning as the mayor, the City Council and citizens of the city demand to know how they lost the world’s largest auto company. The upcoming City Council meeting on May 6 will be memorable.
Jonathan Kaji is president of Kaji & Associates, a real estate firm based in Torrance. He served as the director of the State of California Office of Trade and Investment in Tokyo (1993-1999) and serves as a member of the Board of Governors for the Japanese American National Museum and the Little Tokyo Service Center. Opinions expressed are not necessarily those of The Rafu Shimpo.