LITTLE TOKYO INC.: The ‘Toyota Effect’ on Torrance City Politics

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jon kajiBy JON KAJI

The impact of Toyota Motor Sales USA’s relocation from Torrance to Plano, Texas is beginning to ripple through the City of Torrance, throughout the South Bay and Southern California. The “Toyota Effect” will have a huge impact on the outcome of the city races for mayor and council.

Last week, when our middle school daughter returned home, she told us that three of her Japanese and American classmates were sad and worried about moving to Texas, since one of their parents work for Toyota. Our neighbor is also a Toyota employee.

Right now, throughout Southern California, other families are struggling with the decision to stay or go to Texas or where to find a new job to replace their former Toyota position. They have 12 months to make a decision.

Once again, no one can blame Toyota Motor Sales for moving to another location, especially if the company and, more importantly, the stockholders, can save on taxes and operational costs and thus improve the bottom-line return. Texas and many other states tout their lower tax rates, housing costs, excellent schools and pro-business climates.

But, back in Torrance, the real question before the voters is what did the City of Torrance do to keep Toyota Motor Sales? So far, it’s been a game of “duck and cover” by the elected officials and city staff. At the city press conference, notably absent were two of the three candidates for mayor (who are councilmen) as well as the city manager.

I’ve been getting a ton of responses both to the Rafu Shimpo article as well as a more-pointed Daily Breeze story (May 7, 2014, “State Official Blasts Torrance for ‘complacency’ in Losing Toyota”). Yesterday, I was invited to appear on “SoCal Insider” on PBS-KOCE and talk about the loss of Toyota (http://m.youtube.com/watch?v=S4ryj5xSszc).

It’s one thing if the city, Los Angeles County and State of California did their best in pitching TMS USA with the best possible offer. In that case, no one can fault any of the local officials for crafting the best competitive offer.

As a real-time example, Toyota Motor Manufacturing used to operate the NUMMI manufacturing plant in Fremont, California, a joint venture with General Motors.

When GM declared bankruptcy as the economy slid into full recession, the City of Fremont, County of Alameda, Port of Oakland, Air Quality Management District, utility companies, railroads, CalTrans and the State of California organized a “Red Team” to create a proposal to Toyota in an effort to keep the plant and jobs at NUMMI.

In the end, in spite of our joint efforts, Toyota decided to pull the plug on operations. While it was a blow to the local economy, at least the former NUMMI employees and the residents of Fremont understood that all hands pitched in and gave it our best effort.

One of my friends who works for a private equity firm told me, “If Toyota Motor Sales was our primary client, I’d assign three Harvard MBAs fully bilingual and bicultural in Japanese to service the account. We’d make absolutely sure that we’d never lose this key account to any of our competitors.”

Did the City of Torrance have any designated staffers tasked with taking care of the city’s largest employer? Any bilingual, bicultural staff? Had it built up close personal relationships with senior Japanese Toyota executives? Did the city sponsor an official “Toyota Day” in Torrance? Did the mayor conduct annual visits to Toyota City to offer “orei” to the company and thank Toyota for their continued corporate residency?

What will be the impact on the city’s credit rating? School district? Real estate values? Japanese restaurants? Contributions and donations by Toyota to a wide variety of non-profits in the Nikkei and greater community?

“Well, Mr. Kaji, Toyota never complained and we never knew that they were thinking of moving,” has been the official city response. Huh? After Nissan moved to Tennessee? After state after state runs advertisements and commercials and conduct regular California visits to troll for disgruntled California companies? That explanation goes over like a lead balloon.

I don’t think the voters in the City of Torrance buy that explanation and neither do the thousands of pink-slipped Toyota associates, many of whom are Torrance residents. Also, added to the list are the 1,000-plus American Honda associates plus the employees of Denso, Aisin and all the other supply-chain suppliers.

Here’s an interesting fact. Based on the 2010 U.S. Census, more than 34% of the population in Torrance is Asian American. By 2020, that figure should exceed 40%.

In a low-turnout election, which the June primary is likely to be, a significant turnout by an activated voting bloc will decide the election.

For the sake of political speculation, if a bloc of Toyota associates and API voters turn out and vote for a “Save our Jobs” slate of candidates, Torrance city politics can be forever changed.

To paraphrase Ronald Reagan, “Recession is when your neighbor loses his job. Depression is when you lose yours. And recovery is when the current mayor loses his.”

Here are my picks for the Torrance election:

Mayor — Patrick Furey. He understands that the city needs to leverage its “diversity advantage.” Torrance has more than 85 languages represented in the city and acknowledges the contributions of the Japanese American and Japanese communities.

City Council (four open positions) — Alex See, Heidi Ashcraft, Geoff Rizzo, Mike Griffith

So, all you Torrance residents, pull out your absentee ballots and your black Sharpies and mark away! Send a clear message to Torrance City Hall. It’s time for the city to fully recognize and engage its growing Asian community if the city hopes to retain or attract new companies like Toyota.

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.

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