Where Toyota goes, will support firms follow?

Toyota Boshoku America faces uncertainty.
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Some of Toyota's closest suppliers and support companies are asking the same question thousands of the automaker's employees will ask over the next two years -- should they move to Plano, Texas, or Ann Arbor, Mich., to remain close to the company?

Many Toyota support companies were surprised to learn last week that the automaker will close its U.S. sales and marketing headquarters in suburban Los Angeles, as well as its manufacturing headquarters in Erlanger, Ky., and consolidate mainly in Plano.

One of them is Toyota's U.S. ad agency, Saatchi & Saatchi Los Angeles, which has supported the Toyota and Lexus brands for more than three decades. The office employs more than 400, including the Team One sibling agency that handles the Lexus account.

"We are engaged in dialogue with both the Toyota and Lexus divisions to determine the best way to support their marketing efforts upon commencement of operations in Plano," Kurt Ritter, Saatchi & Saatchi West Coast Operations chairman, wrote in an e-mail last week.

"We continue to be dedicated to providing great work and serving as good stewards of their interests," Ritter wrote.

TBWA\Chiat\Day, Nissan's U.S. ad agency, opened an office in Nashville after Nissan moved its headquarters from Los Angeles to Nashville in 2006.

Automakers rely on a host of outside support companies, including architects, lawyers, headhunters and market research consultants.

Toyota also has a critical relationship with the Los Angeles office of George P. Johnson, the diversified event marketing firm.

It will relocate the necessary staff to Plano to continue working with Toyota, as it has for 47 years, says Denise Wong, president of George P. Johnson Experience Marketing in Torrance. By coincidence, the company already has a subsidiary office in Plano in the same office park where Toyota intends to move.

"That was fortuitous," Wong said.

When fellow client Nissan moved from Los Angeles to Nashville in 2006, Johnson opened a satellite office there.

Toyota spokesman Steve Curtis said the automaker does not yet know how many Los Angeles-area support companies will need -- or desire -- to follow Toyota to Plano.

"Our partners are important to us, and we're working directly with them during this transition," Curtis said. "We're committed to making this process as seamless as possible and appreciate their continued support."

The new geographical plan is also an uncertainty for manufacturing suppliers, including Toyota Boshoku America, the automaker's affiliated North American interiors supplier. Boshoku built its U.S. corporate headquarters across the street from Toyota's Erlanger office building in 2007 to be close to the automaker and employs more than 200 there.

But Toyota now plans to close Erlanger and move its 1,600 employees to three locations. Its 300-employee North American purchasing department will move to Ann Arbor. About 250 people in production engineering will move into a building to be constructed in Georgetown, Ky., and about 1,000 people will move to Plano.

"This announcement has raised many questions within TBA," said a Toyota Boshoku statement distributed to its Erlanger employees last week. "At this time, we do not know many of the details, other than what has been reported by the media."

The statement said Toyota Boshoku believes that the move will take two to three years, which gives it time to assess "how this will affect TBA Group, if at all."

Toyota spokesman Mike Goss estimated that 10 to 12 manufacturing suppliers and support companies operate near Erlanger, including parts companies, contractors, information tech companies and consultants.

On the manufacturing side, many of Toyota's production part suppliers have sales and support offices in the Detroit area -- which is one reason Toyota wants to move its purchasing operations to Michigan.

You can reach Lindsay Chappell at lchappell@crain.com.


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