Toyota: HQ, Scion Transitions Going Well

OJAI, CA – This year is a year of transition at Toyota in the U.S., as the automaker integrates elements of its defunct Scion marque into the Toyota brand and continues shifting roughly 4,000 jobs from soon-to-shutter offices across the U.S. into new digs near Dallas.

Both endeavors are going well, says Bill Fay, Toyota Div. group vice president and general manager, while acknowledging neither are easy processes.

“You’re messing with a lot of people’s lives, in a good way, but we’re going to move people from California that have never lived anywhere else,” he tells WardsAuto in a recent interview here during a media event.

When all is said and done, Fay says Toyota still expects about 60% of its employees from California, as well as New York and Kentucky, to have made the move to its new U.S. headquarters in Plano, TX, which will house sales, marketing, administrative, financial and some engineering and manufacturing functions.

By year-end, some 1,000 workers are expected to be in Texas in temporary facilities, up from an earlier-reported figure of 800.

It is unclear how many of those 1,000 will be all-new hires vs. employees transitioning to the Lone Star state. Toyota now is in the hiring process to fill roles of employees who’ve opted not to move.

“One part of (Toyota) is busy doing that recruiting and interviewing and trying to fill in where the holes are of people that didn’t go. We’ve pretty much gotten to the point where everybody has committed they’re going to go or they’re not going to go.”

A Toyota U.S. jobs website shows 108 openings in Dallas as of Oct. 10, ranging from managing counsel in the legal department to a vehicle-supply-chain senior analyst to an Android and iOS software engineer.

Toyota North America CEO Jim Lentz is expected to provide an update on the new Plano campus as well as the hiring process this Thursday.

Says Fay: “I think we’ll still probably lose a few people along the way that say, ‘I’m going to go,’ but haven’t had to go yet. But I don’t think that’ll be a lot of people.”

Ten years ago, when Nissan moved its U.S. sales and marketing headquarters from the Los Angeles area to Nashville, about half its workers opted to move. However, many left Tennessee and moved back to California within a few years, to the point there are very few employees today in Nashville who ever worked at the old Gardena, CA, headquarters, a Nissan North America employee recently told WardsAuto.

Toyota’s Plano campus is slated for completion in April and likely will be ready for occupancy around May, with employees moving in from May 2017 through fall 2017.

“We’ll try and stagger that and try and have some kind of controlled chaos getting everybody from California and Kentucky to there, so I think it’s been an interesting process,” Fay says, noting he will enjoy the ability for sales and manufacturing executives to have regular face-to-face contact.

Scion Inventory Slim

The other transition taking place at Toyota is that of certain Scion models into the Toyota brand with the start of the ’17 model year.

“There are a thousand things you’ve got to think of and do you don’t necessarily think of when you say, ‘We should do this,’” Fay says of the shuttering of the youth brand. New badging for vehicles and what comes on interior screens of former Scion models at engine start are two of the details that initially weren’t top of mind, he says.

Toyota announced the closure of Scion in early February, citing waning sales and the ability of the Toyota brand to attract the Millennial buyer Scion was after.

Sales of all former Scion models last month were reported by Toyota under its namesake brand. Toyota cited a 1.4% volume increase in its U.S. September brand sales.

However, WardsAuto, which still separates Scion sales, shows Toyota would have posted a 5.0% increase in September if discounting the 88.6% downturn at Scion.

As of late September, WardsAuto inventory data shows zero Scion FR-S, iA and iM models in stock. The tC still had 850 units remaining in inventory, while the xB and xD had just seven and two, respectively.

The latter three models are being discontinued, while the FR-S, iA and iM are living on as Toyotas for ’17, with the FR-S sports car becoming the 86, the iA subcompact car becoming the Yaris iA and the iM compact hatchback now known as the Corolla iM.

There were 1,691 86s in stock late last month, 2,353 Corolla iMs and 4,108 Yaris iAs.

Toyota has provided varying levels of compensation to Scion’s 1,000 U.S. dealers, with dealers who made more recent upgrades getting the most money.

“There were a couple dealers that had just made big investments in Scion because they just built new facilities, and that timing wasn’t perfect,” he says, noting Toyota tried to make the process as fair as possible.

“We’ve largely paid for the signage to come down and the branding to come off the stores,” Fay says of Scion dealerships, nearly all of which were housed within Toyota-brand stores.

As of late September, Fay says Scion signage still needed to come down at a hefty percentage of stores, but classifies progress as “good.”

He says dealers “saw the light” and were in agreement with Toyota that Scion’s time had ended.

“They’re living it and breathing it every day,” Fay says. “It ran its life and I think they agreed we could do equal to or better than going forward with the Scion vehicles integrated into Toyota as we could keeping it a separate brand.”

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