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Toyota's departure from Northern Kentucky will cost hundreds more jobs than the 1,600 positions moving to Texas, Michigan and Georgetown, Ky.
At least 550 contract workers and support personnel at Toyota's Erlanger headquarters will be out of work by the time the company pulls out in 2017, bringing total job losses there to about 2,150. Some may be offered jobs at Toyota offices elsewhere, but none will remain in Erlanger.
Those workers include contract engineers, temporary accountants, information systems specialists, security officers and cafeteria staff.
Hundreds more workers could follow them out of town, too. It all depends on whether Toyota suppliers now located near the Erlanger headquarters decide they need a stronger sales and administrative presence near the company's new headquarters in Plano, Texas.
"It's not definite that all of them will be following Toyota to Texas. That will have to be decided by each company," said Dan Tobergte, CEO of the Tri-County Economic Development Corp. "We're certainly going to work our hardest to maintain and retain what we have here."
For now, Tobergte and others can only guess how bad things will get when Toyota is gone. The full impact remains unclear because losing the company is a little like an earthquake shaking the economy.
The initial casualties – 1,600 Toyota employees and a vacant office complex – are easy to see. But aftershocks could linger for years as businesses tied to Toyota struggle to adapt, sometimes making moves that cause additional damage to the local economy.
The first to feel it will be the contractors and staffing services that provide the 550 non-Toyota employees who work in and around the Erlanger headquarters. Those jobs will vanish along with the 1,600 Toyota positions over the next two years.
That could just be the beginning. Toyota's suppliers, many of them with offices near Erlanger, must decide whether to move at least some of their employees to Texas or Michigan.
Toyota is centralizing its sales, accounting and other services in a new headquarters in Plano, and the company is expanding and adding to its technical center in Michigan.
Auto industry analysts say suppliers are unlikely to move their manufacturing plants out of Kentucky because they need to be close to Toyota's massive assembly plant in Georgetown, where 7,000 people will continue to work. Other supplier employees, though, such as sales people, might prefer to be close to the new headquarters and technical center, they say.
"Without a doubt, the proximity to the customer and the need to still have face-to-face activities" matters to suppliers, said Dave Andrea, a senior vice president with the Original Equipment Suppliers Association.
Toyota spokesman Mike Goss said suppliers tend to cluster their manufacturing centers close to where Toyota builds its vehicles, largely because Toyota's efficiency model depends on parts arriving just in time for the assembly line.
He said suppliers' sales offices, however, are more typically located near corporate offices. Goss said the company has not spoken with its suppliers yet to see if they will move their employees after Toyota goes.
"Ultimately, it's the suppliers' decision," he said.
EnovaPremier, which makes tire and wheel assemblies for Toyota, has offices in Cincinnati and its headquarters in Louisville. CEO Ed Rigaud likes being close to the Toyota headquarters in Erlanger and expects to travel more when it moves to Texas. He said his company's manufacturing facilities, which are close to Toyota plants in Georgetown and Indiana, aren't going anywhere. Those plants are where the bulk of his company's 300 employees work.
Rigaud said shifting some sales jobs to Texas could be an option down the road, though, if traveling from Cincinnati and Kentucky becomes impractical. "We'll have to assess that over time and see where we are."
Some analysts caution that it's important to distinguish between the suppliers' sales and administrative operations and their manufacturing plants, which are typically larger and employ more workers.
"When it comes to the brass tacks of building these parts, I don't think that's going to change," said Mike Wall, an analyst with IHS. "That manufacturing supply chain has been very established."
In the long run, though, Toyota's move could have a psychological impact on suppliers as they try to plan their future. Wall said they might look at Toyota's move to consolidate in Texas, along with other companies' movement south in recent decades, and conclude they'd be better off there than in Kentucky or Ohio.
"Maybe they consider that," Wall said. "You are having more of those decision-making duties being handled down there."
One potential bright spot for the local economy is suppliers who have roots in the area and are committed to staying, regardless of where Toyota goes. Some of those suppliers could hire engineers and other skilled workers who won't make the move with Toyota.
Kent Howard, CEO of Florence-based sensor manufacturer Baluff, said his company hires about 10 people a year and will welcome the chance to snatch up some former Toyota employees.
"We will touch base with them about jobs here," Howard said. "I imagine there are people who would like to stay in the area."