Toyota is closing its Erlanger headquarters and moving almost 1,600 jobs out of northern Kentucky as part of a nationwide consolidation of the company's operations.
Company officials gathered employees at its Erlanger offices Monday afternoon to tell them the news. All workers there will be offered jobs either at Toyota's new headquarters in Plano, Texas, or at an expanded technical center in Michigan.
A few hundred engineers also may move to the company's manufacturing plant in Georgetown, Ky., where more than 7,000 people now work.
The Georgetown plant will not be affected by the moves announced Monday.
The decision to pull out of Erlanger, home to Toyota's North American engineering and manufacturing headquarters since 1996, is a huge blow to the region and to the workers who will be displaced.
"We know this is tough news for our employees and the community," said Toyota spokesman Mike Goss. "We recognize the impact. But at the same time, I know this is the right business decision."
Toyota is one of the largest employers in Erlanger and Kenton County, which has struggled to recover in the post-recession economy. Kenton County's unemployment rate of 6.4 percent is the highest among Greater Cincinnati's seven largest counties.
Goss said about 1,000 administrative workers in accounting, finance and information systems will be moved to Plano, where a new headquarters is expected to be complete by early 2017. Another 300 engineers will move to Georgetown, and about 250 procurement employees will shift to a technical center in Ann Arbor, Mich.
Toyota also is moving jobs from California and New York to the new Plano headquarters. More than 4,000 workers nationwide will be affected by the moves. The decision to relocate all those employees in Texas came after years of studying how to make the company's North American operations more efficient, Goss said.
He said Texas is a logical choice because of its central location and proximity to transportation hubs and international ports. He said company officials also wanted to start from scratch in a new location rather than move various administrative, procurement and sales offices into an existing facility.
Construction of the new headquarters should begin soon and is expected to be complete in two to three years.
"This is the most significant change we've made to our North American operations in the past 50 years, and we are excited for what the future holds," said Jim Lentz, CEO of Toyota's North American region.
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