Thu, Jan 11, 2018 - Page 10 News List

Toyota, Mazda choose Alabama: source

GOOD CORPORATE CITIZENS:The joint venture plant would appease the Trump administration’s concerns about jobs moving overseas and boost cost efficiency

AP, DETROIT, Michigan

Japanese automakers Toyota Motor Corp and Mazda Motor Corp have chosen the US state of Alabama for a US$1.6 billion joint venture auto plant that is to begin operating by 2021 and eventually employ about 4,000 people, a person briefed on the decision said.

The manufacturing plant is to be built in the Huntsville area in Limestone County, said the person, who asked to remain anonymous, because the site has not been officially announced.

Officials in the southern state said Alabama Governor Kay Ivey was yesterday to make a major economic development announcement, but they declined to elaborate.

Alabama and North Carolina were apparently finalists for the huge factory, which is expected to begin operating in 2021. It is to be able to build 300,000 vehicles per year and produce the Toyota Corolla compact car for North America and a new small sport utility vehicle from Mazda, the companies have said.

Toyota and Mazda are forming a capital alliance and splitting the cost for the plant equally.

The Huntsville area already has a Toyota engine factory that employs nearly 1,500 people.

The decision to pick Alabama is another example of foreign-based automakers building US factories in the US south. The companies have located there due largely to lower wages and to avoid the United Auto Workers union, which is stronger in northern states.

After reassessing the market, Toyota has changed its plan to make Corollas at a plant in Guanajuato, Mexico, now under construction, and will instead produce Tacoma pickups there, Toyota has said.

US President Donald Trump had criticized Toyota for taking auto production and jobs to Mexico.

With the investment, both automakers hope to prove their good US corporate citizenship and appease the Trump administration’s concerns about jobs moving overseas.

However, Toyota president Akio Toyoda last summer denied that Trump’s views influenced his decision.

“We have been reviewing the best production strategy for our business,” Toyoda told reporters in Tokyo at the time.

Toyota and Mazda also plan to work together on a variety of advanced auto technology, such as electric vehicles, safety features and connected cars, as well as products that they could supply to each other, they said.

It is difficult to predict auto sales in three years, but at present, Toyota might not need the factory for Corolla production.

US sales of small cars last year fell nearly 10 percent as buyers continued a massive shift toward sport utility vehicles and pickup trucks.

Corolla sales fell 14 percent for the year to just less than 309,000, Autodata Corp said.

Still, Toyota and Mazda have said their collaboration would respect mutual independence and equality.

Toyota, which makes the Prius hybrid, Camry sedan and Lexus luxury models, already provides hybrid technology to Mazda, which makes compact cars for Toyota at its Mexico plant.

The sheer cost of the plant also makes a partnership logical, as it boosts cost efficiency and economies of scale.

Working together on “green” and other auto technology also makes sense as the segment becomes increasingly competitive due to concerns about global warming, the environment and safety.

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