Toyota-Mazda plant set for Alabama

Up to 4,000 jobs by 2021 in US$1.6B facility

MONTGOMERY, ALA. • Japanese automakers Toyota Motor Corp. and Mazda Motor Corp. on Wednesday announced plans to build a huge US$1.6billion joint-venture auto plant in Alabama that will eventually employ about 4,000 people.

Several states had competed for the coveted project, which will be able to turn out 300,000 vehicles per year and will produce the Toyota Corolla compact car for North America and a new small SUV from Mazda. Alabama Gov. Kay Ivey and company executives announced that the facility is coming to the Huntsville area in the state’s northern area not far from the Tennessee line.

“Thank you for choosing Alabama. Thank you for believing in the potential of our people in the great state of Alabama,“Ivey said. ”Welcome to sweet home Alabama.“

Akio Toyoda, president of Toyota, said the announcement is something of a homecoming for the company. The site for the new plant will be in Huntsville and located just 22 kilometres from Toyota Motor Manufacturing of Alabama, which produces four-cylinder, V-6 and V-8 engines for several Toyota models.

Production is expected to begin by 2021.

The decision to pick Alabama is another example of foreign-based automakers building U.S. factories in the South.

To entice manufacturers, Southern states have used a combination of lucrative incentive packages, low-cost labour and a pro-business labour environment since the United Auto Workers union is stronger in Northern states.

Alabama was tied with Tennessee as the fifth-largest producer of vehicles in the U.S. last year, according to the Center for Automotive Research in Ann Arbor, Mich. The state produced nine per cent of the cars made in the U.S., the centre said.

“Alabama won a first place trophy today in being selected for that plant,” said Dave Sullivan at AutoPacific Inc., an automotive research company. Sullivan said the factory itself is a huge asset for the state, but it will also cause economic ripples by bringing spinoff jobs at suppliers and service companies in the area.

U.S. sales of small cars fell nearly 10 per cent last year as buyers continued a massive shift toward SUVs and pickup trucks. Corolla sales fell 14 per cent for the year, to just under 309,000, according to Autodata Corp.

Still, Toyota and Mazda have said their collaboration will 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. Japanese automakers Toyota and Mazda picking Alabama for an auto plant is another example of foreignbased automakers building U.S. factories in the South.