National Post (National Edition)
Local jobs ‘stable’ as Toyota adjusts Ontario production plans; Transat not for sale.
Investing US$750M at 5 U.S. plants
LONDON, ONT .• Toyota Motor Corp. is eyeing its Cambridge, Ont. plant for a new vehicle to build there, just as production of its RAV4 hybrid has been expanded into the U.S.
The automaker announced Thursday it will assemble the hybrid version of its popular crossover in Kentucky, following a US$750million investment in U.S. plants.
In May 2018, Toyota announced a $1.4 billion investment in its Ontario plants and that the hybrid was to be assembled at Cambridge as its sister plant in Woodstock assembles the gasoline-powered version of the RAV4.
“Toyota announced several investments in the United States (Thursday), including one that will provide Toyota Motor Manufacturing Kentucky with additional capacity to produce RAV4 hybrid vehicles starting in 2020 to support high demand in the U.S. market,” read a statement from Michael Bouliane, spokesperson for Toyota Motor Manufacturing Canada.
Toyota in Cambridge will assemble that vehicle after 2020, but only for the Canadian market, as Kentucky will assemble for the U.S. market, Bouliane said.
“Additionally, Toyota is considering production of a new model in Canada and the company will make an announcement once this decision has been made.”
The Ontario and federal governments each gave $110 million as part of that 2018 announcement.
The automaker also announced on Thursday that employment will remain “stable.”
“We will start production of RAV4 hybrid vehicles in Canada from April 2019 as originally planned,” Bouliane said. “As of 2020, RAV4 hybrid vehicles for the Canadian market and gasoline models (including for the U.S. market) will continue to be produced in Canada.”
The Ontario plants will continue to be the largest producer of RAV4 vehicles for North American markets, he added.
Toyota’s announcement marks yet another expansion of the Japanese automaker’s U.S. presence, bringing to nearly US$13 billion the amount it will spend by 2021.
The latest investments are at facilities in Alabama, Kentucky, Missouri, Tennessee and West Virginia. Those same facilities were part of a 2017 announcement by Toyota for a Us$374-million investment to support production of its first American-made hybrid powertrain.
Toyota Motor North America executive Chris Reynolds said the investments represent yet more examples of the company’s long-term commitment to build where it sells, irrespective of trade uncertainty due to tariffs.
“Our overarching manufacturing principle is if we can sell it here we need to make it here. That’s been true before any tariff uncertainty, it’s true during tariff uncertainty and it will be true after. Our investment cycles go beyond any particular political cycle,” he said during a conference call with reporters.
Toyota Motor North America CEO Jim Lentz said, “In a time when others are scaling back, we believe in the strength of America, and we’re excited about the future of mobility here in America.”
The automaker is spreading the additional U.S. investments among several plants.
Toyota’s Georgetown, Ky., facility will get a US$238 million infusion to produce hybrid versions of Lexus ES 300 sedans starting in May and the RAV4 SUV starting in January 2020, the company announced.
The RAV4 production doesn’t signal a shift away from sedan production at the sprawling Kentucky plant, Toyota executives said. Instead, it reflects Toyota’s plan to build multiple vehicles at its plants to better insulate each facility from downturns in market cycles.
“Unlike some of our competitors, we think there’s value in the sedan market, while it may not be as big as it was,” Reynolds said.
The announcement also includes US$288 million to increase annual engine capacity at Toyota’s Huntsville, Ala., facility. The plant will add 450 jobs to accommodate new four-cylinder and V6 engine production lines. Last year Toyota and Mazda announced plans to build a Us$1.6-billion joint-venture plant in Huntsville that will eventually employ about 4,000 people.
Toyota also is spending US$62 million on equipment to boost production of Toyota and Lexus cylinder heads at its Bodine Aluminum facility in Troy, Mo., as part of its cost-saving New Global Architecture production strategy to share common parts and components among different vehicles.
A Us$50-million expansion and equipment upgrade at a Bodine plant in Jackson, Tenn., will add 13 jobs and produce engine blocks while doubling the capacity of hybrid transaxle cases and housings.
And Toyota will add 123 jobs and spent US$111 million to expand its plant and purchase equipment in Buffalo, W.V., to double the capacity of hybrid transaxles.
Previously, Toyota also announced a Us$600-million investment at its Princeton, Ind., plant to increase the capacity of its Highlander SUV and to incorporate the new production strategy, and US$170 million to launch the 2020 Corolla on a new production line in Blue Springs, Miss.