Toyota investing $750M at 5 US plants, creating 600 jobs
BUFFALO, W.VA. >> Toyota Motor Corp. on Thursday announced it is investing an additional $750 million at five U.S. plants that will bring nearly 600 new jobs, including the production of two hybrid vehicles for the first time at its Kentucky facility.
It marks yet another expansion of the Japanese automaker’s U.S. presence, bringing to nearly $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 $374 million investment to support production of its first American-made hybrid powertrain.
President Donald Trump congratulated Toyota on Twitter and tried to tie the announcement to his efforts on trade.
Referring to an agreement with Canada and Mexico that would replace the 25-year-old North American Free Trade Agreement, Trump said: “BIG NEWS for U.S. Auto Workers! The USMCA is already fixing the broken NAFTA deal.”
The revised version of NAFTA negotiated by the Trump administration, regarded by many as a modest recasting of the original agreement, has not been approved by Congress.
The president made no mention when a Chevrolet Cruze factory in Ohio recently closed, the first of five North American plants that GM intends to shut down by early next year.
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 the driving force behind the overall investment has been consumers’ “insatiable appetite” for light trucks over passenger cars, pointing to Highlander and RAV4 production and past pickup truck production.
“But I’d be disingenuous if I didn’t say we also have an eye on trade,” Lentz said. “USMCA is part of that. But these decisions we’re making today are really driven by consumers and our product portfolio going forward, for the most part.”
The automaker is spreading the additional investments among several plants.
Toyota’s Georgetown, Kentucky, facility will get a $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 $288 million to increase annual engine capacity at Toyota’s Huntsville, Alabama, facility. The plant will add 450 jobs to accommodate new four-cylinder and V6 engine production lines.