Toyota and Mazda choose Alabama for $1.6bn joint plant

Jon Howard
January 11, 2018

A year ago, shortly before his inauguration, Trump criticized Toyota and threatened hefty tariffs against the Japanese automaker if it built its Corolla sedan for the USA market in Mexico.

Toyota and Mazda in August announced plans for a new US factory, which will be able to build 300,000 vehicles per year and produce the Toyota Corolla compact auto starting in 2021.

North Carolina was a finalist fro the 4,000-employee plant, where Toyota plans to assemble the Corolla sedan, while Mazda said it will use the factory to produce new crossover vehicles for the US market. This exciting investment in North Alabama not only comes with 4,000 new direct jobs, but also an economic impact that will be felt across the state for many years to come.

While other automakers like Honda Motor have plants in Alabama, for Toyota, the state is a complete "blank area", said a company official. That is a strong testament to the quality of the location, resources, people and government leadership that Alabama offers.

Toyota and Mazda's decision to locate in Limestone County is great news for Alabama and the Tennessee Valley!

"Cutting taxes and simplifying regulations makes America the place to invest!", Trump said in the Twitter post.

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

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Mazda Motor Corp. President and Chief Executive Officer Masamichi Kogai and Toyota Motor Corp. Mazda plans to build new crossover SUVs at the plant.

Trump tweeted in March that he wanted "new plants to be built here for cars sold here".

In October, Toyota said it would scale back investment in a planned plant in Mexico by 30 percent to $700 million and cut planned annual capacity in half to 100,000 vehicles as it shuffles its production plans to meet market demands.

- $210 million investment credit: Toyota Mazda will be able to claim a tax credit of up to 1.5 percent of the qualified capital investment expenses over the next 10 years.

US states covet auto assembly plants because they typically pay above-average wages and spin off jobs at suppliers and service companies.

Huntsville Mayor Tommy Battle said the plant will "provide jobs for decades to come for Huntsville and Alabama".

The plant is expected to open in 2021 and produce 300,000 vehicles a year. Southern U.S. states have the advantage of good transportation infrastructure, business-friendly regulators and generally anti-union politicians. It was behind MI at 19 percent; IN at 12 percent, Kentucky at 11 percent; and OH at 10 percent. "It creates a halo effect that in turn helps attract other projects". The state got its first auto plant, Mercedes-Benz, 25 years ago.

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