Toyota Motor Corp President Akio Toyoda speaks during a press conference on Wednesday in Montgomery, Ala, where Japanese automakers Toyota and Mazda announced plans to build a huge $1.6 billion joint-venture plant in Huntsville, that will eventually employ about 4,000 people. Photo: The Montgomery Advertiser via AP

Toyota-Mazda factory to be built in Alabama, creating 4,000 jobs

By Kim Chandler

Japanese automakers Toyota and Mazda on Wednesday announced plans to build a mammoth $1.6 billion joint-venture 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 produce the Toyota Corolla compact car for North America and a new small SUV from Mazda. Alabama Gov Kay Ivey and company executives held a joint news conference to announce that the facility is coming to the Huntsville area not far from the Tennessee line.

Production is expected to begin by 2021.

"This is indeed a great day in Alabama," Ivey said. "Thank you for believing in the potential of our people in the great state of Alabama. ... To Toyota and Mazda, thank you so much. Welcome to sweet home Alabama

To lure the plant, the state offered an incentive package of $379 million in tax abatements, investment rebates and the construction of a worker training facility. Alabama Commerce Secretary Greg Canfield said that figure does not include a local incentive package that is still being finalized.

"It is a great honor to announce that Toyota and Mazda will be building a new vehicle plant here. I'd like to express our sincere appreciation for the people of Alabama and Huntsville for their support," said Masamichi Kogai, CEO and president of Mazda Motor Corporation.

Akio Toyoda, president of Toyota Motors, said the new facility is something of a homecoming since the company already has one plant in the state. The new Huntsville plant will be just 14 miles (22 kilometers) from Toyota Motor Manufacturing of Alabama, which produces four-cylinder, V-6 and V-8 engines for several Toyota models.

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 labor and a pro-business labor environment since the United Auto Workers union is stronger in Northern states.

Alabama was already tied with Tennessee as the fifth-largest producer of vehicles in the country last year, according to the Center for Automotive Research, an industry think tank in Ann Arbor, Michigan. The state produced 9% of the cars made in the U.S., the center said.

"Alabama won a first place trophy today in being selected for that plant," said Dave Sullivan, product analysis manager 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.

The announcement comes at a time that U.S. sales of small cars fell nearly 10 percent last year as buyers continued a massive shift toward SUVs and pickup trucks. Corolla sales fell 14 percent for the year, to just less than 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.

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 because of concerns about global warming, the environment and safety.

Alabama started on the road to becoming an auto manufacturing hub in 1993 when Mercedes chose it as the location for a manufacturing plant after the state offered a then-eye popping $250 million incentive package. Honda and Hyundai have since founded assembly plants in the state.

© Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

©2018 GPlusMedia Inc.

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I wonder when Ford, GM and Chrysler will be opening plants in Japan, employing thousands of Japanese?

Japanese car companies employ about 1.5 million Americans. It’s time to demand “fair trade” and force American companies to open factories to reduce this unfair “employment deficit.”

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You give very fair recommendation but American car makers never liked to create factories in Japan. The reason is they know they have to create cars right side handled in Japan. They exported in 1950 and they had some sales but they were stubborn. They just could not think to create right side handled cars for Japanese roads. Japanese car makers in USA manufacture left side handle cars in USA. But American car makers are doing fine in China.

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I wonder when Ford, GM and Chrysler will be opening plants in Japan, employing thousands of Japanese?

Why would they? Japanese hardly ever buy American brand cars.

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Toshiko: It was a joke, because we know all those things about why the US has no market share in Japan.

@Samit Basu: Japanese don’t buy because US cars are not localized at all for the Japanese design sense. Japanese carmakers are successful in the US because they design and build cars for American customers in America. A Toyota built in the US is nothing like the same model in Japan.

If Nissan went to the US 50 years ago and tried to sell Japanese cars with the steering wheel on the right, the radio with different frequency than US radios, the speedometer only in km/hr and all of the dashboard controls in Japanese, no one would have bought them.

But US companies expected Japanese to buy American cars built for America.

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The reason is they know they have to create cars right side handled in Japan.

I don't think that's the reason. Ford is the biggest seller of cars in the UK. All right hand drive, all made in factories in Europe.

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If Nissan went to the US 50 years ago and tried to sell Japanese cars with....the speedometer only in km/hr 

So what? Nissan cars specs have always been metric. The US auto industry has long used standard (inches), Nissan was never required to switch to the US standard in order to sell cars in the US. Indeed, the American industry was compelled to accomodate Japan's differing specs, including dealers and others having to switch over to metric tools. That's what happens in a free and open market.

"....the steering wheel on the right,"

GM's former country manager told me about half their Japanese customers request RHD vehicles. GM offers them both, depending on the model. If GM didnt do that, they'd be accused by people like you that US makers dont try to adopt to the Japanese market.

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What a strange post. Do you not understand that Americans wouldn’t have bought those cars? Did you not know that GM didn’t offer RHD cars for 40 years?

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Trump will tax heavily if made in Mexico Toyota and Mazda car is imported in USA. So Alabama was chosen. I think unskilled laborers get only $40 an hour in auto plants in Alabama. Maybe cheap but there will be noo UFW funds to pay.

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Nissan created factory in Tennessee and Toyota in Kentucky after Japan and USA signed a mutual security treaty. That was more than 50 years ago. It is different now. Those car makers are invited to create car factories in other countries, then car makers create car roads first. They never tried to sell golf carts, but some American car makers did to an oil rich country that is going to make female driving.

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Roll Tide Alabama!!!

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Alabama has been Capitol of US automakers quite a while. It's Mercedes is popular in western states.

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