Toyota bets on sprawling Kentucky plant with $1.3 billion…

Toyota bets on sprawling Kentucky plant with $1.3 billion…

Apr 13, 2017

“Toyota bets on sprawling Kentucky plant with $1.3 billion investment” 

By Nathan Bomey, USA Today

Toyota said Monday that it will invest more than $1.3 billion in its sprawling Georgetown, Ky., plant, its largest factory in the world, in a massive retooling project designed to bring new vehicles to market faster and more efficiently.

Although the investment does not include new jobs, the move signals a deepening commitment to the U.S. market amid threats by President Trump of a border tax on automakers that bet on Mexico.

The president, who had previously targeted Toyota in his criticism of companies that make vehicles in foreign markets and sell them to Americans, hailed the Japanese automaker’s investment as reflective of an “economic climate that has greatly improved under my administration,” according to a statement issued by Toyota.

To be sure, the Toyota investment is part of a plan announced days before Trump took office to invest $10 billion in U.S. operations over the next five years. In that respect, the investment is no surprise.

The future of the sprawling, 7.5 million-square-foot Kentucky plant, which is Toyota’s largest factory in the world, was never in doubt. The company makes several vehicles there, including the Camry sedan, which Cars.com has dubbed the most made-in-America car in the U.S. based on an assessment of the car’s components.

Still, the investment marks a significant bet on the future of American manufacturing. Toyota said the retooling investment would pave the way for a new system of vehicle assembly that it’s calling Toyota New Global Architecture. 

The new platform is designed to be easily adjusted for future models, giving Toyota the ability to make engineering and design changes swiftly to response to market changes.

“This is the largest investment in our plant’s history and it speaks directly to the quality of our people and our products, as well as the partnerships we’ve forged in the local community and across the state,” Toyota Kentucky president Wil James said in a statement. “This major overhaul will enable the plant to stay flexible and competitive, further cementing our presence in Kentucky.”

The plant currently has about 8,200 employees, having added 700 in recent months to launch the redesigned 2018 Camry, which was unveiled in January at the Detroit auto show.

The investment adds to a $530 million project authorized in 2013 to make a new Lexus vehicle. The company is expected to continue with plans to consolidate its U.S. headquarters, including operations in Kentucky and California, at a new location in Texas.

The move appears to reflect a cooling off in the previously tense relationship between the president and Toyota. Trump had attacked Toyota in January for its Mexican manufacturing expansion plans.

“NO WAY!” Trump said in a tweet about Toyota. “Build plant in U.S. or pay big border tax.”

Toyota North America CEO Jim Lentz told USA TODAY days later that he understood the sentiment but warned that disrupting the North American Free Trade Agreement could raise prices on vehicles and reduce the size of the U.S. auto industry.

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