Economy

Toyota, Mazda announce $1.6 bln plant for Huntsville, Alabama

Toyota, Mazda announce $1.6 bln plant for Huntsville, Alabama

"We hope to work, learn and grow together with the people of Alabama and Huntsville", said CEO of Mazda Motor Masamichi Kogai.

When Toyota-Mazda announced the joint venture and its plans to locate the plant in the US, state officials made a huge push for the project, which is expected to eventually employ 4,000 people and generate a $1.6 billion investment. In September Toyota announced a $106 million technology upgrade for the Huntsville plant.

The plant, which is projected to create about 4,000 jobs when it opens in 2021, will likely be built in the Huntsville area of Limestone County in Alabama, sources told the Associated Press. During that time, Toyota has created a tremendous value chain as our teams have contributed to world-class design, engineering, and assembly of more than 33 million cars and trucks in North America, where we operate 14 manufacturing plants (10 in the U.S.) and directly employ more than 46,000 people (more than 36,000 in the U.S.). "It vaults Alabama to the top as an industry leader in producing the next generation of cars that will power our nation".

In September, Daimler said it would invest $1 billion to expand its Alabama Mercedes-Benz plant to start building electric sport-utility vehicles there from about 2020. 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.

Toyota has 10 existing US factories, including an engine plant in Huntsville and two other facilities nearby in Mississippi. USA new vehicle sales fell 2 percent in 2017, after hitting an all-time record high in 2016, and are expected to fall further in 2018.

A formal announcement of the decision is expected Wednesday.

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The decision - a boon for President Donald Trump's drive to bring investment and jobs to the country - was made based on the state's efficient logistics network and concentration of auto parts makers, among other factors.

Mazda and Toyota said they still need approvals and authorization by antitrust agencies for the new joint venture.

Several states had competed for the coveted project, which will be able to turn out 300,000 vehicles per year and will produce the Toyota Corolla compact auto for North America and a new small SUV from Mazda.

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.

Trump's tweet also included a video segment about the Toyota-Mazda plant from Fox Business News. With more than 150 Tier 1 and 2 automotive suppliers in the state as well as automakers, there are approximately 57,000 automotive manufacturing jobs in Alabama.

Over the last 30 years Toyota, along with German and Asian automakers, has built a second auto industry in the United States, rivaling the operations of the Detroit Three automakers in size and employment, but with newer, and fewer unionized, plants.