07/15/03
By GINA HANNAH
Times Business Writer ginah@htimes.com
BIRMINGHAM - In a time when many firms are cutting jobs, Toyota's announcement Monday that it will expand its Huntsville engine plant was welcome news.
Business and government leaders gathered at the World Business Center in Birmingham - headquarters of the Economic Development Partnership of Alabama - to hear Gov. Bob Riley announce Toyota Motor Manufacturing North America Inc.'s plans to add 43,000 square feet and 150 jobs to its factory in North Huntsville Industrial Park.
The expansion will allow the company to build 130,000 V-6 engines in Huntsville annually starting in mid-2005, a move that more than doubles the plant's production capacity.
The project will increase Toyota's local work force to nearly 500.
"That's 500 lives, 500 families and an exponential number of individual futures that are being made brighter by Toyota's presence here in our state," Riley said during a news conference. "This expansion is not only a testament to the success and ingenuity of our friends at Toyota, it's a direct result of the work ethic, pride and dedication of the Alabama work force they employ."
The move allows Toyota to have more U.S.-made parts in the trucks it assembles here, said Dennis Cuneo, senior vice president of Toyota Motor Manufacturing North America.
The engines, which will be machined in Japan and assembled in Huntsville, will be installed in trucks made in Indiana, California, Mexico and, when it opens in 2006, Toyota's new assembly plant in San Antonio.
Construction on the Huntsville expansion is expected to begin next June and cost about $20 million, bringing the company's total local investment to $240 million. Toyota is getting an incentive package of about $4.5 million, including $3 million in job training and $1.5 million in noneducation tax abatements. In exchange, the automaker is releasing the city from a $1 million debt the city owed Toyota for site preparation expenses at the industrial park.
Brian Hilson, president of the Huntsville/Madison County Chamber of Commerce, said Toyota has asked for smaller incentive packages than many companies.
"It's a very refreshing approach," Hilson said in an interview Monday. "Dennis (Cuneo) has said he wishes (incentives) didn't exist. But they've got to have some to be competitive."
The net $3.5 million in incentives for the Toyota expansion brings the state and local incentive total to $32.5 million for the Huntsville plant. In contrast, Mercedes-Benz and Hyundai each got about $250 million in incentives to build their plants in Vance and Montgomery, respectively. Honda got a $90 million package to build its plant in Lincoln.
Cuneo said Toyota doesn't seek large incentive packages because it wishes to be a part of the community.
"If an incentive package is seen as giving too much away, we have to live with that," he said. "You can be penny wise and pound foolish with that sort of thing."
U.S. Rep. Bud Cramer, D-Huntsville, who attended Monday's press conference, recalled the "many, many" telephone calls involved in landing the Toyota plant in February 2001.
"Toyota is such a good partner with us in North Alabama. They pay well, they treat their employees well," Cramer said. "Our future is a bright one because of Toyota's presence in North Alabama and because of the presence of the automotive industry in the Southeast."
After Toyota initially announced it would build in Huntsville, there was speculation about when the automaker would announce an expansion; the company used its breaking-ground ceremony at its West Virginia plant to announce its first expansion there. That plant, which makes engines and transmissions for Toyota and Lexus models, has since expanded two more times.
The automaker also recently completed an expansion at its Princeton, Ind., plant, which assembles Tundra pickup trucks and Sequoia sport utility vehicles.
Mayor Loretta Spencer said Toyota has become an important part of the Huntsville community.
"It's been a tremendous friendship and a tremendous opportunity for Huntsville," she told Toyota managers Monday. "Thank you, and I look forward to more announcements."
