Toyota, Mazda to build plant in Alabama

4,000 jobs will pay average of $50,000 a year, governor says

Reuters

A Toyota automaker moves an engine at the Toyota engine assembly line in Huntsville, Ala. On Wednesday, Toyota and Mazda announced they would build a $1.6 billion assembly plant in Alabama, about 14 miles from Toyota’s Huntsville engine plant.
Reuters A Toyota automaker moves an engine at the Toyota engine assembly line in Huntsville, Ala. On Wednesday, Toyota and Mazda announced they would build a $1.6 billion assembly plant in Alabama, about 14 miles from Toyota’s Huntsville engine plant.

MONTGOMERY, Ala. — Toyota Motor Corp. and Mazda Motor Corp. said Wednesday they will build a $1.6 billion assembly plant in Alabama that will employ up to 4,000 workers, a boost for President Donald Trump who wants automakers to expand U.S. production.

Toyota President Akio Toyoda and Masamichi Kogai, Mazda’s president and chief executive officer, joined Alabama Gov. Kay Ivey in Montgomery to announce the decision.

“Welcome to sweet home Alabama,” Ivey said to both executives, after saying the plant’s workers would earn an average of $50,000 a year.

The plant, which will produce 300,000 vehicles a year, is set to open on a 2,500-acre site in 2021. The plant will be about 14 miles from Toyota’s engine plant in Huntsville.

Toyota plans to build Corolla cars at the plant, while Mazda will build crossover SUVs.

Iowa — and Cedar Rapids — were in the running for the plant, with Iowa putting forward the Big Cedar Industrial Center, a 1,300-acre site northwest of The Eastern Iowa Airport, for consideration. The state learned it had fallen out of the competition in October.

Alabama is providing tax incentives to the companies. No amount has been announced, but a person briefed on the matter said it was expected to be close to $1 billion over several years.

Among U.S. states, Alabama already is the fifth largest producer of cars and light trucks. The state has more than 150 major auto suppliers and 57,000 automotive manufacturing jobs.

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Two decades ago, Alabama spent an estimated $250 million to woo Daimler AG’s Mercedes-Benz to put an auto plant in Tuscaloosa, sparking the birth of auto production in the state.

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

Alabama also is home to assembly plants operated by Honda Motor Co. and Hyundai Motor Co. A Kia Motors Corp. assembly plant operates near the Alabama border in Georgia.

Mazda and Toyota said they still need approval from antitrust agencies for the new joint venture.

U.S. auto sales declined by 2 percent in 2017, and there is some concern the new plant could exacerbate overcapacity and put pressure on prices.

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