For Toyota, it’s all about newcomer status

on Aug7

Toyota’s truck assembly plant in Texas. The company has been shrewd in placing new factory investments in states where it enjoys newcomer status, while gaining clout with more state governments and with Congress. Photo credit: BLOOMBERG

Where will it land?

That’s the $1.6 billion question since Toyota Motor Corp. and Mazda Motor Corp. hatched plans to build North America’s newest auto assembly plant in the U.S.

The factory, no doubt, is setting off a frenzied sweepstakes among states eager for the fat economic development prize and some 4,000 jobs.

While the cost of the plant is being shared equally by Toyota and Mazda, let’s face it: Toyota is probably going to call the shots on this one.

So some governors probably shouldn’t bother making a quick call to Toyota City or Plano, Texas, home to Toyota’s new North American headquarters.

The company has been shrewd in placing new factory investments in states where it enjoys newcomer status. The strategy — spread the jobs and wealth around — has helped Toyota build enormous clout with multiple states but more importantly with Washington, D.C., namely those in Congress.

So scratch Michigan, home to Toyota’s growing r&d tech center near Ann Arbor.

And Kentucky, West Virginia, Indiana, Alabama, Missouri, Tennessee and Texas face enormously long odds — they are already home to major Toyota assembly or powertrain plants.

I’d bet on Georgia, Arkansas, possibly one of the Carolinas, maybe even southern Illinois. (Though Illinois, which is experiencing a fiscal crisis, has zero room to throw money at an automaker with a $50 billion-plus cash pile.)

The winning site will likely be in the Midwest or growing south — and still close to Toyota’s vast supplier network while providing robust transportation and logistics to support exports.

Wisconsin, no longer home to a car plant since Jeep left (Kenosha) years ago and GM exited (Janesville) more recently, could be a dark horse in this race. President Donald Trump narrowly carried the state in 2016 but is not a shoe-in to repeat in 2020. But I doubt Toyota will wander that far north or even curry favor by considering Trump’s re-election prospects in making a decision.

My money is on Arkansas, where Toyota would be the first automaker to lay stakes down with a major assembly plant.

It won’t hurt that Trump carried the state, either.

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