Toyota Chooses San Antonio Over Arkansas

by Lance Turner  on Monday, Feb. 10, 2003 12:00 am  

For the past month, all of the signs seemed to point to Toyota Motor Corp. going to a 2,000-acre site at San Antonio rather than to the Marion Railport Industrial Park near West Memphis.

Last week the board of the world's third-largest automaker sealed the deal to build its sixth North American vehicle assembly plant at the country's ninth-largest city.

Gov. Mike Huckabee, attempting to put the decision in as positive a light as possible, called Toyota a "class operation" and said he's confident that Arkansas would receive its own auto manufacturing plant in the near future.

"I would rather be the bride, but at least we caught the bouquet," Huckabee said.

Huckabee said the state's hopes are "deferred," not dashed, and added that economic development officials are talking to other auto manufacturers, whom he would not name, about moving to Arkansas.

It has been announced that Mitsubishi Motors Corp. is looking to build a second U.S. plant, but it isn't known if it's looking at Arkansas. Other automaker subsidiaries and suppliers also are looking at sites in the state.

The Marion site is near the Mississippi River and interstates 40 and 55. Union Pacific Railroad has a major intermodal facility on the site's northern edge, and the Burlington Northern Santa Fe, Canadian National-Illinois Central Gulf, CSX and Norfolk Southern railroads meet near Marion.

And it's near Memphis International Airport.

Huckabee said the process of vying for the Toyota plant put the Marion site on the world map as a prime spot for an auto plant. It also helped the state gain confidence in the site and the quality of what Arkansas has to offer, he said.

Huckabee said the factors that Toyota cited as reasons to choose San Antonio over Marion were beyond the state's control. Toyota chose San Antonio because of its proximity to Mexico and for marketing reasons.

Among the factors for Toyota, Huckabee said, was, "where could they build that truck and put it closer" to its target market.

In a rare move by an auto manufacturer, Toyota's senior vice president for its North American operations, Dennis Cuneo, released a statement saying he was "very impressed with the potential site in Arkansas, the transportation infrastructure, the work force and the incredibly positive attitude of the state.

"Gov. Huckabee and his team did everything they could to get this plant for Arkansas," Cuneo said, adding that the criticism he had heard about the governor's efforts were unfair. "The governor did all we asked him to do. They put together an extremely competitive incentive package and showed us what an attractive place Arkansas is to do business."

Cuneo went on to say that Arkansas was very much on the radar screen and that he wouldn't be surprised if another automaker makes the decision to locate in the state. He also said Toyota "definitely will consider Arkansas for future projects."

Huckabee didn't disclose what incentives the state offered Toyota but did say what the state offered would have required changes in the state's current package. The governor said Toyota was negotiating with Arkansas in good faith that the state would taken legislative steps to deliver that package. "And I believe we would have," Huckabee said.

Jim Pickens, director of the Arkansas Department of Economic Development, said, "We aggressively pursued the project, and by being a finalist, I believe we have positioned ourselves to receive increased attention for other mega-projects, including an automobile manufacturer, as we move forward in time. Decision-makers internationally now know that Arkansas has a world-class site at Marion/West Memphis and that we can compete."

Toyota said its Toyota Motor Manufacturing Texas Inc. will build about 150,000 Tundra full-size trucks a year beginning in 2006. Production at the San Antonio plant will supplement Tundra production at Toyota's Indiana plant, which is now the only Tundra manufacturer.

Toyota will invest about $800 million in building the plant. It expects to bring about 2,000 new jobs to Texas and "indirectly create work for many more." Fully trained Toyota assembly workers typically make about $62,000 a year.

Site preparation and construction for the plant are scheduled to begin later this year. Toyota said most of the hiring will take place in 2005.

Toyota has four vehicle assembly plants in North America. Its Kentucky operation manufactures the Camry, Avalon and beginning this summer, Camry Solara. Its Princeton, Ind., site builds the Tundra, Sequoia and Sienna. New United Motor Manufacturing Inc., a joint venture with General Motors Corp. at Fremont, Calif., makes the Toyota Corolla and Tacoma, Pontiac Vibe and the Toyota Voltz (a right-hand drive version of the Vibe for export to Japan). The company's Cambridge, Ontario, facility manufactures the Toyota Corolla, Matrix and beginning in September, the Lexus RX 330. Toyota will begin assembly of Tacoma pickup trucks at its new plant in Baja California, Mexico in 2005.

The company has three engine plants in North America. Toyota Motor Manufacturing West Virginia Inc. and Toyota Motor Manufacturing Kentucky Inc. both produce four-cylinder and V-6 engines. Its Ontario plant assembles four-cylinder engines. Later this year, Toyota Motor Manufacturing Alabama Inc. will begin manufacturing V-8 engines for the Tundra.

By 2006, Toyota will employ some 35,000 people throughout North America.

(John Henry contributed to this article.)



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