Toyota and Mazda to build $1.6 billion joint plant in Alabama

Toyota and Mazda plan to build a $1.6 billion auto assembly plant in Huntsville, Alabama that will employ 4,000 worke...

Posted: Jan. 10, 2018 5:29 PM
Updated: Jan. 10, 2018 5:29 PM

Toyota and Mazda plan to build a $1.6 billion auto assembly plant in Huntsville, Alabama that will employ 4,000 workers.

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The plant's location was confirmed by a source familiar with the plans. It is due to be announced Wednesday afternoon. The companies originally announced plans for the plant in August when the two Japanese automakers signed a joint venture agreement, though the location was not known at that time. But the companies said at that time that the plant would be in the United States.

The plant is expected to start building cars in 2021. Toyota will use the plant to build its best-selling compact car, the Corolla, while Mazda will use its production to build a new crossover vehicle.

Toyota had originally planned to build a new Corolla plant in Mexico, but after the joint venture plans were announced in August, Toyota changed course and decided to build the Tacoma pickup at the plant in Mexico and the new Corolla production at the new U.S. plant.

Toyota had been under fire about building Corollas in Mexico. Just before taking office last January President Trump attacked Toyota's plans.

"Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY!" Trump tweeted. on January 5, 2017. "Build plant in U.S. or pay big border tax."

But despite the threat of a border tax, Toyota is moving ahead with plans to build trucks at the Mexico plant, even if it will not build Corollas there.

The company had been making Corollas in the U.S. at a plant in Blue Springs, Mississippi and always planned to keep making vehicles there. By building the new Corolla plant in Huntsville, rather than Mexico, it will have easier access to suppliers of Blue Springs plant. Those suppliers are mostly based in the South.

Related: Toyota investing $1.3 billion in Kentucky plant

Toyota has 10 existing U.S. factories, including an existing engine plant in Huntsville which opened in 2001 and employs 1,450 workers. Overall it has 36,000 U.S. employees, not including those at dealerships. It produces most of the cars and trucks it sells in the U.S. at those U.S. plants and exports some of those cars to other markets.

Most of Toyota's U.S. plants are in the South, and all are non-union. Mazda does not currently have any U.S. factories. Other foreign automakers have built plants across the U.S. South as well.

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Alabama is the fifth largest state in terms of auto production with more than 1 million cars built there annually. In addition to the existing Toyota engine plant it has plants for Hyundai, Honda and Mercedes-Benz. It also has a relatively low unemployment rate of only 3.5%, the lowest rate in the state's history.

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