Toyota pledges $1.33B investment in Kentucky plant
|Toronto Star 10 Apr 2017 at 10:27|
LOUISVILLE, KY.âToyota said Monday it is investing $1.33 billion (U.S.) to retool its sprawling factory in Georgetown, Ky., where the companyâs flagship Camry sedans are built.
No new factory jobs are being added, but Toyota says the upgrades amount to the biggest single investment ever at one of its existing plants in the United States. The retooling also will sustain the existing 8,200 jobs at Toyotaâs largest plant, where about one-fourth of all Toyota vehicles produced in North America are made, the automaker said.
âThis major overhaul will enable the plant to stay flexible and competitive, further cementing our presence in Kentucky,â said Wil James, president of the plant, which also assembles the Avalon and the Lexus ES 350.
The updates at the Kentucky plant are part of Toyotaâs plans to invest $10 billion in the United States over the next five years, CEO Jim Lentz of Toyota Motor North America said in a news release.
U.S. President Donald Trump, in a paragraph added to Toyotaâs news release at the White Houseâs request on Sunday night, praised the investment and said it is âfurther evidence that manufacturers are now confident that the economic climate has greatly improved under my administration.â The paragraph cited the National Association of Manufacturersâ first-quarter outlook survey. It found that 93.3 per cent of manufacturers are somewhat or very positive about their companyâs outlook, a record high thatâs up from 77.8 per cent in December.
But the Toyota investment has been in the works for years as it gears up for production of the revamped 2018 Camry, long the top-selling car in the U.S. Toyota has said the Camryâs new underpinnings were designed four or five years ago, and the factory upgrade is needed to build the new car, which goes on sale late in the summer. The 2018 Camry features a new exterior design, an upgraded interior and a new engine. The plant recently added more than 700 workers to support its launch.
âThe (production) line itself is being retooled to accommodate this change,â Toyota spokesperson Scott Vazin said.
Toyota is betting that the changes will solidify Camryâs premier sales position. That dominance is under threat from the popularity of SUVs.
âWhen the 2018 Camry hits the roads later this year, Iâm convinced that it will have heads turning,â James said Monday.
The automaker said the plans call for updating equipment at the Kentucky plant to streamline production and for construction of a new paint shop.
James said the upgrades will position the plant âto compete globally for new models, build ever-better cars for our customers now and enable us to respond quicker and more capably to market demands.â
The investment follows the automakerâs decision in 2013 to spend $530 million in the plant to begin building the luxury Lexus ES 350 in Kentucky.
Last year, the Kentucky plant produced more than 500,000 vehicles.
State and local officials attended an event Monday at the Georgetown plant to celebrate the automakerâs investment.
Kentucky Gov. Matt Bevin said Toyotaâs investment is âfurther proof of their commitment to producing American-made cars.â
âThank you for this investment,â Bevin said. âWords donât even begin to fully express the gratitude that the commonwealth of Kentucky has for Toyota, for your investment, for your partnership.â
Kentucky economic development officials sweetened Toyotaâs existing incentive agreement with the state as a result of its latest investment.
State officials added up to $43.5 million in tax incentives, making Toyota eligible for up to $190 million in incentives that span multiple projects. The performance-based incentives allow Toyota to keep a portion of its investment through corporate income tax credits and wage assessments by meeting job retention and new capital investment targets, state officials said.