Greensboro is in the race for a big Toyota plant
Four Southeastern cities are contending for assembly plant that could bring up to 2,000 jobs, reports say By Richard Craver
JOURNAL REPORTER
Tuesday, April 18, 2006

Greensboro has been identified as a potential site for a Toyota Motor Corp. assembly plant, according to news reports, but the community faces competition from at least three other Southeastern areas.

The New York Times reported Saturday that Toyota was considering Greensboro, along with Roanoke, Va., Chattanooga, Tenn., and northeast Arkansas for its eighth North American assembly plant and 15th automotive plant in the hemisphere.

Analysts said yesterday that they expect Greensboro will be a major contender for the plant because North Carolina has become much more aggressive in its economic-incentive packages since losing Mercedes-Benz and BMW to Alabama and South Carolina, respectively, in the early 1990s.

"We're still in the studying stage, but we have been going out looking at potential sites, a sizable number of sites," said Dan Sieger, a spokesman for Toyota Motor Manufacturing North America Inc. in Erlanger, Ky. Sieger would not confirm or deny the sites.

Another possible consideration for Toyota is expanding an $800 million plant set to open this summer in San Antonio, Texas. The city beat out in 2003 sites in Alabama, Mississippi and Tennessee to build Tundra full-size trucks, according to the San Antonio Express-News. Toyota is eligible for at least $133 million in incentives for the San Antonio plant.

The article said that Toyota could make a decision by this summer and open the plant late in this decade.

A Toyota assembly plant would probably need at least 1,000 employees and could require 2,000, said John H. Boyd, the president of The Boyd Co. Inc., a site-selection company in Princeton, N.J. He said that the average wage for a U.S. automotive-production worker is about $40 an hour. Boyd said that a Toyota plant could also generate hundreds of supplier jobs on site and in the region.

The Times said that Toyota executives are trying to determine how many additional plants the company would need to capture 20 percent of the U.S. car market, or second to General Motors Corp.

"As sales have been growing in the United States, there's a lot of speculation about Toyota adding capacity for engine production, automotive production or both," Sieger said. "Sales ultimately will be what determines our plans for another plant."

Dan Lynch, the president of the Greensboro Economic Development Partnership, and Don Kirkman, the president of the Piedmont Triad Partnership, said they could not discuss any active projects.

But they agree that the state is much better prepared to recruit an automotive manufacturer than it was in the early 1990s, and not just because of its recent willingness to offer staggering incentives packages to Dell Inc. and The Boeing Co.

Dell is eligible for up to $267 million in state incentives over 15 years for its computer-assembly plant in southeastern Forsyth County. The Raleigh News & Observer reported that North Carolina was willing to commit $534 million in incentives to Boeing. Boeing decided to build the plant in Everett, Wash.

"We have a strong transportation system, a strong manufacturing work force and a comprehensive work-force training system with an advanced manufacturing component to offer," Kirkman said.

Lynch said that one potential hurdle for North Carolina is a limited choice of large tracts of land.

Michael Walden, an economics professor at N.C. State University, said that a state incentive offer to Toyota could exceed the Dell package of up to $17.8 million each year of the deal.

"I think North Carolina is a serious candidate," Walden said. "We've been a bridesmaid many times in the search for an auto manufacturer.

"Despite the public flak over Dell, etc., an auto plant is such a 'crown jewel' that the excitement and positive publicity over it would, I think, generate support for a generous incentives package."

Such a level of support would be in great contrast to when the state was recruiting Mercedes-Benz and BMW in the early 1990s. At that time, the state's economy was considered strong enough by many economic leaders that they didn't believe it was necessary to offer aggressive incentive packages.

Former Gov. Jim Hunt said in a July 2005 interview with the Winston-Salem Journal that Mercedes executives told state officials that the project would not be driven by incentives and that it viewed the state's business and educational climate favorably.

"But it proved to be driven by incentives and we were outbid," Hunt said. "We knew then that we were not competitive in incentives and didn't have the tools to attract highly capitalized companies that offered the potential for industry clusters."

Dan Hobart, a spokesman for the N.C. Commerce Department, said that the state's grant and tax packages, which include the William S. Lee business grant, the One North Carolina Fund and the Job Development Investment Grant, have provided more flexibility in recruiting megaprojects.

Sieger, the Toyota spokesman, said that incentives are not the driving factor behind its plant decisions and that it typically does not go to the community that offers the largest amount.

Boyd said that northeast Arkansas could be the sleeper in the recruitment because it offers a mid-continent site. Virginia could be more limited in its attractiveness because it hasn't been as aggressive with incentives as its Southeast neighbors.

"Toyota realizes that a lot of issues that affect the company - trade, health care, labor/management - are dealt with at the federal level," Boyd said. "Putting a plant in North Carolina would give it the ears of two more senators and 13 more representatives. And it likes to operate in right-to-work states."

Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com

This story can be found at: http://www.journalnow.com/

Go Back