NASHVILLE, Tenn. - Toyota Motor Manufacturing North America Inc.'s truck plant in San Antonio likely will have suppliers operating on-site when it opens in 2006.
In a plan similar to rival Nissan North America's plant in Canton, Miss., Toyota hopes to incorporate key suppliers into its $800 million San Antonio plant, including an increased involvement from minority-owned suppliers.
Speaking at a meeting of Southern economic development officials here on Thursday, Aug. 21, Toyota Senior Vice President Dennis Cuneo said the decisions and supplier selections are not final. But he said, "It's probably going to happen. It's looking very good."
Cuneo declined to identify the minority companies with which Toyota is working, or the more established supplier companies that likely would be their partners.
The indications follow by just a week Toyota's announcement that it will create a supplier park at its pickup plant in Baja, Mexico, which has just started construction.
The decisions represent a shift by the automaker to integrate its North American suppliers deeper in the organization. Nissan took the same step in Mississippi, where suppliers assemble large modules on Nissan property and move them on conveyers to the vehicle assembly line.
Emil Hassan, Nissan senior vice president for North American manufacturing, purchasing, quality and logistics, says the arrangement translates into lower transportation costs, investment costs and operating costs."This is really the direction the industry is going," Hassan says.
Toyota apparently intends to use the same concept on the Tundra pickups that it will build at its 2,000-acre San Antonio site.
By choosing to manufacture in south Texas, Toyota faced higher logistics costs. San Antonio is far from the supply base that Toyota has built in the Kentucky-Tennessee area in the past 15 years. The company's only North American V-8 truck engine plant just opened 1,000 miles away in Huntsville, Ala.
"It's a cost savings to be able to put your big bulky items, like seats, right next door," Cuneo added. "And by next door, I mean it will go from the supplier on a conveyer right into the assembly line."