In a bid to cut parts transportation costs, a Toyota Motor Corp. affiliate said today it will invest $57 million to build a seat frame manufacturing plant in Princeton, Ind.
The new plant will replace four other North American Tier 2 seat frame factories that currently supply seat components for the Tundra pickups, Sequoia SUVs and Sienna minivans that Toyota assembles in Princeton.
Interiors supplier Toyota Boshoku America Inc. will take over frame production at the new plant beginning in 2010, according to Dennis Cuneo, a former Toyota executive who now works with Boshoku and other affiliated Toyota suppliers as a consultant.
Cuneo declined to identify the current U.S. supplier, or suppliers, of seat frames that will be replaced, except to say they are Japanese-owned suppliers.
He said the move will not force the existing frame supplier to shut down. Were working with them to find something else, he said.
This was not about quality issues or anything like that, he said. Its about improving our logistics costs.
In one case, the Princeton seat frames were being shipped from hundreds of miles away, he added.
Toyota wants to consolidate its interior business around the world to improve costs and better protect itself from supplier uncertainties. Three years ago, it formed Toyota Boshoku as a global interior systems maker by merging three of its affiliated interior parts suppliers.
Boshokus new Indiana plant will employ 230 people, and will be constructed adjacent to Total Interior Systems - America, Toyotas Tier 1 seat supplier in Princeton. Total Interior Systems is a joint venture that is 61 percent owned by Toyota Boshoku and 39 percent by Lear Corp.