Toyota Motor Corp. will shift more production of its four-cylinder engines from Japan to Alabama, in a move that takes advantage of excess engine-making capacity at a U.S. factory.
Toyota will spend $147 million to add 216,000 four-cylinders a year to the mix at Huntsville, Ala., where it already makes V-6 and V-8 light-truck engines. Toyota will hire 240 workers as part of the expansion.
The four-cylinder engines will go into Camrys built in Indiana and RAV4s assembled in Woodstock, Ontario. The engines for those models have been coming from Japan until now.
Toyota is attempting to cut $9.42 billion in global costs in the current fiscal year that began April 1. It posted a net loss of $7.7 billion for the January-March quarter, a result exacerbated by a steep rise in the yen's value against the plummeting dollar.
The exchange-rate shift makes building engines and other components, as well as vehicles, in the United States more attractive.
At the same time, Toyota is sitting on excess North American factory capacity. The Huntsville plant was built to produce V-8 engines for full-sized Toyota Sequoia SUVs and Tundra pickups. The collapse of those segments prompted Toyota to merge two V-8 engine lines at Huntsville, leaving a part of the plant unused.
Both Toyota and Nissan Motor Corp. have struggled to free up additional North American capacity for smaller engines as consumers shifted to more fuel-efficient vehicles over the past year and a half. Toyota recently boosted four-cylinder Camry engine production in its Georgetown, Ky. plant by making layout changes to an existing assembly area.
The new investment at Huntsville also will require Toyota's Bodine Aluminum Inc. subsidiary to expand output of engine heads and blocks at Troy, Mo.Bodine will invest $25 million and hire about 60 new employees.