In the next few weeks, Toyota Motor Corp. is expected to announce the location of a $1.6 billion U.S. auto assembly plant that will spark the economy of the geography around it for a decade and beyond.
Auto plant construction projects do that. But what Toyota and its project partner, Mazda Motor Corp., are planning is certain to trigger investment activity far beyond the immediate plant.
The reason is that Toyota is reimagining its global portfolio, creating lighter, easier-to-build vehicles with new advanced features and powertrains. It also is now scrambling to bring electric vehicles to market — in association with Mazda, and also possibly Subaru — although Toyota officials maintain that EVs are not part of the immediate plant project now in the works.
The proposed assembly plant will build Toyota Corollas starting in 2021 as well as an all-new Mazda crossover.
Consider the chain reaction in Toyota's North American manufacturing network:
A move to lighter vehicle architecture suggests that any new assembly plant must also stimulate supplier investments in production lines for parts made of aluminum, advanced steel or carbon fiber.
The plant's mission to supply the next-generation Corolla also signals that Toyota must be considering future investment plans for its existing vehicle plant in Blue Springs, Miss., where it already sources the Corolla. The Mississippi plant could be in line for a new role once the more modern Corolla plant is up and running.
Also unclear still is how Toyota will source its future EVs in North America once it moves to that stage. Neither Toyota nor Mazda is in the EV segment yet, so entering will require new local supplier solutions.
Last year, the company's top North American purchasing chief, Robert Young, told Automotive News that his team was studying the industry to identify the EV supply chain it will need when the time comes. At the top of that list would have to be batteries — a component that could require a huge capital investment in manufacturing.
As 2018 began, two specific sites had emerged as the likely finalists: 1,252 acres in Greenbrier, Ala., and nearly 1,900 acres near Greensboro, N.C.
The northern Alabama location sits amid a cluster of Toyota operations. One of Toyota's two U.S. engine plants is nearby in Huntsville, while the Blue Springs Corolla plant is a two-hour drive west. Toyota has key suppliers and subsidiaries a short drive north in Tennessee.
The site in North Carolina, if selected, would represent a new auto-industry chapter. There are no other auto assembly plants in North Carolina, and there is relatively little auto component production there compared with other Southeastern states — notably South Carolina and Tennessee.
North Carolina officials are hotly pursuing the Toyota plant to finally put the state on the automotive map.
Auto plant projects like Toyota and Mazda's are coveted prizes for state and local governments, primarily for the jobs they create. The plant in question is expected to directly employ 4,000.
But considering the ripple effect it will create, those jobs are just the beginning.