A year ago, President-elect Donald Trump criticized Toyota and threatened hefty tariffs against the Japanese automaker if it built its Corolla sedan for the U.S. market in Mexico.
"Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax," Trump posted on Twitter in early 2017.
Toyota and Mazda announced plans for a new plant in August. Toyota said it would shift production of Corollas from Canada to the new venture rather than in Guanajuato, and would build Tacoma pickups in Mexico instead. Mazda plans to build new crossover SUVs at the plant.
Trump praised the joint venture announcement, saying in August on Twitter: "Toyota & Mazda to build a new $1.6B plant here in the U.S.A. and create 4K new American jobs. A great investment in American manufacturing!"
In October, Toyota said it would scale back investment in a planned plant in Mexico by 30 percent to $700 million and cut planned annual capacity in half to 100,000 vehicles as it shuffles its production plans to meet market demands.
Toyota has 10 U.S. plants in eight states in an arc running from West Virginia through Kentucky, Indiana, Alabama, Mississippi and Texas.
Toyota and Mazda announced a capital alliance in August and are exploring joint development of technologies for the basic structure of competitive electric vehicles.
Over the last 30 years Toyota, along with German and Asian automakers, has built a second auto industry in the United States, rivaling the operations of the Detroit 3 automakers in size and employment, but with newer, and fewer unionized, plants.
States covet auto assembly plants because they typically pay above-average wages and spin off jobs at suppliers and service companies. Southern U.S. states have the advantage of good transportation infrastructure, business-friendly regulators and generally anti-union politicians.
The Alabama Department of Commerce shows 150 of the large automotive suppliers operate in the state, providing the logistical strength that Kristin Dziczek, a researcher at the Center for Automotive Research in Michigan, said helped land the plant.
Dziczek said that Alabama in 2017 was tied for fifth among U.S. states in auto production, at 9 percent with Tennessee. It was behind Michigan at 19 percent; Indiana at 12 percent, Kentucky at 11 percent; and Ohio at 10 percent.
"The impact of an auto assembly plant extends beyond its immediate economic impact, and that's why states offer robust incentives," said Dennis Cuneo, a site-selection consultant and former Toyota executive. "It creates a halo effect that in turn helps attract other projects."
Alabama spent an estimated $250 million to woo Daimler AG's Mercedes-Benz to put an auto plant in Tuscaloosa two decades ago.