L-R: Alabama Secretary of Commerce Greg Canfield, Mazda Motor Corporation President and Chief Executive Officer Masamichi Kogai, Alabama Gov. Kay Ivey, Toyota Motor Corporation President Akio Toyoda, Huntsville Mayor Tommy Battle, Limestone County Commission Chairman Mark Yarbrough. / Photo courtesy Toyota
CULLMAN – After this week’s announcement that Huntsville has been chosen as the site for a new, $1.6 billion, dual automotive facility that will house Toyota and Mazda production plants with a shared research center, attention quickly moved to the question of what this means for the local economy. The facility, scheduled to be running by 2021, is expected to create 4,000 new jobs.
The plant will make Alabama the fifth largest producer of automobiles in the United States. Mercedes-Benz, Honda and Hyundai manufactured more than one million automobiles in the state in 2016. Adding to those three, Toyota’s current Huntsville plant that produces engines for its north American vehicles, 1.7 million engines were produced here in 2016. Including parts suppliers like Cullman’s Topre, REHAU and Yutaka, the industry supports approximately 57,000 Alabama jobs and adds $9 billion dollars annually to the state’s economy.
Confusing location
Early reports by multiple news agencies offered confusing details, some saying that the facility would be located in the city of Huntsville and others saying it would be built in Limestone County. It turns out that they were both right.
The joint venture plant will be located on a Tennessee Valley Authority (TVA) “mega site” in a portion of eastern Limestone County that has been annexed into the city of Huntsville. TVA offers the following description of the site on its web page:
“The North Alabama region provides immediate access to major Southeast U.S. markets with the Huntsville, Alabama Mega Site located on Interstate I-65, a major North/South corridor connecting Chicago to the Gulf of Mexico. The site is also minutes from the Tennessee River with port access to the Gulf via the Tennessee Tombigbee Waterway. Travel times and trucking routes are convenient and provide access to the South’s growing automotive, aerospace and manufacturing markets.”
For more on the location of the plant, visit http://huntsvillemegasite.com.
Potential impact on Cullman County
With the facility being located on I-65, a straight shot from Cullman County, and with the Cullman area’s already established presence in the automotive parts industry through Rehau, Topre and Yutaka, the region is highly likely to benefit from the venture.
On Thursday, Cullman Economic Development Agency Director Dale Greer said, “I would certainly expect Cullman to experience supplier interest from companies looking for new production facilities to serve the Toyota Mazda facility. There will also be great potential for existing Cullman manufacturers to have an opportunity to expand production because of (Wednesday’s) announcement.
“Cullman has successfully recruited Tier 1 suppliers for Mercedes and Honda that are 100 miles away, so it stands to reason that a new OEM in Huntsville only 40 minutes north will offer us a lot of opportunities.”
Topre America has existing production contracts with Toyota, and REHAU is rumored to be in negotiations with Toyota as well.
Greer continued, “In addition to potential for new business for local manufacturers, Huntsville-Limestone County is an easy commute for Cullman County residents interested in employment there. Thirty percent of the local labor force drives out of Cullman for employment in other counties, and Toyota-Mazda are advertising a wage rate that will entice some of our people to commute.”
Greer pointed out that a construction project with a scope this size ($1.6 billion dollars) could translate into business for numerous general contractors, suppliers and other local vendors.
Greer concluded, “An entire region benefits economically from a project with the capital investment and job creation of an announcement like this.”
From the manufacturers
After the joint press conference on Wednesday featuring Gov. Kay Ivey, Mazda CEO Masamichi Kogai Mazda, Toyota CEO Akio Toyoda and Huntsville Mayor Tommy Battle, Toyota issued a press release, stating in part:
The new plant will have the capacity to build 300,000 vehicles annually, with production split evenly between two lines for each company to produce Mazda’s crossover model that will be newly introduced to the North American market and the Toyota Corolla.
The joint venture represents a $1.6 billion investment that Mazda and Toyota plan to make with equal funding contributions. The site for the new plant is in Huntsville, located approximately 14 miles from Toyota’s Alabama plant (Toyota Motor Manufacturing, Alabama, Inc.). The facility is expected to create up to 4,000 jobs. Production is expected to begin by 2021.
“The partnership between Mazda and Toyota will expand innovative automotive manufacturing in Alabama,” Gov. Ivey said. “Their decision to locate this new facility in Huntsville is a testament to the talented workforce in our state. We are proud that this partnership puts Alabama on the forefront of technology in this dynamic global industry."
“With this announcement, our world changes overnight,” said Tommy Battle, mayor of Huntsville. “Mazda and Toyota, two of the world’s most innovative automakers, have created a legacy project that will provide jobs for decades to come for Huntsville and Alabama. It vaults Alabama to the top as an industry leader in producing the next generation of cars that will power our nation.”
Mazda Motor Corporation President and Chief Executive Officer Masamichi Kogai and Toyota Motor Corporation President Akio Toyoda joined Gov. Ivey and Mayor Battle for the announcement.
For Mazda, the plant comes on line in a significant year that will mark the start of the company’s second century of operation and second half-century of sales in the U.S. The automaker is enhancing its commitment to the U.S. market and will focus efforts on manufacturing and increasing sales in the country.
“Mazda makes cars with a clear vision of how we want to inspire people, contribute to society and help preserve the beauty of the earth. By making such cars here in Alabama, we hope that over time our plant will come to occupy a special place in the hearts of our employees and the local community. By making this plant a vibrant part of that community, we hope to work, learn and grow together with the people of Alabama and Huntsville,” Kogai said.
For Toyota, this joint-venture plant will be its 11th U.S. manufacturing facility and represents its continued commitment in the U.S., in addition to the $10 billion dollar investment over the next 5 years that was announced in January 2017.
“Our investment to establish a new vehicle assembly plant with Mazda builds on the strong success we have enjoyed in Alabama where we produce engines for the North American market,” Toyoda said. “Starting from 2021, I’m confident that we will run a highly competitive plant, by bringing together the expertise of Toyota and Mazda as well as the excellent Alabama workforce. We are committed to being another ‘best-in town’ company in the city of Huntsville and the state of Alabama, a new hometown for Toyota and Mazda.”
For more information on Alabama’s automobile industry, visit http://www.edpa.org/key-industries/automotive/.
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