Dive Brief:
- In a ceremony capped off by an industrial robot removing the first shovel of dirt from the site, Toyota and Mazda executives, along with Alabama Gov. Kay Ivey and other state and local officials, broke ground recently on the automakers’ $1.6 billion joint production plant in Huntsville, Alabama. Toyota will assemble a new Corolla model there, and Mazda is expected to manufacture a new crossover vehicle.
- Once construction is complete, the Toyota-Mazda facility will be the fourth auto assembly plant in Alabama and will add a projected 300,000 vehicles to the 1 million cars produced in the state each year. In addition to the temporary construction jobs, the new facility, which should be complete in 2021, will also provide approximately 4,000 permanent positions. The new plant is only a few miles from a Toyota engine plant that has seen $1 billion worth of expansions.
- In addition to the plant, Toyota and Mazda have also donated $750,000 to local STEM (science, technology, engineering and mathematics) programs, including $500,000 to the Huntsville Madison Chamber Foundation for a new online platform that will promote careers in manufacturing and $250,000 to be split among local schools for STEM and career technical programs.
Dive Insight:
In June, Michigan-based Ghafari Associates, which has local offices in Birmingham, Alabama, announced it had won the contract to provide architectural and engineering services for the plant.
Alabama has also been very generous to Toyota and Mazda. According to a Bloomberg report, the automakers will receive $700 million of incentives to build the plant in Huntsville, $380 million from that state and $320 million from local agencies. The money will flow to Toyota and Mazda through a new state law that allows the abatement of ad valorem taxes typically assessed when farmland is converted to higher-value uses, a break on local property taxes, state investment and job tax credits, as well as assistance with infrastructure around the plant.
Typically, states are eager to draw in new manufacturing operations because they boost local economies during the construction and operation phases and create lots of jobs. Thanks to several large projects, new construction starts in the manufacturing category jumped 189% from September to October, according to Dodge Data & Analytics. Projects Dodge is tracking include a $2.4 billion propylene oxide and tertiary butyl alcohol plant in Channelview, Texas; a $1.6 billion natural gas processing plant in Douglas, Wyoming; a $400 million wood products plant in Lexington, North Carolina; a $400 million natural gas processing plant in Watford City, North Dakota; and a $320 million biofuel refinery in Lakeview, Oregon.
