foolmenot.comI know decisions Toyota makes are solely based on business interests. In this regard, it has not been particularly clear why Toyota was establishing a presence, indeed considering expansion, in the heartland of automotive unionism, Michigan. Now it all makes sense with this excerpt from the article below.
Japan's leading automaker is considering Michigan because Toyota wants to avoid trade friction within the industry, and believes a plant could ease the unemployment created by slowing sales in the U.S. auto industry, the newspaper reported.
With this statement, Toyota is concerned that public perception of their growing dominance in the industry may affect car sales, in some regard. This is especially true because Toyota is expected to take over the #1 slot from General Motors in 2006. An announcement that Toyota was opening a large manufacturing plant in Michigan would soften that blow. The reason Toyota would not go right to the heart of resolving this dilemma, which is opening a plant in Detroit, is contained in this next excerpt where they reference union influence;
Toyota's top executive in the United States told Japanese business daily newspaper Nihon Keizai Shimbun the company is checking out sites in Michigan that are less prone to union influence.
Politically speaking, this article dispels any notion that Governor Granholm had something to do with Toyota considering Michigan. Rather, it proves she did not, that she became aware of Toyota’s interest in Michigan and took advantage of an opportunity… Hello Alabama-- Is this another part of her track record gone awry? You decide!
Full article follows…
Company checking possible plant sites less prone to organized labor
Wednesday, December 28, 2005
BY JULIA BAUER
Ann Arbor News Bureau
GRAND RAPIDS - If Toyota Motor Corp. chooses Michigan as home for a new engine-transmission plant, the western side of the state has an edge: its distance from Detroit.
Toyota's top executive in the United States told Japanese business daily newspaper Nihon Keizai Shimbun the company is checking out sites in Michigan that are less prone to union influence.
The engine-and-transmission plant would be built within three years, and Michigan is among candidates for it, Toyota USA President Hideaki Otaka told the newspaper.
Otaka noted the state's sluggish economy and stubborn unemployment rate, which was 6.6 percent in November compared to 5.0 percent nationally.
The company has concerns about the presence of the Michigan-based United Auto Workers union, which is associated with higher labor costs, the newspaper reported. But outside Detroit, the influence of the UAW is weaker, Otaka told the newspaper.
Beleaguered General Motors Corp. and Ford Motor Co. are preparing to close more plants and trim about 60,000 jobs the next five years. Meanwhile, Toyota is opening a pickup truck assembly plant in Texas and is also building a plant in Canada.
Japan's leading automaker is considering Michigan because Toyota wants to avoid trade friction within the industry, and believes a plant could ease the unemployment created by slowing sales in the U.S. auto industry, the newspaper reported.
At a directors' meeting in California earlier this month, top Toyota executives mulled their strategy for growth.
Michigan officials ranging from Gov. Jennifer Granholm to local economic development groups are working to encourage Toyota to expand in the state.
Granholm went to Japan last summer, making the case for Japanese automakers to build here.
An engine plant would require a site of 200 to 400 acres, said Dennis Cuneo, senior vice president of Toyota USA. It would need good, reliable access to water, sewer, heavy-duty electric service, and natural gas, all at a reasonable cost.
The ideal site also would have no big environmental problems, "like wetlands, graveyards, or oil wells,'' he said.
What Cuneo could not say was whether West Michigan is in the running for the new plant.
"We're going to have to expand our engine capacity someplace, whether it's an existing plant or a new one,'' he said. If the vote is for a new site, "we would certainly be open to Michigan,'' Cuneo said.
Locally, Toyota has a major research operation in the Ann Arbor area, employing about 700 people. It also plans to build a new engineering and R&D center in York Township just south of Ann Arbor, which would initially employ 400 workers.
Toyota's other engine plants are in Kentucky, West Virginia and Alabama.
"One of the advantages Michigan has is that it has been skilled in automotive for 100 years,'' Cuneo said.
Until the deal is done, officials at Grand Rapids-based The Right Place Inc. economic development group can't say how the area stands with Toyota, said Ray DeWinkle, vice president.
"Maybe Detroit is not where they want to be, but anywhere else in state, we can build a pretty compelling case,'' he said.
"Obviously, we would welcome any Toyota investment anywhere in the state of Michigan.''