Sluggish market conditions in the United States are the reason Toyota Motor Corp. is slowing down the launch of its new Highlander crossover plant in Tupelo, Mississippi. Originally scheduled to open in late 2009 with production at 150,000 vehicles per year, Toyota will instead begin production in May 2010 with an expected reduced annual output of 120,000 units a year. Of course, that number will increase if U.S. market conditions improve.
While the slowing economy is a leading reason for the delay, Toyota officials also confirmed that they are facing difficulty hiring skilled labor for the Tupelo project. They are now recruiting from around the country to fill positions in maintenance, along with tool and die engineers. Toyota expects to employ 2,000 workers at Tupelo. This isn't the first time Toyota has faced recruiting issues. When they opened San Antonio in 2004 and 2005, they found themselves challenged to staff the Tundra pickup plant. The Texas plant recently made headlines when Toyota slowed production of the Tundra. For the fiscal year, Toyota is forecasting operating profits to decline by 29-percent.
[Source: Automotive News, subs. req'd]
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Reader Comments (Page 1 of 1)
Tricky dicky @ May 13th 2008 4:53PM
Interesting.. We see Porsche, Kia, Alfa, Audi, VW saying it is a good time to build with the low dollar..
I would have thought Toyota could mitigate their risk of yen fluctuation by perhaps alotting production of any of the scions, prius, yaris, 4runner, fjcruiser or highlander here.
I guess that only applies to all the other companies.
Vetmstr @ May 13th 2008 5:07PM
wow u guys are extra late with this info.
psarhjinian @ May 13th 2008 5:16PM
Toyota's issues are very different from those of a low-volume make like Alfa, Audi or Porsche. Plus, Toyota has a few years of "on the ground" experience in the US and knows the challenges; the others you mention haven't so much as broken ground while Toyota is pretty far along the curve already.
Getting suppliers and employees to commit, possibly on contract, in an uncertain market is more difficult than when those suppliers have the resources to float a project.
This is a credit-crunch issue: Toyota and potential especially it's suppliers/partners are likely unable to raise easy capital to cover startup costs in such a situation. Yes, Toyota could probably pull a "cash or cheque?" but their suppliers might not have capital to do so. Also, most businesses, even large ones with fat piles of cash, will often finance ventures like this for a number of reasons, not the least of which is to maintain said fat piles of cash.
Tricky dicky @ May 13th 2008 5:24PM
psarhjinian - VW is looking at building and aims to be the largest manufacturer in the world.
As well, to me low volume manufacturers would likely have greater startup capital issues - cheaper by the dozen, but lack thereof.
toyota announced yesterday that they are looking at launching a prius FAMILY, with no plans thus far to build in north america.
Their stated (bs) goal (from an autonews article last year) was about 65% of their cars sold here in NA built here. They are at 55% as of this year april end.
Honda almost 75% made here, Nissan almost 72%. But I guess Toyota is different from everyone.
psarhjinian @ May 13th 2008 11:35PM
That's just it: VW is "looking" or "planning" to build cars in the US. Toyota is already here, and has been for a while, and is actively building and running several plants. That's a big difference: VW can say anything, but until they actually start doing something, it's all talk.
Tricky dicky @ May 14th 2008 10:50AM
therein lies my point with Toyota. Their lofty goals of 65% are just talk, and a year ago their talk of 4 new plants in North america has turned into nothing but wind..
With respect to VW I guess we'll watch here for their confirmation and pop the bubbly in the comments section then - while Toyota revs up the war machine everywhere but here.
Johnny @ May 13th 2008 5:44PM
If you guys remember 2 years ago Jennifer Granholm the governor of Michigan went to Tokyo wore a Kimono and made a plea to open a factory in Detroit. The Japanese bosses were so pleased and humbled they promised they would.
They showed up in Detroit 5 months later looking for real estate and they encountered 600 barrel burning, flag bearing, rock throwing UAW people everywhere they went.
They got scared and left for Mississipii. Granholm later that evening blasted the locals for ruining their chance of bringing a huge plant to Michigan.
Now 3 years later rather than having a skilled workforce in Michigan they have to scrap together some workers in Mississippi.
So sad.
Here are some links for you:
http://www.michigan.gov/gov/0,1607,7-168-23442-115385--,00.html
http://www.youtube.com/watch?v=XJqbYREp6pU
http://www.autoblog.com/2005/12/29/toyota-avoiding-unions/
elprogramer @ May 13th 2008 6:31PM
IIRC, they already have R&D here (around Ann Arbor) and most of those jobs aren't union anyway.
Don't get me wrong, 700 jobs would've been nice, but it was a token effort at best.
Corey W. @ May 14th 2008 8:48AM
But it was a start, who knows what it could have lead to...