After announcing a partnership back in August, Toyota and Mazda have settled on a location in Alabama to build a new $1.6 billion production facility, according to Automotive News. The move follows an industry trend of shifting or keeping automotive production stateside.
Here’s the gist of the report from Automotive News:
Alabama will be the site of a new $1.6 billion Toyota Motor Corp. and Mazda Motor Corp. auto plant, a victory for President Donald Trump who has prodded manufacturers to build new U.S. factories and threatened tariffs on foreign production, sources said on Tuesday.
The plant, which will employ up to 4,000 people and produce about 300,000 vehicles a year, will be located in Huntsville, Ala., and is a boon for the state, where Toyota has a large engine plant and an existing network of automotive suppliers.
Reports from local Alabama outlets, including Alabama.com, also indicated the new plant may be built near Toyota’s engine production facility in Huntsville, Alabama.
It’s unclear how much influence President Donald Trump had on Toyota and Mazda’s decision, following a series of tweets and public comments shaming and threatening automakers including Toyota, Ford and General Motors for plans to build factories and produce vehicles outside of the U.S. However, the two companies’ plans to build the new plant in the U.S. does follow a trend of automakers shifting plans to at least sustain U.S. production.
As Automotive News also pointed out, this new production facility, which has been in the works for months, if not for over a year, does come at a time where U.S. auto sales are slipping into decline. This could lead to increased pressure on companies to maintain careful levels of inventory and seek to cut costs.
Back in November, Bloomberg released a video that had been circulated at Toyota’s Georgetown, Kentucky facility from the plant manager, warning employees of the risks associated with failing to cut costs. The video emerged just seven months after Toyota announced it would be investing $1.33 billion into upgrading the Georgetown plant.
Toyota acquired a 5-percent stake in Mazda, and Mazda acquired a 0.25-percent stake in Toyota back in August, when plans for the new plant were announced. Automotive News reports that a formal announcement of the Alabama location will be made by the companies in Montgomery tomorrow.