COVER STORY, JUNE 2007

TOYOTA COMES TO TOWN
Mississippi welcomes Japanese auto manufacturer.
Daniel Beaird

Blue Springs, Mississippi, is about to find out what Georgetown, Kentucky, found out 20 years ago. When Toyota comes to town, people sit up and take notice. Toyota officials have chosen a 1,700-acre site, known as Wellspring, in Blue Springs, population 150, to build its eighth North American vehicle assembly plant and fifth vehicle assembly plant in the United States. The news couldn’t have come at a better time for northeast Mississippi as Sara Lee Corporation has recently announced it will close its pork products plant located 50 miles south of Tupelo, Mississippi, and lay off 1,200 workers.

Located just outside of Tupelo, the $1.3 billion Toyota plant will have the capacity to build 150,000 vehicles annually of Toyota’s Highlander sport utility vehicle and employ 2,000 people. Production is scheduled to begin by 2010 and it will be the first North American site to produce the Highlander model. Once production begins, Toyota will have the capacity to produce approximately 2.2 million cars and trucks annually in North America. 

The site on which the car manufacturer will be located was created by the PUL Alliance, a partnership between Pontotoc, Union and Lee counties, and is located adjacent to Interstate 22 (U.S. 78) near the Blue Springs interchange. The site is 10 miles west of Tupelo and 76 miles southeast of Memphis International Airport. Working together through the PUL Alliance, the three counties shared the expense of land for development.

Blue Springs is located in northeast Mississippi’s Union County, in which New Albany, Mississippi, serves as the county seat and has a population of approximately 8,400. That number is similar to what Georgetown, Kentucky’s population was 20 years ago when Toyota came to town. Today, Georgetown is a town of approximately 20,000 people due to Toyota’s influence. Since the opening of Toyota Motor Manufacturing, Georgetown’s employment has risen, and its city, county and school systems have prospered.

New Albany has the goal of reaching 15,000 in population. “We want to use Georgetown’s model of success with the opening of Toyota here,” says Tim Kent, mayor of the city of New Albany. “Georgetown was the same size as New Albany when Toyota located there and it saw an immediate economic impact in the first 5 years. After that sustainable 5 year period, its population started to grow tremendously as people began to move in.”

According to some in Georgetown, northeast Mississippi must have zoning plans for successful growth that comes relatively quick with the car manufacturer. The location of a Toyota plant in Georgetown stimulated growth immediately. “We are ready for that,” Kent says. “We might not grow as large as Georgetown, but we are prepared.”

With Toyota’s designs on making its northeast Mississippi plant the first to produce the Highlander model, that will bring in more suppliers than the usual Toyota plant. “We are already pursuing many suppliers that can be connected to the plant,” Kent says. “It’s a unique plant in that Toyota wants to establish itself even more so in the United States by bringing the production of the Highlander here.”

Toyota has a proven track record of boosting the local economy during and after building a plant. The car manufacturer has a goal to spend 15 percent of the construction budget for Toyota Mississippi with local minority-owned business enterprises.

“Toyota definitely gives back,” Kent says. “They made a surprise announcement at the plant’s groundbreaking in that they will give $50 million to local school systems in northeast Mississippi.” Toyota has a track record of helping local schools as it has a vested interest in employing those children in the future. Most of Toyota’s jobs require some technical skills and they pay relatively well.

Union County wanted to grow and targeting a manufacturing plant was the plan of choice. “If we were going to target any plant, it was going to be Toyota,” Kent says. The Japanese car manufacturer has grown rapidly in sales in the United States during the past 20 years and aims to make itself an almost American company.

“They are building more vehicles in the United States than General Motors now,” Kent says. “That good stability and growth model was something that we targeted as we searched for a company to help Union County grow.”

And Union County is growing. “We expect to see and are seeing more developers developing building sites around the plant and investors purchasing land around the plant,” Kent says.

Not only has Toyota announced plans to build in Union County, but it is also growing across the country as it opens plants in San Antonio, Texas, with the production of the Toyota Tundra and Lafayette, Indiana, with the production of the Subaru.

With Toyota’s aggressive growth in the United States, it chose Union County, Mississippi, over other sites like Marion, Arkansas, which lost out for a second time for a Toyota plant, and Chattanooga, Tennessee. Blue Springs won out over those two cities, which were at one time believed to be the frontrunners. “On our visits to northern Mississippi, we talked with area companies and observed their workforce,” says Ray Tanguay, an executive vice president of Toyota Motor Manufacturing North America. “We observed people who were educated, ethical and friendly with a strong work ethic, which was a perfect match for the Toyota way.”

“We are excited to do business in Mississippi,” Tanguay says. “Governor Haley Barbour and the economic development team were very convincing and unrelenting in their efforts to showcase the area’s advantages.”

Many companies are focused on incentive packages and what a local municipality can give the incoming company. However, Toyota seems less interested in the quantity and the amount of incentives than other companies. For example, Marion, Arkansas’ incentive package was top notch, but Toyota was more interested in its air quality, which sunk its chances. Due to what Marion claims as its proximity to Memphis, Tennessee, it was declared out-of-compliance with federal standards in 2004. Toyota executives were concerned by a federal appeals court’s decision that struck down a federal government strategy for reducing smog as too weak.

Excavation at the Blue Springs site began in March and site preparation began in May. It is expected that 2,000 construction workers will be on site during the peak of construction in summer 2008. Most of those construction workers will be hired locally.

When complete, the Toyota plant is expected to create a total of 10,000 jobs  including those created by suppliers and other ancillary businesses working with the plant.


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