As Toyota and Mazda scour the US, Mississippi opens arms

[CHICAGO] As Toyota Motor Corp and Mazda Motor Corp begin to scour the US for where to put the first auto assembly plant announced under President Donald Trump, one state looks like a frontrunner: Mississippi.

The Magnolia State already is home to a Corolla factory that's been producing the compact car for almost six years. Toyota and Mazda plan to open a US$1.6 billion new facility to produce that model, plus a Mazda crossover, starting in 2021.

Hanging in the balance for states vying for the factory are 4,000 jobs that the two Japanese automakers expect to create through their joint investment. Locating the plant near Toyota's existing manufacturing site in Blue Springs would enable the two to source parts from companies nearby that feed components to the Corolla. A head-start on a supplier network would be particularly attractive for Mazda, which doesn't have a US plant.

"We do have supply lines in the US that are pretty extensive, particularly for the Corolla," said Scott Vazin, a Toyota spokesman. "We hope these supply lines can be utilized for this new entity, because there are clearly some efficiencies in it." One option would be to build the new plant in Blue Springs itself. Toyota's existing factory opened in 2011 as its sole US assembly location for the Corolla. Roughly half the site the company acquired before breaking ground in 2007 is still vacant, with roads and sewers already in place awaiting further investment.

Former Governor Haley Barbour and local governments lured Toyota to Mississippi with a US$358.5 million incentive package in 2007. Phil Bryant, who's been in the office since 2012, on Friday indicated he's prepared to do what it takes to land another plant.

"As Toyota embarks on its joint venture with Mazda, we stand ready to grow our existing partnership and strengthen Mississippi's standing as a global leader in automotive manufacturing," Mr Bryant said in an emailed statement.

Mississippi isn't a sure thing. Vazin, the Toyota spokesman, described the state of the project as "very early days." Jeremy Barnes, a US-based spokesman for Mazda, said the companies' intent will be to make the plant as efficient as possible.

Choosing a state where Toyota doesn't already have a plant would enable the company to broaden the base of political influence in the US Federal and state politicians where Toyota has manufacturing sites spoke up on the automaker's behalf after Mr Trump earlier this year attacked its plan to build a factory in Mexico.

"The remarks of the US president at the start of the year aren't related at all" to the decision to build the new US plant, Toyota President Akio Toyoda said at a joint press briefing Friday with Mazda chief Masamichi Kogai in Tokyo. "Taking into account competitiveness, demand, and getting the most from this joint venture, as well as the fact that we currently make the Corolla in Mississippi, we decided to consolidate production in the US."

Japanese automakers have typically built plants in a variety of southern US states to build a wider base of political support, said Alan Baum, an independent auto analyst in West Bloomfield Township, Michigan. The United Auto Workers has failed in many attempts to organize car factories outside the Midwest, including as recently as last week, when it failed to unionize a Nissan Motor Co facility in Canton, Mississippi.

"They could certainly go to Blue Springs, but they might decide they want to knock off another two US senators by picking a new state," Mr Baum said. North Carolina, Louisiana and Arkansas could be candidates, since they're states that don't already have a Japanese assembly plant, he said.

In a tweet Friday, Mr Trump called Toyota and Mazda's planned new factory "a great investment in American manufacturing." Toyota is still moving forward with the construction of a factory in Guanajuato, Mexico, though the facility will produce the Tacoma mid-size pickup instead of the Corolla.

Toyota is fairly spread out across the eastern half of the US, giving states other than Mississippi a shot to score the investment, said Kristin Dziczek, an analyst at the Center for Automotive Research who's produced reports for the automaker on its economic contributions in the U.S.

"Incentives are the icing on the cake that tips the scale from one state to another," Ms Dziczek said.

BLOOMBERG