DENNIS SEID: Why Toyota will, won’t open soon

By Dennis Seid/NEMS Daily Journal

Toyota will open its Blue Springs plant by 2012. Toyota won’t open the plant anytime soon, if ever.
Who – and what – do you believe?
The old rumor mill has been churning quite a bit the past few days about the plant. Reports of trucks rolling in and out of Toyota Motor Manufacturing Mississippi. Helicopters swooping down at the dead of night, delivering equipment.
The shutting down of the NUMMI plant in California on Thursday got the ball rolling for Toyota to get TMMMS open, supposedly.
The Corolla will be built here, so the whispers go. And if you’ll remember, a Japanese newspaper last summer reported that very same thing. It was quickly denied by Toyota.
But oh, yes, you’ve heard the same stories, too, haven’t you?
Like the “X-Files,” the truth is out there. Somewhere.
So when will Toyota open Blue Springs? Heck, I don’t know. But let’s look at why Toyota will open soon – and why it won’t be.

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Why it will open
It makes sense for plenty of reasons for Toyota to open TMMMS sooner rather than later.
The automaker has sunk more than $300 million of its own money into the project, which is expected to cost about $1.3 billion. The state has spent a couple of hundred million on infrastructure.
Walking away from the project would mean the company would have to repay all state and local money invested in the project.
The Corolla and the Prius, both built on the same platform, are among the best-selling vehicles in the U.S.
Plants in Canada and Japan can absorb Corolla production from NUMMI for the short term. Demand for the Prius still remains high, and Toyota’s plans to increase total hybrid vehicles sales to 1 million annually within a couple of years means capacity must come from somewhere.
Opening Blue Springs puts Toyota closer to engine suppliers in Alabama and West Virginia – much closer than California, Canada or Mexico.

Why Toyota won’t open soon
On the flip side, Toyota is in no position to open the plant anytime soon.
It’s received plenty of negative publicity from the recalls and from NUMMI closing.
Quality issues have been blamed on growing too quickly, something that company President Akio Toyoda has acknowledged. Opening a new plant won’t quiet the critics.
Besides, Toyota is, and has been, slowing production in several plants worldwide. That means over-capacity is an issue.

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So, consider the case for and against Toyota making a decision soon about Blue Springs, and form your own opinion.
Me? I’m still crossing my fingers.

Contact Business Editor Dennis Seid at (662) 678-1578 or dennis.seid@djournal.com.