A newspaper report in the US gives an idea of just what state and local authorities will do to keep a valued large automaker employer happy.
The Huntsville Times in Alabama said Toyota would get nearly free use of 134 acres to expand its engine plant at the city-owned North Huntsville Industrial Park.
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An incentive package approved by the city council last week calls for the city’s Industrial Development Board to lease Toyota the rolling property – valued at US$6.7m – for a dollar a year.
Toyota has a 10 year option to buy the property for $2, but may prefer to lease the land for tax purposes.
In addition, the city will seek a $150,000 state site development grant and ask Huntsville Utilities to give Toyota an “investment initiative” credit worth $974,000.
Meanwhile, Madison County has promised a $250,000 economic development grant and $100,000 worth of site preparation work on Toyota’s planned V6 engine production line, the paper said.
Toyota Motor Manufacturing Alabama announced plans in May to construct an additional 300,000 sq ft of production space for V6 engines. The $88.3m expansion – the company’s fourth since coming to Huntsville in 2003 – is expected to create 126 new jobs, pushing total employment to around 1,150.
Mayor Tommy Battle told the Huntsville Times he expected the new jobs to pay from $45,000 to $50,000 annually.
“Toyota has a $60m economic impact on our community year in and year out,” Battle said. “They’ve been a good corporate neighbour – the kind of company you like to keep in the area.”
The expansion will allow the factory to produce 3.5-litre V6 engines for Highlander models assembled at a plant in Princeton, Indiana.
Jim Bolte, president of Toyota Motor Manufacturing Alabama, told the city council before last week’s vote that construction could start in late August or early September. The first V6 engines are expected to roll off the assembly line in the spring of 2014.
“I’m already working with our global headquarters on our next expansion,” said Bolte.
The state has agreed to provide over $6m in incentives for Toyota’s V6 engine expansion, including $1m for capital costs incurred by the company in developing, constructing and equipping the facility, $400,000 for industrial access roads and $4.8m for job training.
As part of the city’s commitment, Toyota has an option to purchase an additional 173 acres in North Huntsville Industrial Park for $10,000 an acre – a significant discount from the $50,000 an acre market price.
Putting things in perspective, Battle said the incentive package was far less than the $158.5m that the state, City of Mobile, Mobile County Commission and Mobile Airport Authority shelled out this month to land an Airbus assembly plant.
“We’re getting a deal,” said Battle.
Toyota’s Huntsville plant produced the company’s first V8 engines made outside of Japan. It’s the only Toyota plant in the world to produce four-cylinder, V6 and V8 engines under one roof.
The expansion will bring the company’s total investment in Huntsville to more than $700m, the local paper noted.
