Toyota’s Georgetown plant is gearing up for a $1.3 billion dollar infusion as the facility undergoes upgrades. The announcement comes after the state agreed to sweeten the company’s tax incentive package.
"This is the largest investment in our plant's history," Toyota Motor Manufacturing Kentucky President Wil James declared during a press event at the 1,300 acre facility Monday.
The new dollars represent the first phase of a $10 billion dollar investment plan Toyota is rolling out nationwide over the next five years. James said the money will be used to move the plant, Toyota’s biggest, onto a New Global Architecture as it begins producing the retooled 2018 Camry.
"It allows us to put flexibility in some areas that we didn't necessarily have flexibility before, so regardless of whatever happens coming down the pike with the needs from customers, we can be in a good place to be able to meet those needs," he added.
To help woo that investment, state officials made Toyota eligible for up to $190 million in new incentives – likely contingent on job retention and the nature of the investment, Gov. Matt Bevin said.
"What you'll find is that, like it has always been, Toyota frankly doesn't do this for the incentives," the businessman-turned-politician explained. "They do it because they believe in this community and it provides a good workforce. But we, like any state would, wants to make it as advantageous to them as we possibly can."
While no new jobs are expected as part of the investment, the White House requested an addition to the Toyota press release. In it, President Donald Trump describes the announcement as “further evidence that manufacturers are now confident that the economic climate has greatly improved under my administration."
Both Bevin and Georgetown Rep. Damon Thayer echoed the president's bullish view of Kentucky's economic prospects, in part because of the business-friendly legislation just passed through the General Assembly.
"We passed right-to-work. One week later, Amazon announces in Northern Kentucky that they're coming with a $1 billion dollar investment and as few months later here Toyota comes with a $1.3 billion dollar investment and I still think the best is yet to come," Thayer said.
Preparations for the newly-announced upgrades at Toyota have been years in the works, however. Questioned about the influence of Frankfort's recent legislative agenda, James offered a "general comment" as he pointed to the eye-catching 2018 Camry on display nearby.
"We've been working on that Camry that's out there in the visitor center for three years. That was well before any of this discussion. So, again, all part of our long-term strategy, and we're just trying to continue to move forward and position this plant so that it can remain the largest Toyota plant in the world," he said.
The Future Of Fuel Standards Under Trump
The head of Toyota Motor Manufacturing is also signaling the company remains committed to improving fuel economy despite indications that the Environmental Protection Agency could roll back efficiency targets.
In March, President Donald Trump ordered the EPA to review Corporate Average Fuel Economy, or CAFE, standards that mandate the auto industry deliver vehicles that average 54.5 miles per gallon by 2025.
Asked Monday whether relaxing that standard could influence the direction Toyota takes in designing future vehicles, James responded, "Energy efficiency and providing more MPG [miles per gallon] is something that we've been doing for years, with prior administrations. There are certain businesses practices that are just good business practices and regardless of who you have in office you need to do the right thing."
James prefaced that remark by saying the company’s interests align well with the president’s manufacturing agenda.
'The Best Year In Economic Development In The History Of Kentucky'
In addition to the recent investment news out of Amazon and Toyota, a so-called "mystery project" in eastern Kentucky appears closer to completion.
Details remain scant on the unnamed project Kentucky lawmakers put $15 million toward in the final hours of the 2017 session, but Gov. Matt Bevin told reporters Monday he hopes to make a formal announcement in next couple weeks.
"They have looked at multiple locations in multiple states, including multiple locations in this state, and they have narrowed it down to one location here in Kentucky. They have already told the other states that they are no longer in the running much to the dismay of those other states," Bevin said. "I understand some of some of them did not go quietly."
Bevin said the full project would be north of $1 billion, but declined to elaborate further. According to House Majority Floor Leader Jonathan Shell, the investment would provide 1,000 construction jobs and 500 permanent jobs.
Speaking to progress on the deal, Bevin said he’ll count the chicken when it hatches but that it’s “pecking its way out of the shell right now.” The governor did, however, suggest Toyota's announcement hints at the shape of things to come, predicting that 2017 will go down as the "best year in economic development and new capital investment in the history of Kentucky."
