Business

Toyota, Mazda bypass NC for auto plant

Posted January 10, 2018 3:17 p.m. EST
Updated July 13, 2018 1:40 p.m. EDT

— North Carolina's search for an automotive plant to call its own will continue, as Toyota and Mazda officials announced Wednesday that they will build a $1.6 billion factory in Huntsville, Ala.

The plant is expected to employ 4,000 people and produce 300,000 vehicles a year for the two companies when it opens in 2021. Toyota plans to assemble the Corolla sedan there, while Mazda said it will use the factory to produce new crossover vehicles for the U.S. market.

A so-called "mega-site" near the Guilford-Randolph county line was a finalist for the operation, and although North Carolina officials were bitterly disappointed they couldn't reel in the whale of all economic development projects, they had already turned the page by Wednesday afternoon and were looking toward landing the next project.

"North Carolina has been the choice for many global manufacturers this past year, and while we wanted to get this one, we know this site will be perfect for another," Gov. Roy Cooper said in an email. "We have the workforce, the great quality of life and a fantastic business climate, and we will keep working."

"I am already moving forward and contacting people and working with the team on getting prepared for the next one," state Commerce Secretary Tony Copeland said. "We have to continue to try. We'll miss some more, but we're going to get a lot more."

"I'm very disappointed. I feel like, though, the Lord has something better for us? Tesla maybe?" said Rep. Pat Hurley, R-Randolph. "Maybe we'll talk them into it. I tried talking to them Monday at our transportation committee meeting, so I still have hope and faith that we will get something good for that site."

The state has tried for years to land an auto plant, creating four mega-sites – two others are in Chatham County, while the fourth is in Edgecombe County – ready to accommodate a large manufacturing operation and expanding state incentive funds to provide more money to lure "transformative projects." But all of the state's efforts have been in vain, with companies from Volvo to Mercedes to Hyundai picking other sites in the Southeast. Toyota and Mazda now join that list of lost opportunities.

Copeland blamed the latest loss on Alabama's existing supply chain to serve the new Toyota-Mazda plant.

"North Carolina has a robust automotive parts industry, but they’re not necessarily where the sweet spot is for Toyota suppliers," he said. "Toyota has a plant in Alabama. They have an established supply chain that’s in Alabama, Tennessee, Indiana, and also the proximity to Mexico for suppliers of parts.

"We can’t move North Carolina southwest. [With Alabama's] geography, they’re proximally located in that corner where the supply chain is tended to locate," he said.

North Carolina was ready to offer the two car makers more than $1.5 billion in incentives in exchange for building the plant in Randolph County, Copeland said. That total included cash incentives, tax breaks and building logistical infrastructure.

The largest incentives deal North Carolina has ever awarded was the $87 million offered to MetLife in 2013 for operations in Cary and Charlotte.

Joe Coletti, senior fellow at the John Locke Foundation, a conservative think tank in Raleigh, said he finds the size of North Carolina's incentives proposal to Toyota-Mazda disconcerting.

"The better way to boost the economy is with having a good regulatory tax and business environment for every company that exists in North Carolina," Coletti said. "Individuals within the state, businesses within the state and state government have been doing a great job of making it an attractive place to be for over 30 years. I don’t think we necessarily need to throw money at the next company. We will; we just don’t need to."

Senate President Pro Tem Phil Berger noted the tax cuts and rollback of regulations that state lawmakers have undertaken in recent years, saying the effort helped in the Toyota-Mazda pursuit and will benefit future economic development efforts.

"While improving our business climate got North Carolina closer to landing an automobile manufacturing facility than ever before, at the end of the day, I believe our distance from Toyota’s part suppliers was too big a logistical challenge to overcome," Berger said in a statement. "This experience should put us in a great position to land the next plant."

Copeland said he was pleased with the bipartisanship shown in the Toyota-Mazda effort – Berger even thanked Cooper and Copeland for their hard work – and said its offers a blueprint for the future.

"The exciting thing about it, everyone worked together and worked on this package. All that is in place now. So, we’re not going to look in the rear-view mirror. We’re going to look forward," he said. "We’re more ready for the next one than we’ve ever been. We’ve never been this ready before with a site and a team together to … go forward."