Mississippi Wins Battle for Toyota Plant

Toyota chooses a site near Tupelo, Miss., for a new assembly plant. The Japanese automaker will spend more than $1 billion to build the factory. It decided on Mississippi despite heavy competition from other states.

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STEVE INSKEEP, host:

Here's an example of how communities across America can rise or fall with one of the big three automakers. And in this case, we do not mean the Detroit automakers because Toyota is now one of the biggest sellers in this country. Toyota is also investing in the U.S. and will build a new assembly plant. As we're about to hear, that is a major victory for the community that will host the plan, and a major disappointing for communities that won't.

NPR's Jack Speer begins with the winners in Tupelo, Mississippi.

JACK SPEER: Mississippi Governor Haley Barbour was in Tupelo yesterday, and he couldn't help gloating a bit that Toyota had chosen his state as the home for its new North American plant.

Governor HALEY BARBOUR (Republican, Mississippi): Congratulations, North Mississippi. We won a great victory today and I am proud to be your governor and have the opportunity for us to make this a tremendous success not just for North Mississippi, but for Toyota. Thank you.

(Soundbite of applause)

SPEER: Arkansas and Tennessee had also been in the running. Toyota's Ray Tanquay said it was a tough decision, even as he jokingly tipped his hat to Tupelo's most famous former son.

Mr. RAY TANGUAY (Manufacturing Executive Vice President, Toyota North America): We did our homework and studied hard before making the final decision. As Elvis would say, only fools rush in.

(Soundbite of laughter)

SPEER: But joking aside, competition for the plant was fierce. Mississippi offered incentives valued at $296 million to woo Toyota. Once up and running, the plant will employ 2,000 people who will earn around $20 an hour in a part of the state where per capita income in 2004 was less than $22,000 a year.

At the Washington end of the event, Toyota's Jim Press said Mississippi was chosen because it fits well with other Toyota locations in the South.

Mr. JIM PRESS (President, Toyota North America): We have an engine plant that's not too far away in Alabama. We've got other activities that are there. And so, it just really makes sense for us.

SPEER: The Mississippi plant will be Toyota's eighth in the U.S. and the company is very much aware that its ascendancy could cause some problems down the road. Toyota is expected to overtake General Motors later this year as the world's largest automaker. Barbara Kahn teaches marketing at the Wharton Business School. She says that maybe one reason the automaker's ads now emphasize its long-standing presence in the U.S.

Professor BARBARA KAHN (Marketing, University of Pennsylvania): They have a little logo on their Web site that says Toyota's been in America since 1957. They advertised some of their trucks are built in Texas. They have U.S. foundations. They're really trying to be good citizens.

SPEER: And as part of that campaign, Toyota's Jim Press wants to make sure the company isn't perceived as capitalizing on Detroit's misfortunes.

Mr. PRESS: We have our own plans in terms of our own goals and our customer base. And we're quite busy working on developing our own company and don't spend so much time worrying about the others. I guess that's up to them.

SPEER: As for picking Mississippi over the other states, Toyota's Gary Convis offered his sympathy for the losers.

Mr. GARY CONVIS (Manufacturing Executive Vice President, Toyota North America): We had several, obviously, states - maybe more than 25 - interested in this project. We get a lot of calls and letters. And Arkansas and Tennessee both had excellent sites and did an excellent job. It's just that you can't choose everybody.

SPEER: Toyota hopes to break ground on its new assembly plant some time next year. Once it's completed, it's expected to produce 150,000 vehicles a year for the North American market.

Jack Speer, NPR News, Washington.

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