Toyota Moves Production to Mississippi, Creates 2,000 Jobs

NEW VENTURE: Akio Toyoda (C), president of Japanese automaker Toyota Motor Corp., attends a press conference after the opening meeting of Toyota's global quality control committee at the company's headquarters in Toyota City, Japan, on March 30. Toyota will move some production of its Corolla model to a new factory in Mississippi, creating around 2,000 new jobs. (Yoshikazu Tsuno/AFP/Getty Images)

A new Toyota factory in Mississippi will begin production of the new Corolla sedan next year, bringing 2000 jobs to the area. Toyota Motor Corp. recently announced that its 10th U.S factory located in Blue Springs, Miss. is under construction, after the project was stalled due to waning sales.

“This is a great day for Mississippi,” Haley Barbour, the state’s governor, said in a conference call on June 16. Toyota’s decision to postpone the factory was appropriate he said and “by making the right business decision, Toyota will be here [for] the next 50 or 70 years,” said Barbour, a Republican.

The world’s largest automaker originally built the factory valued at $1.3 billion in 2009 and planned to build Highlander sport utility vehicles and Prius hybrids primarily due to their popularity given soaring fuel prices. However, by December 2008, it was unable to carry out this initiative and subsequently unable to install machinery to build the vehicles.

The company was burdened by various factors, including the global financial crises and recession in 2008, as well as a 35 percent overall plummet in U.S. auto sales from 2007 to 2009.

Nevertheless the volatility in the market is apparent, considering the Japanese automaker is concentrating on large marketing campaigns. Moreover, the Mississippi factory’s plans is offset by Toyota’s California operations shutting down, which was the formerly used to manufacture Corollas.

“You’re basically moving Corollas from California to Mississippi. It’s a bit of zero-sum game here,” said Erich Merkle, president of the consulting company Autoconomy.com in Grand Rapids, Mich., according to AP.

In terms of the big picture, Toyota paid record fines in the United States by forfeiting $16.4 million to authorities. An international recall of more than 8 million vehicles occurred this year due to defective floor mat and accelerator faulty pedal design. At least eight models were affected. There were more than 200 lawsuits related to accidents, the depreciation of Toyota resale values, as well as the dive in the company’s stock price.

Toyota has also had to face harsh criticism from U.S. unions, the United Auto Workers, about moving production to a nonunionized facility. There are plans to launch a banner campaign at Toyota dealerships to publicize that Toyota chooses profits before people.

The best seller for Toyota in the U.S. market is the Camry sedan, followed by then Corolla. The Mississippi factory is expected to produce 150,000 cars per year.