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Toyota to build assembly plant in Woodstock

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by Daily Commercial News last update:Jul 20, 2006

Surging Toyota Motor Corp. has decided to build a second assembly plant in Ontario, a Tokyo newspaper reported Monday.

Final announcement expected soon for $600M building

TORONTO

Surging Toyota Motor Corp. has decided to build a second assembly plant in Ontario, a Tokyo newspaper reported Monday.

Nihon Keizai Shimbun reported that management of the Japanese-based auto giant has selected a site near Woodstock, Ontario for construction of the plant that will cost more than $600 million and produce up to 150,000 sub-compact cars annually.

The plant would likely create 1,000 jobs directly and several thousand more in parts manufacturing and services.

Toyota’s board meets in Tokyo later this month where it will officially make a final decision on where to build its next North American plant.

Toyota reportedly picked the Canadian site over possible American locations because of lower labour and benefit costs.

Toyota, which could surpass General Motors Corp. as the world’s biggest auto maker later this decade, wants to start building cars at the new operation in 2008. If approved, it would take between 18 months and two years to build the plant.

A source told The Canadian Press recently “agreements in principle” have been reached with Ottawa and the province on funding assistance for the proposed project. Top Toyota manufacturing executives still need to conduct a final site inspection.

Speculation has been mounting for months that Toyota was interested in building a new complex in Woodstock, not far from its massive assembly operations in Cambridge, where workers at two plants make the Corolla, Matrix and Lexus RX 330 models.

Spinoffs of assembly plants can create jobs that support them. Dofasco Inc. chief executive Don Pether said last week the Hamilton steelmaker would consider building a new galvanizing line in the province if the Toyota plant is secured.

Gerry Fedchun, president of the Automotive Parts’ Manufacturers Association, said spinoff jobs created from a new assembly plant can reach as high as 10 to one.

“It would certainly be a significant number and bring prosperity to the area.” Proponents of the project said the current Ontario government has been more willing than the previous Tory regime to assist automakers, who over the years have been enticed to build factories in U.S. jurisdictions that offered steep subsidies in exchange for the creation of thousands of jobs.

Last month, Ontario Economic Development and Trade Minister Joe Cordiano was part of a team of politicians and top auto industry players who visited Japan in hopes of promoting the province to Toyota officials.

The Liberal government in Ottawa has also participated in recent funding announcements for General Motors and Ford.

Toyota Canada won’t comment on the speculation about Woodstock, but has confirmed it has made a case to the automaker’s head office for an expansion of operations in Canada.

“Toyota has experienced steadily increasing sales within North America and we also have a strong commitment or philosophy to build where we sell,” Greig Mordue, assistant general manager, corporate planning office for Toyota’s manufacturing operations in Canada, said last week.

“So, presumably at some point in time that will translate into the requirement for additional capacity within North America,” he added. “Certainly, we in Canada have made our case for Canada in general, and now we await a decision from Toyota Motor Corp.”

There has been some question about whether Toyota would want to build a new factory in Canada given the rising value of the country’s dollar as well as the Canadian Auto Workers’ organizing drive of more than 4,000 non-union workers in Cambridge.

But the source said those concerns are outweighed by the fact Toyota has an experienced management team in Cambridge that could help get a new plant down the highway up to speed quickly and efficiently.

Toyoto hired real estate brokers several months ago to search for possible locations and the County of Oxford is currently trying to assemble a 400-hectare site. The location is close to major railways and highways and numerous parts suppliers, which already feed the Cambridge operation.

Toyota opened its first Canadian assembly plant in Canada in 1989. The Canadian Press

‘Toyota has a strong commitment to build where we sell’

Greg Mordue - Toyota Canada

last update:Jul 20, 2006

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