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Toyota making progress; developers courting plant suppliers

Bolts are being tightened, nails are being driven and concrete is being poured. But it might appear to passersby that the construction of the Toyota assembly plant in Blue Springs is at a virtual standstill, its sprawling profile barely changed in the past few months.

“We continue to move forward though it seems nothing is going on,” says Lacey Luckett, external affairs specialist for Toyota, which announced in February 2007 that it would build the plant to assemble Highlander SUVs on the 1,700-acre Union County site.

But a lot has happened since that joyous announcement day in Northeast Mississippi. As fuel prices began spiraling upward, the demand for SUVs and other gas-guzzlers was plummeting. Toyota announced earlier this year that the Highlander would not be built in Blue Springs, after all.

Instead, the Toyota hybrid electric/gasoline Prius, considered by some to be the world’s best hybrid car, will be assembled at the plant. The projected start of production was moved back at least six months to late 2010; Luckett says that schedule is still valid.

“Equipment is not installed because we have to redesign,” Luckett explains. It will likely be early next year before assembly machinery begins arriving and is installed in the 2.2 million square feet of interior space.

As the market for large vehicles has decreased, the values of automotive stocks have also dropped; Toyota has not been immune. Toyota stock traded for $61.25 at the close of market October 10, less than half its high of $137.77 on November 4, 2007.

Luckett says the drop in stock value has not affected the company’s plans: “The auto industry is cyclical and we’re going through a down time.”

She also reports that “all the suppliers have not been named, yet.” Counties surrounding the main plant have been working diligently to land some of those supplier but the fluidity of the situation has stymied their efforts.

Duane Bullard, president and CEO of the Tippah County Development Foundation, says he is “marketing real heavy” in his quest to locate a Toyota supplier in or near Ripley, the county seat.

“We’ve sent out more than 4,000 marketing packages,” he reports. “But once the (last) tier one supplier was announced, they changed gears.”

Tier 1 suppliers supply Toyota directly, while tier two and three suppliers generally supply the tier one suppliers; Bullard is candid in his expectation that Tippah will not land a Tier 1 supplier.

“We stand a great chance of getting tier two or three suppliers, though,” says Bullard, citing the fact that those suppliers rarely construct new buildings for their manufacturing operations. They gravitate toward existing structures, and Tippah County has more than 1.5 million square feet of space in several different locations.

In spite of landing Toyoda Gosei, a tier one injection molding supplier, Sonny Simmons says Panola County is not stopping with that coup: “We anticipate more,” says the CEO of the Panola Partnership.

Since the county is just about out of available industrial space, it is developing a 170-acre industrial park adjacent to the airport; Simmons says it will be a prime location for suppliers in the next several years.

Itawamba County, too, landed a tier one supplier. Toyota Boshoku will make the carpets, seats and other fabric components for the main assembly plant. The $80-million enterprise will employ 600, but it is the only Toyota supplier for the county so far.

“It’s not real active right now,” says Greg Deakle, executive director of the Itawamba County Development Council. He notes that, due to the changed product to be coming out of the Toyota plant, some suppliers may be changing their plans; Deakle thinks some will ship parts from existing plants elsewhere rather than set up shop in Northeast Mississippi.

“But we’re still out there beating the bushes,” says Deakle, who notes that Itawamba County boasts the closest port (Tennessee-Tombigbee Waterway) to the Toyota plant.

Contact MBJ contributing writer C. Richard Cotton at rcotton4@earthlink.com .

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