The Toyota plant in Blue Springs that will build the hybrid Prius is on hold, indefinitely.
Toyota said construction of the facility will continue until completion, but once the building is finished, it will not be immediately equipped.
The announcement came after several publications reported Toyota executives were mulling the possibility of pushing back the plant’s operation date from 2010.
Perhaps the tell-tale sign came in early December when Toyota released sales figures for November that showed a more than 30 percent decline in sales from 2007.
Toyota cited the dramatically weaker automotive market as the reason for the delay and said the plant would not open until “market conditions allow.”
“Something had to give in this economy,” said David Rumbarger, CEO of the Community Development Foundation, one of the members of the Pontotoc-Union-Lee Alliance that developed the site where Toyota will sit. “When you’re down 30 percent in your market, I knew something had to happen. In general, people aren’t selling cars in this environment.”
For Northeast Mississippi, the plant was needed in tough economic times.
The region has seen substantial job loss in the manufacturing sector, particularly in the furniture industry. In 2008 alone, 2,000 manufacturing jobs have been lost.
So, the Wellspring Mega Site became the great economic hope of an area whose economic engine — the furniture industry —was sputtering. Toyota selecting it validated the efforts, which had come under considerable scrutiny, with critics saying it was not feasible to spend money on a site that had no tenant.
But this is not the first time Northeast Mississippi has had its hopes dashed.
In the 1980s, the Tennessee Valley Authority announced plans to build a nuclear power plant at the Yellow Creek port near Iuka before backing out. The company said it had overestimated electricity usage in the area as the reason for pulling the plug.
The same site became the object of NASA’s affection in the late ‘80s, when plans were unveiled for a $1.5-billion rocket engine production facility.
Again, the rug was jerked out from under Tishomingo County, this time after the state had spent more than $100 million on schools, roads, hospitals and a branch of the University of Mississippi. In an effort led by Sen. John McCain (R-Ariz.) to eradicate what he called pork-barrel spending, Congress stopped funding for the project in 1993. In 1995, NASA, citing budget concerns, killed the project for good.
While the specter of another huge project disappearing is enough to make economic developers throw up their hands, there are some major differences in NASA’s failure to launch at Yellow Creek and Toyota’s drive into Blue Springs.
For one, Toyota has promised that the facility will be completed, keeping nearly 2,000 construction workers employed. When NASA bailed, construction workers were sent home almost immediately. Parts of what was built remain today. In a New York Times article in November 1993, former head of the Tishomingo County Economic Development Foundation Mack Wadkins called the partially built facility “the world’s largest outdoor museum to government waste.”
In all, Toyota has spent $300 million on the project, while the state has kicked in $200 million. Local governments have contributed $35 million. In a statement in which he said he was “deeply disappointed,” Gov. Haley Barbour said Toyota would help mitigate some of the costs the state has rung up. Details of that mitigation were unclear.
“We will make it through,” Rumbarger said. “The promise of those jobs is so important.”
Contact MBJ staff writer Clay Chandler at clay.chandler@ msbusiness.com .