Toyota tweaks timeline for plant's opening

by For the MBJ

Published: May 19,2008

The lunch crowd at Gentry’s Grocery & Grill munched cheeseburgers and plate lunches. Many of them were construction workers, taking a few minutes’ break from whatever projects around Blue Springs in Union County they worked on.

“There are really not a lot of workers over there at Toyota, yet,” said Mike Gentry, owner of the 20-year-old store. Toyota’s assembly plant is under construction a few miles south at the intersection of Mississippi 9 and U.S. 78. Company officials predict 2,000 workers will be onsite this summer.

That’s music to Gentry’s ears since his is the nearest source of prepared food for Toyota workers.

But Toyota hit a bump in the road when it announced two weeks ago it is delaying the opening of the $1.3-billion plant by several months.

Gentry doesn’t think that will affect him, unless it becomes a longer delay: “I feel they’ll do what they’ve said they’ll do and do right for the community.”

“We never gave a month (to open),” Barbara McDaniel said of Toyota’s original announcement of the plant last year. The spokeswoman for Toyota Motor Engineering & Manufacturing North America explained that the company said it would open sometime in late 2009; the new opening date is in the spring of 2010, again not a specific day or even month.

McDaniel said the new date gives the company some time to restyle the Highlander, which is to be built at the Blue Springs facility, Toyota’s sixth vehicle assembly plant in the U.S. “Our main consideration has been the style change,” said McDaniel, adding that most car companies restyle their models every few years.

But restyling hasn’t been the sole consideration. McDaniel again: “Toyota every day makes decisions based on market needs and on the global economy,”

According to press reports, Toyota executive vice president Mitsuo Kinoshita announced last week that the weakened economy and weakened car sales in the United States are “main reasons” to postpone the Blue Springs opening.

One global economic factor is skyrocketing fuel prices that have stalled sales of gas-guzzling SUVs. Highlander sales in April dropped to 10,008 from 10,122 in April 2007. Overall, Toyota’s April sales are down 4.5%t from April 2007.

McDaniel acknowledged that building the more fuel-economical hybrid Highlander in Blue Springs “is not out of the question.” Just last year, Toyota officials said the hybrid would not be built there. Highlanders are currently built exclusively in Japan.

The depressed automobile market has most carmakers’ sales down. Toyota’s first quarter net profit dropped 28 percent from the same period last year.

Gov. Haley Barbour declared last week that the delayed opening is a good thing, giving Northeast Mississippi Community College (NMCC) and Itawamba Community College (ICC) time to catch up with their training programs.

Johnny Allen, president of NMCC, said he was “somewhat caught by surprise” by Barbour’s comments and that he is not aware of being behind in training, which is currently in the setup stage. “As far as I know, we’re on track to provide training.”

Allen said NMCC and ICC, in a consortium including other agencies, have set up a training center in a building at the Tupelo Furniture Market. Equipment has been purchased and staff members appointed. He expects all the 2,000 workers Toyota will eventually employ to be trained at the consortium training center.

David Rumbarger, president of Tupelo-based Community Development Foundation, agreed with Barbour that the postponed opening is a good thing. “It gives suppliers some breathing room. It was an aggressive timetable at the beginning.”

In yet another development, Toyota announced that its promise of a decade-long $5 million per year given to eight public school districts in Pontotoc, Union and Lee counties will be honored but it will not be a cash handout. Instead, it will be put into an endowment controlled by the Tupelo-based CREATE Foundation. How it is split remains to be determined, said CREATE president Mike Clayborne.

“There have been a lot of assumptions and speculation,” said Clayborne. He expects 5% of the principal to be dispersed yearly.

Toyota’s McDaniel said that while the company is committed to providing $50 million over the 10-year period, it never detailed until this month the mechanism it would employ for disbursing the funds.

As for Gentry, he doesn’t plan any major changes in the way he runs his grocery and food business. He thought about possibly starting a food coach delivering food to construction workers at the plant site, but says he realized early on that dealing with Toyota was not in the best interest of his very small business.

“And we’ll have to wait and see about putting in a sushi bar,” Gentry said with a laugh.

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

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